10-K
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d118228d10k.htm
10-K
10-K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
For the fiscal year ended December 31, 2020
For the transition period from to
Commission File Number:
001-40033
FORESIGHT
ACQUISITION CORP.
(Exact name of registrant as specified in its charter)
233 Michigan Avenue
Chicago, IL 60601
(Address
of principal executive offices) (Zip Code)
(312) 882-8897
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of Each Class Trading Symbol (s) Name of Each Exchangeon Which Registered
Warrants to purchase one share of common stock FOREW The Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Exchange Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ☐ No ☒
Indicate by check mark if the Registrant is
not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No ☒
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 if disclosure of delinquent filers pursuant to Rule 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of Registrant’s knowledge, in definite proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. ☐
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 definitions of “large accelerated filer,” “accelerated
filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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 ☐
The registrant was not a public
company as of June 30, 2020 and therefore it cannot calculate the aggregate market value of its voting and non-voting common equity held by non-affiliates as of
such date.
As of March 31, 2021, there were 31,625,000 shares of Class A common stock, par value $0.0001 per share, and 7,906,250
shares of Class B common stock, par value $0.0001 per share, issued and outstanding.
Table of Contents
TABLE OF CONTENTS
Page
PART I
Item 1. Business 2
Item 1A. Risk Factors 27
Item 1B. Unresolved Staff Comments 59
Item 2. Properties 59
Item 3. Legal Proceedings 59
Item 4. Mine Safety Disclosures 59
PART II
Item 6. Selected Financial Data 60
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 63
Item 8. Financial Statements and Supplementary Data 63
Item 9A. Controls and Procedures 63
Item 9B. Other Information 64
PART III
Item 10. Directors, Executive Officers and Corporate Governance 65
Item 11. Executive Compensation 70
Item 14. Principal Accountant Fees and Services 75
PART IV
Item 15. Exhibits and Financial Statement Schedules 76
SIGNATURES
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PART I
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some statements contained in this Annual Report on Form 10-K (this “Annual Report”) are
forward-looking in nature. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any
statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,”
“should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Annual Report may
include, for example, statements about:
• our ability to select an appropriate target business or businesses;
• our ability to complete our initial business combination;
• our public securities’ potential liquidity and trading;
• the lack of a market for our securities;
• the trust account not being subject to claims of third parties; or
• our financial performance.
The forward-looking statements contained in this Annual Report are based on our current expectations and beliefs concerning future
developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are
beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to,
those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected
in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
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ITEM 1. BUSINESS
General
We are a blank check company incorporated as a
Delaware corporation for the purpose of effecting a merger, stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this Annual Report as our initial
business combination. While we may pursue a merger opportunity in any industry or sector, we initially intend to capitalize on the track record and experience of our management team and sponsor and focus our search in the technology-enabled consumer
and consumer healthcare industries. We believe our team is uniquely positioned and will have proprietary deal flow in these sectors given our collective successful track record as operators, investors and entrepreneurs, and our principals’
track record of success initiating transformative mergers and acquisitions, operational acumen and strong network in these sectors.
The registration
statement on Form S-1 (File Nos. 333-251978) for our initial public offering (the “IPO”) was declared effective by the Securities and Exchange Commission
(the “SEC”) on February 9, 2021. On February 12, 2021, we consummated the IPO of 31,625,000 units, which included the full exercise of the underwriters’ over-allotment option. Each unit consists of one share of Class A
common stock, par value $0.0001 per share (“Class A Common Stock”), and one-third of one redeemable warrant (“Warrant”), each whole Warrant entitling the holder thereof to
purchase one share of Class A Common Stock at an exercise price of $11.50 per share, subject to adjustment. The units were sold at an offering price of $10.00 per Unit, generating gross proceeds to us of $316,250,000.
