Item 1A.Risk Factors.
You
should carefully consider all of following risk factors and all the other information contained in this Report, including the
financial statements. If any of the following risks occur, our business, financial condition or results of operations may be materially
and adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your
investment. The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation
with respect to us and our business.
Risks
Related to Our Business and Corporate Structure
Our
initial stockholders may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you
do not support.
Our
initial stockholders own shares representing 20% of our issued and outstanding shares of common stock. Accordingly, they may exert
a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments
to our amended and restated certificate of incorporation and approval of major corporate transactions. If our initial stockholders
purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase
their control. Factors that would be considered in making such additional purchases would include consideration of the current
trading price of our Class A common stock. In addition, our board of directors, whose members were elected by certain of our initial
stockholders, is divided into three classes, each of which generally serves for a term of three years with only one class of directors
being elected in each year. We may not hold an annual meeting of stockholders to elect new directors prior to the completion of
our business combination, in which case all of the current directors will continue in office until at least the completion of
the business combination. If there is an annual meeting, as a consequence of our “staggered” board of directors, only
a minority of the board of directors will be considered for election and our initial stockholders, because of their ownership
position, will have considerable influence regarding the outcome. In addition, the founder shares, all of which are held by our
initial stockholders, will entitle the initial stockholders to elect all of our directors prior to our initial business combination.
Holders of our public shares will have no right to vote on the election of directors during such time. These provisions of our
amended and restated certificate of incorporation may only be amended by the vote of at least 90% of our issued and outstanding
common stock entitled to vote thereon. As a result, you will not have any influence over the election of directors prior to our
initial business combination. Accordingly, our initial stockholders will continue to exert control at least until the completion
of our business combination.
13
Our
sponsor paid an aggregate of $25,000 for the founder shares, or approximately $0.009 per founder share. As a result of this low
initial price, our sponsor, its affiliates and our management team and advisors stand to make a substantial profit even if an
initial business combination subsequently declines in value or is unprofitable for our public stockholders.
As
a result of the low acquisition cost of our founder shares, our sponsor, its affiliates and our management team and advisors could
make a substantial profit even if we select and consummate an initial business combination with an acquisition target that subsequently
declines in value or is unprofitable for our public stockholders. Thus, such parties may have more of an economic incentive for
us to enter into an initial business combination with a 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.
Risks
Related to Our Initial Business Combination
Our
public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete
our initial business combination even if a majority of our public stockholders do not support such a combination.
We
may not hold a stockholder vote to approve our initial business combination unless the business combination would require stockholder
approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or
other legal reasons. Except as required by law, the decision as to whether we will seek stockholder approval of a proposed business
combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion,
and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would
otherwise require us to seek stockholder approval. Accordingly, we may complete our initial business combination even if holders
of a majority of our public shares do not approve of the business combination we complete.
If
we seek stockholder approval of our initial business combination, our sponsor, officers and directors have agreed to vote in favor
of such initial business combination, regardless of how our public stockholders vote.
Our
sponsor, officers and directors have agreed to vote their founder shares, as well as any public shares purchased, in favor of
our initial business combination. As a result, in addition to our sponsor, officers and directors’ founder shares, we would
need 3,750,001, or 37.5%, of the 10,000,000 public shares sold in our initial public offering to be voted in favor of a transaction.
Our initial stockholders own shares representing 20% of our outstanding shares of common stock. Accordingly, if we seek stockholder
approval of our initial business combination, it is more likely that the necessary stockholder approval will be received than
would be the case if our sponsor, officers and directors agreed to vote their founder shares in accordance with the majority of
the votes cast by our public stockholders.
Your
only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise
of your right to redeem your shares from us for cash, unless we seek stockholder approval of the business combination.
Our
board of directors may complete a business combination without seeking stockholder approval, meaning public stockholders may
not have the right or opportunity to vote on the business combination, unless we seek such stockholder vote. Accordingly, if
we do not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business
combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business
days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business
combination.
The
ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential
business combination targets, which may make it difficult for us to enter into a business combination with a target.
We
may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition
that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights,
we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination.
