Contract analysis

I. EXECUTIVE SUMMARY Calderwood & Harkness LLP represents Helix Bio Therapeutics Inc. ("HBT"), a Delaware corporation headquartered at 450 Kendall Street, Suite 800, Cambridge, MA 02142, in connection with a proposed de-SPAC business combination with Pinnacle Venture Acquisition Corp. ("PVAC"), a Cayman Islands exempted company listed on the Nasdaq Stock Market LLC ("Nasdaq") under the tickers PVAC.U (units), PVAC (C

II. BACKGROUND A. Description of Helix Bio Therapeutics Inc. Helix Bio Therapeutics Inc. ("HBT") is a clinical-stage biotechnology company focused on the development of next-generation gene-editing therapies for rare monogenic diseases. HBT was incorporated in the State of Delaware on June 12, 2018, and its Employer Identification Number (EIN) is 83-2947156. HBT's registered agent in Delaware is CT Statutory Services

III. PROPOSED TRANSACTION STRUCTURE A. Overview of the Forward Merger The proposed transaction is structured as a forward triangular merger — also referred to in practice as a "forward subsidiary merger" — which is the predominant and most well-understood structure for de-SPAC business combinations. Under this structure, Merger Sub, a newly formed wholly owned Delaware subsidiary of PVAC, will merge with and into HBT

1. Sponsor Forfeiture Pinnacle Venture Sponsor LLC (the "Sponsor") has agreed, as part of the negotiated terms of the proposed transaction, to forfeit 375,000 of its 1,250,000 Founder Shares at the effective time of the merger. This forfeiture represents a 30% reduction of the Sponsor's equity position in PVAC. Following the forfeiture, the Sponsor will retain 875,000 shares of the combined company. The Sponsor forfe

2. Sponsor Lock-Up All 875,000 shares retained by the Sponsor following the forfeiture will be subject to a 12-month post-closing lock-up, during which period the Sponsor will be prohibited from transferring, selling, pledging, or otherwise disposing of any of its retained shares. The lock-up is subject to an early release provision: the lock-up will terminate early if the closing price of HBIO Class A common stock e

3. Sponsor Voting and Waiver Pursuant to the Sponsor Support Agreement, the Sponsor will agree to the following: (a) Voting Commitment. The Sponsor will vote all of its Class B ordinary shares (and any other shares of PVAC over which it has voting control) in favor of the approval and adoption of the BCA and the transactions contemplated thereby, including the merger and the re-domestication, at any meeting of PVAC s

IV. FINANCIAL STRUCTURE AND SOURCES & USES A. Sources of Funds The combined company's available cash at closing will be derived from two principal sources: The Trust Account balance of $51,247,813.55 reflects the gross proceeds of the IPO ($50,000,000) plus accrued interest earned on the trust investments since the IPO closing date of August 16, 2021. The trust investments consist primarily of U.S. Treasury securitie

Section 7.03(c) of the BCA (as currently drafted) provides that, as a condition to HBT's obligation to consummate the merger, the available cash at closing — defined as the Trust Account proceeds net of shareholder redemptions, plus the PIPE proceeds, minus aggregate transaction expenses — must be no less than $30,000,000 (the "Minimum Cash Condition"). This condition is for the benefit of HBT and may not be waived b

V. ALTERNATIVE STRUCTURES CONSIDERED In the course of negotiations and deal structuring, we evaluated several alternative transaction structures before recommending the forward triangular merger. Each alternative was assessed on the basis of its tax treatment, corporate law implications, effect on the Nasdaq listing, consent and assignment requirements, and overall transactional complexity. Set forth below is a summa

VI. FEDERAL INCOME TAX ANALYSIS A. Overview and Importance A principal objective of the deal structuring process has been to ensure that the transaction is structured so that the exchange by HBT equityholders of their shares of HBT common stock for shares of the combined company (HBIO) is tax-free (or, more precisely, tax-deferred) to the greatest extent possible under the Internal Revenue Code. This objective is imp

1. Applicable Reorganization Types The proposed merger of Merger Sub with and into HBT, with HBT surviving, is analyzed under two interrelated provisions of Section 368(a) of the Code.

Section 368(a)(1)(A) — Statutory Merger. Section 368(a)(1)(A) defines a "reorganization" to include "a statutory merger or consolidation." A statutory merger is a merger effected pursuant to a state or federal merger statute. Here, the merger of Merger Sub with and into HBT will be effected pursuant to Section 251 of the DGCL, which is the general Delaware merger statute. Accordingly, the merger satisfies the thresho

Section 368(a)(2)(E) — Forward Triangular Merger. Because the merger is accomplished through a subsidiary (Merger Sub) of the acquiring corporation (PVAC), rather than through a direct merger of PVAC itself with and into HBT, the transaction must also satisfy the requirements of Section 368(a)(2)(E) of the Code. Section 368(a)(2)(E) provides that a transaction otherwise qualifying as a reorganization under Section 36

2. Continuity of Interest (COI) The continuity of interest doctrine, which is codified in Treasury Regulation Section 1.368-1(e), requires that, in a reorganization, a substantial part of the value of the proprietary interests in the target (HBT) must be preserved in the form of a continuing equity interest in the acquiring corporation (or its parent). The purpose of the COI requirement is to ensure that the transact