Simultaneously with the consummation of our initial public offering, we consummated the private placement of an aggregate of 832,500 units (the “Private
Placement Units”) to Foresight Sponsor Group, LLC (the “Sponsor”) and FA Co-Investment LLC (“FA Co-Investment” and, together with the
Sponsor, the “Sponsors”) at a price of $10.00 per Private Placement Unit, generating total gross proceeds of $8,325,000 (the “Private Placement”).
A total of $316,250,000 from the net proceeds of the sale of the units in our initial public offering and the sale of the Private Placement Units, including
as a result of the full exercise of the underwriters’ over-allotment option, was placed in a trust account established for the benefit of our public shareholders (the “trust account”), with Continental Stock Transfer & Trust
Company acting as trustee, and has been invested only in U.S. government treasury bills, notes and bonds with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7
under the Investment Company Act of 1940, as amended (the “Investment Company Act”) and which invest solely in U.S. Treasuries. Except for all interest income that may be released to us to pay our tax obligations and for dissolution
expenses up to $100,000, as applicable, none of the funds held in the trust account will be released from the trust account until the earlier of: (i) the consummation of our initial business combination by February 12, 2023, and
(ii) a redemption to public stockholders prior to any voluntary winding-up in the event we do not consummate our initial business combination within the applicable period.
As of December 31, 2020, we had cash of $179,512. Until the consummation of the IPO, our only source of liquidity was an initial purchase of common stock
by, and loans from, our Sponsors.
Our units began trading on February 10, 2021 on the Nasdaq Capital Market (the “Nasdaq”) under the
symbol “FOREU.” The shares of common stock and warrants comprising the units are expected to begin separate trading on the Nasdaq under the symbols “FORE” and “FOREW,” respectively, on or about April 2, 2021. Those
units not separated will continue to trade on the Nasdaq under the symbol “FOREU.”
Our Sponsor
Foresight was formed as a partnership among and will be led by Greg Wasson, our Chairman and former CEO and President of Walgreens Boots Alliance, and two
former Co-Portfolio Managers of William Blair’s Small Cap Growth Investment Funds, Mike Balkin, our Chief Executive Officer, and Karl Brewer. Foresight will
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leverage Mr. Wasson’s family office, Wasson Enterprise, through the process of identifying and evaluating targets. Over the course of the last five years, Mr. Wasson has built a
strong infrastructure consisting of resources dedicated to investment identification and diligence, finance, human resources, marketing and operations. With this support, Mr. Wasson has helped
to co-found high-growth businesses, catalyze mature businesses and deploy capital as a strategic investor in other private companies in the retail, consumer and healthcare sectors.
In addition to the founders, Messrs. Wasson, Balkin and Brewer, we’ve built a world-class founding sponsor team, consisting of successful former public company C-suite executives and private equity industry leaders. Our sponsor team will provide us with valuable strategic, operational, product management, analytical, financial, transactional,
communications, legal, and other expertise and networks that we will leverage to identify and execute a business combination and drive future value for the combined business. We believe our team’s high level of operating experience and business
building; far, wide and deep networks; and ability to tap into that experience and network will provide valuable access to the highest quality consumer growth companies. Once our team has identified a potential opportunity for an initial business
combination, we believe we will have the operational expertise to drive efficiencies across the target business while also helping to make strategic customer and partner introductions to drive revenues. Our team will look to identify companies built
on sustainable business models, customer-obsessed company cultures, strong unit economics, and differentiated product offerings. Through our management team’s network and operational expertise, we expect to increase the value of the enterprise,
improve the company’s financial positioning and ultimately generate strong stockholder returns.
Our Team
We are led by an experienced team of C-level operators, managers and investors. Our team’s vast network
and synergistic experience in large company leadership roles, industry-changing mergers & acquisitions and institutional public markets investing provide us with unique positioning as it relates to finding a target and adding value
post-close. Our board will also consist of key individuals who have served in roles at the most senior levels of public corporations and private equity firms. We believe our decades of partnership and experience, together with our collective
network, will uniquely position us to identify and successfully merge with an attractive target company.
Greg Wasson serves as Chairman of the Board.