Furthermore, we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least
$5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’
fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible
asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently,
if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 upon completion
of our initial business combination or such greater amount necessary to satisfy a closing condition, each as described above,
we would not proceed with such redemption and the related business combination and may instead search for an alternate business
combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination
transaction with us.
14
The
ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us
to complete the most desirable business combination or optimize our capital structure.
At
the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise
their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares
that will be submitted for redemption. If our business combination agreement requires us to use a portion of the cash in the trust
account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion
of the cash in the trust account to meet such requirements, or arrange for third party financing. In addition, if a larger number
of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater
portion of the cash in the trust account or arrange for third party financing. Raising additional third party financing may involve
dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit
our ability to complete the most desirable business combination available to us or optimize our capital structure. The amount
of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in
connection with a business combination. The per-share amount we will distribute to stockholders who properly exercise their redemption
rights will not be reduced by the deferred underwriting commission and after such redemptions, the per-share value of shares held
by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.
The
ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the
probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order
to redeem your stock.
If
our business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful
is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account
until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open
market; however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account. In either
situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption
until we liquidate or you are able to sell your stock in the open market.
The
requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses
leverage over us in negotiating a business combination and may decrease our ability to conduct due diligence on potential business
combination targets as we approach our dissolution deadline, which could undermine our ability to complete our business combination
on terms that would produce value for our stockholders.
Any
potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete
our initial business combination by November 22, 2021. Consequently, such target business may obtain leverage over us in negotiating
a business combination, knowing that if we do not complete our initial business combination with that particular target business,
we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer
to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial
business combination on terms that we would have rejected upon a more comprehensive investigation.
If
we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates
may elect to purchase shares or 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 or warrants.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business
combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares
or public warrants, or a combination thereof in privately negotiated transactions or in the open market either prior to or following
the completion of our initial business combination, although they are under no obligation to do so. Such a purchase may include
a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial
owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers,
advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected
to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their
shares. The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the
likelihood of obtaining stockholder approval of the business combination, or to satisfy a closing condition in an agreement with
a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our business combination,
where it appears that such requirement would otherwise not be met. This may result in the completion of our business combination
that may not otherwise have been possible.
In
addition, if such purchases are made, the public “float” of our Class A common stock or public warrants and the number
of beneficial holders of our securities may be reduced, possibly making it difficult to maintain the quotation, listing or trading
of our securities on a national securities exchange.
15
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer
rules, and if you or a “group” of stockholders are deemed to hold 15% or more of our Class A common stock, you will
lose the ability to redeem all such shares in excess of 15% of our Class A common stock.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation 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 15% of the shares sold in our initial public offering, which we refer to as the
“Excess Shares.” However, our amended and restated certificate of incorporation does not restrict our stockholders’
ability to vote all of their shares (including Excess Shares) for or against our business combination. Your inability to redeem
the Excess Shares will reduce your influence over our ability to complete our business combination and you could suffer a material
loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption
distributions with respect to the Excess Shares if we complete our business combination. And as a result, you will continue to
hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your stock in open
market transactions, potentially at a loss.
If
the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account
are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our
initial business combination and we will depend on loans from our sponsor or management team to fund our search for a business
combination, to pay our taxes and to complete our initial business combination. If we are unable to obtain these loans, we may
be unable to complete our initial business combination.
Of
the net proceeds of our initial public offering and the sale of the private placement warrants, only approximately $770,114 (as
of December 31, 2020) is available to us outside the trust account to fund our working capital requirements. If we are required
to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties to operate,
or we may be forced to liquidate. None of our sponsor, members of our management team nor any of their affiliates is under any
obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the trust
account or from funds released to us upon completion of our initial business combination. We do not expect to seek loans from
parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such
funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we are unable to obtain
these loans, we may be unable to complete our initial business combination. If we are unable to complete our initial business
combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust
account. Consequently, our public stockholders may only receive approximately $10.00 per share on our redemption of our public
shares, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00
per share on the redemption of their shares.
The
grant of registration rights to our initial stockholders may make it more difficult to complete our initial business combination,
and the future exercise of such rights may adversely affect the market price of our Class A common stock.