Mr. Wasson currently serves as President and Founder of his own family office, Wasson Enterprise. Wasson Enterprise’s focus is to partner with entrepreneurs and operators to build sustainable, high-growth businesses that do well by doing
good. As the former CEO and President of Walgreens, Mr. Wasson has extensive global operational and management experience, as well as extensive knowledge of the retail and healthcare industries. Mr. Wasson attended Purdue University’s
School of Pharmacy, receiving his pharmacy degree in 1981. Before his senior year, he was invited to become one of the first pharmacy services interns in Walgreens’ corporate offices—an opportunity that led to his being hired by Walgreens
upon graduation and that changed the course of his future career. Mentored by many company leaders through the years, together with his outstanding performance in positions of increasing responsibility, Mr. Wasson served Walgreens for 34 years.
As Walgreens CEO, Mr. Wasson led the Fortune 35 company to record fiscal 2014 sales of $76.4 billion. He is credited with creating significant financial and shareholder value, initiating and completing transformative mergers and
investments, leading complex organizational and structural change, assembling a diverse and high-performance senior leadership team, and establishing Walgreens’ position as an industry leader. Before retiring from Walgreens, Mr. Wasson had
transformed an iconic 114-year-old domestic company into the first global pharmacy-led, health, well-being and beauty
enterprise via the successful merger with European-based Alliance Boots to create Walgreens Boots Alliance. Mr. Wasson currently serves on the Board of Directors of OptimizeRx Corp. (NASDAQ: OPRX).
Michael Balkin serves as our Chief Executive Officer and Director. Mr. Balkin has over 30 years of experience in working with public companies in the
small cap space. Mr. Balkin was a partner and formerly the co-Manager of the William Blair Small Institutional portfolio and the William Blair Small Cap Growth Fund,
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which he and his partners, Karl Brewer and Mark Fuller, started in 1999. He and his team managed nearly $1.8 billion dollars in total assets and have been named among the top small cap funds
multiple times by publications such as Barrons, Morningstar, Lipper and Institutional Investor Magazine. From 2005 to 2008, Mr. Balkin was a partner at Magnetar Capital, LLC, a multi-strategy hedge fund located in Evanston, Illinois. While at
Magnetar, Mr. Balkin was the Portfolio Manager in charge of the small cap long-short strategy and was also the Chief Investment Officer of Magnetar Investment Management, a wholly owned asset management subsidiary of Magnetar Capital. He
rejoined William Blair & Company in 2008. He originally joined William Blair in 1990, working in the sell-side institutional research sales group, specializing in small cap growth companies. Prior to joining William Blair, he was the co-founder of Cityview Associates, Inc., a real estate firm specializing in “value-added” real estate transactions. Prior to starting Cityview Associates, Mr. Balkin had various roles at
First Chicago and Bankers Trust. In addition to his work with William Blair, Mr. Balkin has helped dozens of small companies grow as an angel investor, mentor and board member. He is currently the Chairman of the Board of Performance Health
Systems, LLC and is a member of the board of managers of the Innventure Fund, an Intellectual Property-based development fund started by Greg Wasson. Mr. Balkin is also active in many charities and is on the board of the Friends of the Israeli
Defense Forces, Good Sports and is a major advocate and fund raiser for Cystic Fibrosis and the Illinois Holocaust Museum. Mr. Balkin graduated with a Bachelor’s degree in Economics from Northwestern University, where he was also a two
year Captain of the tennis team.
Gerald Muizelaar serves as our Chief Financial Officer. Mr. Muizelaar brings over 15 years of financial leadership
in private equity, manufacturing, retail and customer service. Mr. Muizelaar has served as Vice President of Finance for Wasson Enterprise, the family office of Greg Wasson, since 2017. Mr. Muizelaar’s strong focus implementing robust
financial processes and systems, ensuring regulatory compliance, and bolstered financial visibility have been a key factor in Wasson Enterprise’s success. As a former North American Finance Manager for Amazon, Mr. Muizelaar led all U.S.,
Canadian and Latin American customer service finance teams. He and his team provided financial insights and analysis for a customer service network that encompassed over 10,000 employees and an annual P&L in excess of $250 million.