Pursuant
to an agreement entered into concurrently with the issuance and sale of the securities in our initial public offering, our initial
stockholders and their permitted transferees can demand that we register their founder shares, after those shares convert to our
Class A common stock at the closing of our initial business combination. In addition, holders of our private placement warrants
and their permitted transferees can demand that we register the private placement warrants and the Class A common stock issuable
upon exercise of the private placement warrants, and holders of warrants that may be issued upon conversion of working capital
loans may demand that we register such warrants or the Class A common stock issuable upon exercise of such warrants. We will bear
the cost of registering these securities. The registration and availability of such a significant number of securities for trading
in the public market may have an adverse effect on the market price of our Class A common stock. In addition, the existence of
the registration rights may make our initial business combination more costly or difficult to conclude. This is because the shareholders
of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset
the negative impact on the market price of our Class A common stock that is expected when the common stock owned by our initial
stockholders, holders of our private placement warrants or holders of our working capital loans or their respective permitted
transferees are registered.
Because
we are not limited to a particular industry, sector or any specific target businesses with which to pursue our initial business
combination, you will be unable to ascertain the merits or risks of any particular target business’ operations.
Although
we focus our search for a target business in the healthcare industry, we may seek to complete a business combination with an operating
company in any industry or sector. However, we will not, under our amended and restated certificate of incorporation, be permitted
to complete our business combination with another blank check company or similar company with nominal operations. There is no
basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash
flows, liquidity, financial condition or prospects. To the extent we complete our business combination, we may be affected by
numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable
business or an entity lacking an established record of revenues or earnings, we may be affected by the risks inherent in the business
and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate
the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all the significant
risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of
our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct
investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders who choose to
remain stockholders following the business combination could suffer a reduction in the value of their shares. Such stockholders
are unlikely to have a remedy for such reduction in value.
16
We
may seek acquisition opportunities in industries or sectors which may or may not be outside of our management’s area of
expertise.
We
will consider a business combination outside of our management’s area of expertise if a business combination candidate is
presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. Although our
management will endeavor to evaluate the risks inherent in any particular business combination candidate, we cannot assure you
that we will adequately ascertain or assess all the significant risk factors. We also cannot assure you that an investment in
our securities will not ultimately prove to be less favorable to investors in our initial public offering than a direct investment,
if an opportunity were available, in a business combination candidate. In the event we elect to pursue an acquisition outside
of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation
or operation, and the information contained herein regarding the areas of our management’s expertise would not be relevant
to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain
or assess all the significant risk factors. Accordingly, any stockholders who choose to remain stockholders following our business
combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction
in value.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses,
we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result,
the target business with which we enter into our initial business combination may not have attributes entirely consistent with
our general criteria and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target
business with which we enter into our initial business combination will not have all of these positive attributes. If we complete
our initial business combination with a target that does not meet some or all of these criteria and guidelines, such combination
may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition,
if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater
number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition
with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval
of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, it may
be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet
our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may
receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our
warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the
redemption of their shares.
We
may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established
record of revenue or earnings, which could subject us to volatile revenues or earnings or difficulty in retaining key personnel.
To
the extent we complete our initial business combination with an early stage company such as a pre-revenue entity with a limited
operating history, a financially unstable business, or an entity lacking an established record of revenues or earnings, we may
be affected by numerous risks inherent in the operations of the business with which we combine. These risks include investing
in a business without a proven business model and with limited historical financial data, a lack of revenues or earnings and difficulties
in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in
a particular target business, we may not be able to properly ascertain or assess all the significant risk factors and we may not
have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with
no ability to control or reduce the chances that those risks will adversely impact a target business.
We
are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm, and
consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our
company from a financial point of view.
Unless
we complete our business combination with an affiliated entity or our board cannot independently determine the fair market value
of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm that
is a member of FINRA or from an independent accounting firm that the price we are paying is fair to our company from a financial
point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will
determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed
in our proxy solicitation or tender offer materials, as applicable, related to our initial business combination.
17
Our
ability to successfully complete our initial business combination and to be successful thereafter will be totally dependent upon
the efforts of members of our management team, some of whom may join us following our initial business combination. The loss of
such people could negatively impact the operations and profitability of our post-combination business.
Our
ability to successfully complete our business combination is dependent upon the efforts of members of our management team. The
role of members of our management team in the target business, however, cannot presently be ascertained. Although some members
of our management team may remain with the target business in senior management or advisory positions following our business combination,
it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize
any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals
will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC,
which could cause us to have to expend time and resources helping them become familiar with such requirements.
In
addition, the officers and directors of an acquisition candidate may resign upon completion of our initial business combination.
The departure of a business combination target’s key personnel could negatively impact the operations and profitability
of our post-combination business. The role of an acquisition candidate’s key personnel upon the completion of our initial
business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s
management team will remain associated with the acquisition candidate following our initial business combination, it is possible
that members of the management of an acquisition candidate will not wish to remain in place. The loss of key personnel could negatively
impact the operations and profitability of our post-combination business.
Members
of our management team may negotiate employment or consulting agreements with a target business in connection with a particular
business combination. These agreements may provide for them to receive compensation following our business combination and as
a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Members
of our management team may be able to remain with the company after the completion of our business combination only if they are
able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take
place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation
in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination.
The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target
business. However, we believe the ability of such individuals to remain with us after the completion of our business combination
will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination.
There is no certainty, however, that any members of our management team will remain with us after the completion of our business
combination. We cannot assure you that any members of our management team will remain in senior management or advisory positions
with us. The determination as to whether any members of our management team will remain with us will be made at the time of our
initial business combination.
We
may have a limited ability to assess the management of a prospective target business and, as a result, may complete our initial
business combination with a target business whose management may not have the skills, qualifications or abilities to manage a
public company, which could, in turn, negatively impact the value of our stockholders’ investment in us.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess
the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary
to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly,
any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of
their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
The
officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The departure
of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination
business. The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot
be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team
will remain associated with the acquisition candidate following our initial business combination, it is possible that members
of the management of an acquisition candidate will not wish to remain in place.
We
may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated
with our Founders, sponsor, directors or existing holders which may raise potential conflicts of interest.
In
light of the involvement of our officers and directors with other entities, we may decide to acquire one or more businesses affiliated
with our Founders, sponsor, officers or directors. Our directors also serve as officers and board members for other entities.
Such entities may compete with us for business combination opportunities. Despite our agreement to obtain an opinion from an independent
investment banking firm that is a member of FINRA, or from an independent accounting firm, regarding the fairness to our company
from a financial point of view of a business combination with one or more domestic or international businesses affiliated with
our Founders, sponsor, officers, directors or existing holders, potential conflicts of interest still may exist and, as a result,
the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts
of interest.
18
Moreover,
we may, at our option, pursue an Affiliated Joint Acquisition opportunity with an entity affiliated with our Founders, sponsor
or management team. Any such parties may co-invest with us in the target business at the time of our initial business combination,
or we could raise additional proceeds to complete the acquisition by making a specified future issuance to any such parties.
Since
our sponsor, officers and directors will lose their entire investment in us if our business combination is not completed, a conflict
of interest may arise in determining whether a particular business combination target is appropriate for our initial business
combination.
In
August 2019, our sponsor acquired 2,875,000 founder shares for an aggregate purchase price of $25,000. Prior to the initial investment
in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. Because the underwriters of our initial
public offering did not exercise their over-allotment opinion at all, 375,000 of such shares were forfeited in January 2020. The
founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has purchased
an aggregate of 4,000,000 private placement warrants, each exercisable for one share of our Class A common stock at $11.50 per
share, for a purchase price of approximately $4,000,000, or $1.00 per whole warrant, that will also be worthless if we do not
complete a business combination. Holders of founder shares have agreed (A) to vote any shares owned by them in favor of any proposed
business combination and (B) not to redeem any founder shares in connection with a stockholder vote to approve a proposed initial
business combination. In addition, we may obtain loans from our sponsor, affiliates of our sponsor or an officer or director.
The personal and financial interests of our 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.
We
may issue notes or other debt securities, or otherwise incur substantial debt, to complete a 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 Report to issue any notes or other debt securities, or to otherwise incur outstanding
debt, we may choose to incur substantial debt to complete our business combination. We 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:
● our inability to pay dividends on our common stock;
● other disadvantages compared to our competitors who have less debt.