Mr. Muizelaar’s leadership and deep understanding of operations were influential in optimizing costs for Amazon’s North American Customer Service team, while simultaneously growing its operations by 30% annually and consistently
driving quality improvements to keep Amazon ranked #1 in the World for Customer Service. Mr. Muizelaar holds a Bachelor of Business Administration from Acadia University and a MBA from Dalhousie University.
Karl Brewer is one of our founders and advisors. Mr. Brewer is a private investor focused on small public and private growth companies. Until December
2017, he was Portfolio Manager of the Small Cap Growth and Small-Mid Cap Growth Funds at William Blair, having joined the Small Cap Growth team in 1999 and
the Small-Mid Cap Growth team in 2002. He joined William Blair in 1996, serving as a research analyst for three years. Before that, he was in the mergers & acquisitions and corporate finance
departments at Lehman Brothers Inc. for six years. Mr. Brewer graduated from Washington and Lee University with a BA in Economics and earned an MBA from Northwestern University’s Kellogg Graduate School of Management.
Brian Gamache serves on our Board of Directors. Mr. Gamache was the former Chairman and CEO of WMS Industries Inc., a designer, manufacturer and marketer
of games for the casino and on-line gaming industries. Prior to rejoining WMS, he served as President of Wyndham International’s Luxury and Resort Division. Before Wyndham, he served as
President and Chief Operating Officer of WHG Resorts and Casinos, Inc., a subsidiary of WMS Industries. He previously held various executive positions with Marriott Hotel Corporation and Hyatt Hotels Corporation. Mr. Gamache is on the Board of
Directors at Welbilt, Inc. (NYSE: WBT) and currently serves as an advisor to several private equity firms and corporations. He is a guest lecturer at Northwestern University’s Kellogg School of Management. Mr. Gamache graduated from the
University of Florida with a degree in Business Administration, where he currently serves as a member of the Dean’s Council to the Warrington School of Business.
Robert Zimmerman serves on our Board of Directors. Mr. Zimmerman is an independent consultant since retiring from Walgreens in 2014, focusing on
healthcare, specifically retail pharmacy services and pharmacy
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benefit management. His primary consulting work has been with knowledge transfer companies (GLG and Guidepoint) with significant short-term assignments with end business clients as well as hedge
funds and consulting firms. He has also consulted directly with private equity and hedge funds. Until April 2014, Mr. Zimmerman served as Chief Strategy Officer and SVP of Corporate Development at Walgreens. In these roles, he worked directly
with the CEO and Executive Committee on strategic plans helping transform Walgreens from a drug store chain to an international integrated health care provider. He also led the development and execution of Walgreens M&A strategy, including the
largest transaction in Walgreens’ history, the acquisition of Alliance Boots. Prior to his tenure as CSO, he served as CFO and EVP of WHP Health Initiatives, Walgreens’ managed care division. He held responsibility for the division’s
finance, strategy, new business and product development initiatives, acquisitions, pharmaceutical trade relations, and Customer Care Center operations. Mr. Zimmerman currently also serves as a Board Member on the State of Illinois Board of
Pharmacy (–since 2016), where he was appointed by the Governor of Illinois. Mr. Zimmerman graduated from Eastern Illinois University in 1973 with a Bachelor of Finance, and from Northern Illinois University in 1984 with an MBA.