19
We
may only be able to complete one business combination with the proceeds of our initial public offering and the sale of the private
placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products
or services. This lack of diversification may negatively impact our operations and profitability.
Of
the net proceeds from our initial public offering and the sale of the private placement warrants, up to $103,339,379 is available
to complete our business combination and pay related fees and expenses (which includes $3,500,000 for the payment of deferred
underwriting commissions).
We
may complete our business combination with a single target business or multiple target businesses simultaneously or within a short
period of time. However, we may not be able to complete our business combination with more than one target business because of
various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial
statements with the SEC that present operating results and the financial condition of several target businesses as if they had
been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification
may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations
or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to
complete several business combinations in different industries or different areas of a single industry. In addition, we intend
to focus our search for an initial business combination in a single industry. Accordingly, the prospects for our success may be:
This
lack of diversification may subject us to numerous economic, competitive and regulatory developments, any or all of which may
have a substantial adverse impact upon the particular industry in which we may operate subsequent to our business combination.
We
may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to
complete our business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If
we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers
to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which
may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business
combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations
and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation
of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately
address these risks, it could negatively impact our profitability and results of operations.
We
may attempt to complete our initial business combination with a private company about which little information is available, which
may result in a business combination with a company that is not as profitable as we suspected, if at all.
In
pursuing our acquisition strategy, we may seek to complete our initial business combination with a privately held company. Very
little public information generally exists about private companies, and we could be required to make our decision on whether to
pursue a potential initial business combination on the basis of limited information, which may result in a business combination
with a company that is not as profitable as we suspected, if at all.
Our
management may not be able to maintain control of a target business after our initial business combination. We cannot provide
assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities
necessary to profitably operate such business.
We
may structure a business combination so that the post-transaction company in which our public stockholders own shares will own
less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if
the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
an interest in the target sufficient for the post-transaction company not to be required to register as an investment company
under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction
company owns 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively
own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the
business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares
of Class A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100%
interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders
immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such
transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or
group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely
that our management will not be able to maintain our control of the target business. We cannot provide assurance that, upon loss
of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate
such business.
20
We
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to
complete a business combination with which a substantial majority of our stockholders do not agree.
Our
amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that we will
only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately
prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions
(such that we are not subject to the SEC’s “penny stock” rules). As a result, we may be able to complete our
business combination even if a substantial majority of our public stockholders do not agree with the transaction and have redeemed
their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection
with our business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their
shares to our sponsor, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would
be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to
satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available
to us, we will not complete the business combination or redeem any shares, all shares of Class A common stock submitted for redemption
will be returned to the holders thereof, and we instead may search for an alternate business combination.
In
order to complete our initial business combination, we may seek to amend our amended and restated certificate of incorporation
or other governing instruments, including our warrant agreement, in a manner that will make it easier for us to complete our initial
business combination but that our stockholders or warrant holders may not support.
In
order to complete a business combination, blank check companies have, in the recent past, amended various provisions of their
charters and governing instruments, including their warrant agreement. For example, blank check companies have amended the definition
of business combination, increased redemption thresholds, changed industry focus and, with respect to their warrants, amended
their warrant agreements to require the warrants to be exchanged for cash and/or other securities. We cannot assure you that we
will not seek to amend our charter or other governing instruments or change our industry focus in order to complete our initial
business combination.
The
provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and
corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval
of holders of 65% of our common stock, which is a lower amendment threshold than that of some other blank check companies. It
may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement to facilitate
the completion of an initial business combination that some of our stockholders may not support.
In
those companies, amendment of these provisions requires approval by between 90% and 100% of the company’s public stockholders.
Our amended and restated certificate of incorporation provides that any provisions related to pre-business combination activity
(including the requirement to deposit proceeds of our initial public offering and the private placement of warrants into the trust
account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders
as described herein) may be amended if approved by holders of 65% of our common stock entitled to vote thereon, and corresponding
provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders
of 65% of our common stock entitled to vote thereon. In all other instances, our amended and restated certificate of incorporation
may be amended by holders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable provisions
of the DGCL or applicable stock exchange rules. We may not issue additional securities that can vote on amendments to our amended
and restated certificate of incorporation or in our initial business combination. Our initial stockholders, who collectively beneficially
own 20% of our common stock, will participate in any vote to amend our amended and restated certificate of incorporation and/or
trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions
of our amended and restated certificate of incorporation which govern our pre-business combination behavior more easily than some
other blank check companies, and this may increase our ability to complete a business combination with which you do not agree.
Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.
Our
sponsor, officers and directors have agreed, pursuant to a letter agreement with us, that they will not propose any amendment
to our amended and restated certificate of incorporation (i) that would modify the substance or timing of our obligation to allow
redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our
initial business combination by November 22, 2021, or (ii) with respect to any other provision relating to stockholders’
rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem
their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to
the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable),
divided by the number of then outstanding public shares. These agreements are contained in a letter agreement that we have entered
into with our sponsor, officers and directors. Our stockholders are not parties to, or third-party beneficiaries of, these agreements
and, as a result, will not have the ability to pursue remedies against our sponsor, officers or directors for any breach of these
agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject
to applicable law.
21
We
may be unable to obtain additional financing to complete our initial 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.
Although
we believe that the net proceeds of our initial public offering and the sale of the private placement warrants will be sufficient
to allow us to complete our initial business combination, because we have not yet selected any prospective target business we
cannot ascertain the capital requirements for any particular transaction. If the net proceeds of our initial public offering and
the sale of the private placement warrants prove to be insufficient, either because of the size of our initial business combination,
the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant
number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated
transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing
or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable terms,
if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination,
we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative
target business candidate. If we are unable to complete our initial business combination, our public stockholders may receive
only approximately $10.00 per share plus any pro rata interest earned on the funds held in the trust account (and not previously
released to us to pay our taxes) on the liquidation of our trust account and our warrants will expire worthless. In addition,
even if we do not need additional financing to complete our business combination, we may require such financing to fund the operations
or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued
development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing
to us in connection with or after our initial business combination. If we are unable to complete our initial business combination,
our public stockholders may only receive approximately $10.00 per share on the liquidation of our trust account, and our warrants
will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption
of their shares.
A
provision of our warrant agreement may make it more difficult for use to consummate an initial business combination.
Unlike
some other blank check companies, if
(iii) the Market Value is below $9.20 per share,
then
the exercise price of the warrants will be adjusted to be equal to 115% of the greater of the Market Value and the Newly Issued
Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the greater
of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination
with a target business.
Because
we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
initial business combination with some prospective target businesses.
The
federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial
significance tests include target historical and/or pro forma financial statement disclosure. We will include the same financial
statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules.
These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally
accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International
Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to
be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These
financial statements may also be required to be prepared in accordance with GAAP in connection with our current report on Form
8-K announcing the closing our initial business combination within four business days following such closing. These financial
statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to
provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules
and complete our initial business combination within the prescribed time frame.
22
If
we acquire an operating company or business in the healthcare industry, our future operations may be subject to risks associated
with this sector.
While
we may pursue an initial business combination target in any business or industry, we have focused our search on acquiring an operating
company or business in the healthcare industry. Risks inherent in investments in this sector may include, but are not limited
to, the following:
● Competition could reduce profit margins.
● A disruption in supply could adversely impact our business.
Any
of the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifying
prospective target businesses are not limited to the healthcare industry. Accordingly, if we acquire a target business in another
industry, these risks will likely not affect us and we will be subject to other risks attendant with the specific industry in
which we operate or target business which we acquire, none of which can be presently ascertained.
Our
search for a business combination, and any target business with which we ultimately consummate a business combination, may be
materially adversely affected by the recent coronavirus (COVID-19) outbreak.
In
December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread
throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization
declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.”
On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United
States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized
the outbreak as a “pandemic”. A significant outbreak of COVID-19 and other infectious diseases could result in a widespread
health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target
business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable
to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings
with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate
and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will
depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge
concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions
posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business