John Svoboda serves on our Board of Directors. Mr. Svoboda co-founded Svoboda Capital Partners
(“SC”) in January 1998 with Michelle Collins. Mr. Svoboda serves on the boards of SC portfolio companies BPI/Incite, One North Interactive, Sonoma Creamery and SWC Technology Partners. Prior
to co-founding SC, Mr. Svoboda worked in the Corporate Finance Department of William Blair & Company LLC (1983 to 1997), where he managed Business Development and became a Partner in
1988. Mr. Svoboda serves as a trustee of the University of Chicago Medical Center. Mr. Svoboda also serves as a trustee for the Otho S. A. Sprague Memorial Institute, the Auditorium Theatre where he was Chairman of the Board, as an
honorary trustee of Marwen and as a life trustee of the Francis W. Parker School. He served on the Advisory Council of Stanford’s Graduate School of Business and served on the Steering Committee for the Stanford Campaign. Mr. Svoboda has
also served on several alumni and fundraising committees for both Williams College and the Stanford Business School, as well as capital campaigns for the Greater Chicago Food Depository and the University of Chicago Comer Children’s Hospital.
Mr. Svoboda is also active as a mentor and selection committee member for the Pat Tillman Foundation and is a member of the Commercial Club of Chicago. Mr. Svoboda graduated from Williams College with a BA in 1979 and received his MBA from
the Stanford Graduate School of Business in 1983.
We are further supported by a team of advisors which is comprised of current and former executives with
significant investment and operating experience across a wide range of sub-sectors. These advisors and executives will provide us with access to their expertise and extensive networks from which we
intend to source and evaluate potential targets as well as assist in the future value creation plans of any business that we acquire. Our team of advisors are described below.
Mark Thierer is one of the most successful executives in the healthcare services industry. A lifelong leader in the healthcare space, he is known for his
ability to bring companies to new levels of financial and operational success. In what has been called a “rags-to-riches” business tale,
Mr. Thierer transformed a small pharmacy benefit management company (PBM) called SXC Health Solutions into one of America’s biggest and fastest growing players — and then facilitated a $12.8 billion sale to Optum. In the
five-year period after Mr. Thierer joined the company he achieved a 3,400% increase in revenues and a 10-fold jump in profits. Following a merger with Catalyst Health Solutions, SXC moved its
headquarters to Chicago. Under a new name, Catamaran (NASDAQ: CTRX), the company continued its ascent to the top of the pharmacy benefits technology space. When UnitedHealth Group, Inc. acquired Catamaran in 2015 to create OptumRx, Mr. Thierer
stayed with OptumRx to continue to lead the business as CEO. After OptumRx, Mr. Thierer served as interim CEO at dental equipment giant Dentsply Sirona (NYSE: XRAY). He also formed the local investment firm, Assetblue Investment Group, where he
serves as Managing Partner. Mr. Thierer serves on multiple public company boards and is active in private equity investing. Mr. Thierer holds a BS in Finance with distinction from the University of Minnesota, and an MBA from Nova
Southeastern. He also holds a Certified Employee Benefit Specialist (CEBS) designation from the Wharton School.
Kermit Crawford is a pharmacy, health and
wellness expert who has led transformational change and cost-saving programs in highly competitive consumer-focused businesses. He most recently served as President and Chief
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Operating Officer for Rite Aid Pharmacy (NYSE: RAD), a Fortune 500 company with more than 2500 retail locations. He began his
over 30-year corporate career at Walgreens (NASDAQ: WBA), the world’s largest drug store chain, where he rose from pharmacist/store manager to Executive Vice President and President of Pharmacy,
Health & Wellness, the corporation’s largest business unit. Mr. Crawford’s private equity experience includes serving as operating partner, adviser, and consultant for Sycamore Partners, a New York-based firm specializing in
retail and consumer investments. Mr. Crawford is an Independent Director and Chair of the Audit Committee for Allstate Corporation (NYSE: ALL) and he also serves as a Director and member of the Audit and Compliance and Technology, Privacy,
& Cybersecurity Committee for TransUnion (NYSE: TRU). Mr. Crawford has received many notable honors for his expertise and contributions. Chain Drug Review honored him with the “Lifetime Achievement Award” in 2014 and Drug Store
News presented him with its 2014 “Pharmacy Innovator Award.” Savoy Magazine named Crawford one of the “Top 100 Most Influential Blacks in Corporate America” in 2018, and Black Enterprise Magazine named Crawford to its prestigious
list of “America’s Most Powerful Black Directors” in 2018. Mr. Crawford received his BS in Pharmacy from The College of Pharmacy and Health Sciences at Texas Southern University.
Matt Shattock served as non-executive chairman of the board of Beam Suntory Inc., the world’s
third-largest premium spirits company, from April 2019 until December 2020. He previously served as chairman and CEO of Beam Suntory for ten years, having joined Beam in March 2009 as president and CEO. He led the company’s successful growth
strategy transformation and subsequent transition to become a standalone public company in 2011. Subsequently, he led the integration of the Beam and Suntory spirits businesses following Suntory’s $16 billion acquisition of Beam in 2014.
Prior to joining Beam, he spent six years at Cadbury plc, an international confectionery manufacturer, where he led its businesses first in the Americas and then in the Europe, Middle East and Africa region. Prior to Cadbury, he spent 16 years at
Unilever, an international manufacturer of food, home care and personal care products, in various leadership positions, culminating in his role as chief operating officer of Unilever Best Foods North America. Mr. Shattock brings significant
experience in the consumer-packaged goods industry. He has a strong track record of driving organic growth through innovation, brand communication and operational excellence, together with significant M&A and integration experience.
Mr. Shattock’s public company experience also includes his membership of the VF Corporation and Clorox boards in the US and Domino’s Pizza Group PLC in the UK, where he chairs the board.
Theodore Koenig is the President, CEO and Founder of Monroe Capital and has over 30 years of experience in structuring and investing in debt and equity
transactions. Mr. Koenig also serves as the Chairman, President and CEO of Monroe Capital Corporation (NASDAQ: MRCC), a publicly traded business development company (BDC). Prior to founding Monroe Capital in 2004, Mr. Koenig was President
and CEO of Hilco Capital LP, a junior secured/mezzanine debt fund established in 2000. Prior to that, Mr. Koenig spent 13 years at the Chicago-based law firm of Holleb & Coff as partner and
co-chair of the firm’s Corporate Law, Mergers & Acquisitions and Business Finance groups, where he supervised and was responsible for structuring, negotiating and documenting acquisitions
and sales of middle-market companies as well as representing the firm’s bank, financial institution and commercial finance clients in financing transactions for buyout, growth, recapitalization and restructuring transactions. Mr. Koenig is
a graduate of the Kelley School of Business at Indiana University, with a BS in accounting with high honors and Chicago-Kent College of Law with a JD with honors.
Craig Zummer, founder and Managing Director of Insight Advisory Partners, a merchant banking and strategy consulting firm. Prior to co-founding the firm, Mr. Zummer spent 15 years as a strategy and business development professional in the food and consumer products industries, most recently as Vice President of Corporate
Strategy with the McDonald’s Corporation. Mr. Zummer has deep expertise in helping companies improve their core business strategy, launch new ventures, develop partnerships, facilitate acquisitions and divestitures, and raise capital. In
addition to his experience at McDonald’s, he previously advised numerous consumer products companies while with the Boston Consulting Group and as an independent consultant. He also worked in both the Risk and New Venture groups at Capital One
Financial. After college, Mr. Zummer served as a Marine Corps officer including service in Operation Desert Storm. He holds an MBA from the University of Chicago and a BA in Economics from Northwestern University.
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Past performance by our management team and their respective affiliates is not a guarantee either
(i) that we will be able to locate a suitable candidate for our initial business combination or (ii) of success with respect to any business combination we may consummate. Our officers and directors have not had management experience with
special purpose acquisition corporations in the past. You should not rely on the historical performance of our management team and their respective affiliates as an indication of the future performance of an investment in our company or the returns
we will, or are likely to, generate going forward.
Our Core Operating Principles
Foresight has a unique and differentiated set of capabilities that we believe position us well to find an attractive company where we will be able drive
stockholder value upon effectuating a business combination. These core operating principles, collectively, have helped craft our approach to partnering with founders and management teams where we can specifically add value.
Our Industry Focus
Our business strategy is to identify and complete an initial business combination with a target business within the technology-enabled consumer or consumer
healthcare industries. Changes in purchasing behavior and the evolution of health continue to create significant disruption – as a result, these industries are poised for strong, sustained, long-term growth. We will seek target businesses in
these industries that are positioned to unlock these disruptive forces. We believe our team brings unparalleled experience and capabilities across the consumer and consumer health industries and that we are uniquely suited to identify and capture
the potential of target businesses within these industries. We expect the target business to have an enterprise valuation greater than $1 billion. We may look to deploy additional capital through strategic M&A in order for any target
business to expand its offerings and become a platform business.
We will seek to effectively employ our management team’s investment acumen,
operational skills and experience, as well as their extensive networks to add value to a target business. We believe that the experience of our management team can guide a target business through a number of growth and efficiency initiatives,
including attracting and retaining customers, strategically spending capital on research and development, focusing sales and marketing initiatives, and inorganically rounding out product suites, among others. We will seek to generate capital
appreciation for our stockholders by focusing on sustainable growth while ensuring healthy profitability.
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Investment Criteria
We will employ the below criteria and guidelines that we believe are important in evaluating prospective target businesses. We will use these criteria and
guidelines in evaluating initial business combination opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines.
Sources
of Target Businesses
Our sponsor team’s significant operating and transaction experience and relationships will provide us with a substantial
number of potential business combination targets. Over the course of their careers, our team has developed a broad network of contacts and corporate relationships around the world and across multiple industries. We believe this network provides our
management team with a robust and consistent flow of acquisition opportunities which we believe are proprietary. In addition, we anticipate that target business candidates will be brought to our attention from various sources, including private
equity and venture capital fund managers, family office principals and corporations seeking to divest non-core assets or operating segments.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, directors or officers, or making the
acquisition through a joint venture or other form of shared ownership with our sponsor, directors or officers. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, directors or officers,
we, or a committee of independent and disinterested directors, would obtain an opinion from an independent investment banking firm or another valuation or appraisal firm that regularly renders fairness opinions on the type of target business we are
seeking to acquire that such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Our Acquisition Process
We believe that conducting
comprehensive due diligence on a prospective business combination is particularly important. We expect to utilize the diligence, rigor, and expertise of our management team to evaluate potential targets’ strengths, weaknesses, and opportunities
to identify the relative risk and return profile of any potential target for our initial business combination.
In evaluating a prospective target
business, we expect to conduct a due diligence review which may encompass, among other things: meetings with incumbent management and employees, document reviews, interviews of
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customers and suppliers, inspections of facilities, as well as reviewing financial and other information which will be made available to us. We may also seek to utilize consultants or experts
once we identify a particular target of interest.
We are not prohibited from pursuing an initial business combination with a business that is affiliated
with our initial stockholders, officers, directors, or any of their respective affiliates. In the event we seek to complete our initial business combination with a business that is affiliated with our initial stockholders, officers or directors, or
any of their affiliates, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that our initial business combination is
fair to us from a financial point of view.
Each of our officers and directors presently has, and any of them in the future may have additional fiduciary
or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities. Accordingly, if any of our officers or directors becomes aware of a
business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such
entity. In addition, we may, at our option, pursue an affiliated joint acquisition with an entity to which an officer or director has a fiduciary or contractual obligation. 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 undertaking a specified future
issuance to such parties. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our business combination. Our certificate of incorporation will
provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such
opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.
Initial Business
Combination
Pursuant to Nasdaq listing rules, our initial business combination must occur with one or more target businesses that together have an
aggregate fair market value of at least 80% of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial
business combination. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly
renders valuation opinions with respect to the satisfaction of such criteria. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors. Notwithstanding the foregoing, if we
are not then listed on Nasdaq, these rules will not be applicable to us.
We anticipate structuring our initial business combination so that the
post-transaction company in which our public stockholders own or acquire shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that
the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, including an affiliated joint
acquisition as described above. However, 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 a controlling interest in
the target business sufficient for the post-transaction company not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or
acquires 50% or more of the outstanding 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
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substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result
of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100%
of the outstanding equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired by us is what will be valued for purposes of
the 80% fair market value test. If the business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together
as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.
We may, at our option, pursue an
affiliated joint acquisition. Any members of our management team or their affiliates 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 undertaking a specified future issuance to such parties.
Members of our management team directly or
indirectly own founder shares and/or private placement warrants following the Initial Public Offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to
effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors
is included by a target business as a condition to our initial business combination.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer target
businesses an alternative to the traditional initial public offering through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination. In this situation, the owners of the target business
would exchange their shares of stock in the target business for shares of our stock or for a combination of shares of our stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are various costs
and obligations associated with being a public company, we believe target businesses will find this method a more certain and cost effective method to becoming a public company than the typical initial public offering. In a typical initial public
offering, there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is
always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring. Once public, we believe the target business would then have greater access to
capital and an additional means of providing management incentives consistent with stockholders’ interests. It can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting
talented employees.
We 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 our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of
our common stock that is held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period.
Additionally, we will remain a smaller reporting
company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that year’s second
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fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by
non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.
Financial
Position
With funds available for a business combination initially in the amount of approximately $305.2 million assuming no redemptions, after
payment of the marketing fee of $11,068,750 payable pursuant to the Business Combination Marketing Agreement entered into in connection with our initial public offering (the “Marketing Fee”), we offer a target business a variety of options
such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business
combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs
and desires. However, we have not taken any steps to secure third-party financing and there can be no assurance it will be available to us.
Effecting
our Initial Business Combination
We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering
and the sale of the private placement units, our capital stock, debt or a combination of these as the consideration to be paid in our initial business combination. We may seek to complete our initial business combination with a company or business
that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity or debt or not all of the funds released from the trust account are used for payment of the
consideration in connection with our initial business combination or used for redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or
expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other businesses or for working capital.
We may seek to raise additional funds in connection with the completion of our initial business combination through a private offering of equity securities or
debt securities or loans, and we may effectuate our initial business combination using the proceeds of such offerings or loans rather than using the amounts held in the trust account.
In the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials
disclosing the business combination would disclose the terms of the financing and, only if required by applicable law or we decide to do so for business or other reasons, we would seek stockholder approval of such financing. There are no
prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any
additional funds through the sale of securities or otherwise.
Selection of a target business and structuring of our initial business combination
Nasdaq rules require that an initial business combination must be with one or more operating businesses or assets with a fair market value equal to at
least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount). The fair market value of the target or targets
will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our board of directors is not able to
independently determine the
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fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation
opinions, with respect to the satisfaction of such criteria. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the
case. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination
solely with another blank check company or a similar company with nominal operations.
In any case, we will only complete an initial business combination
if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment
company under the Investment Company Act. If less than 100% of the outstanding equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is
owned or acquired by us is what will be valued for purposes of the 80% of net assets test. There is no basis for investors to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business
combination.
To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages
of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly
ascertain or assess all of the significant risk factors.
In evaluating a prospective target business, we expect to conduct a thorough due diligence
review which may encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information that will be made available to
us.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated
with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately
completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack of business
diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend
entirely on the future performance of a single business.
By completing our initial business combination with only a single entity our lack of
diversification may subject us to numerous economic, competitive and regulatory risks. 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. Accordingly, the prospects for our success may be:
This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may
have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
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Limited ability to evaluate the target’s management team
Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business
combination with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company.
Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. While it is possible that one or more of our directors will remain associated in some capacity with us
following our initial business combination, it is highly unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will
have significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel
will remain in senior management or advisory positions with the post-business combination company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business
combination.
Following our initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target
business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Stockholders may not have the ability to approve our initial business combination
We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is
required by applicable law or stock exchange rule, or we may decide to seek stockholder approval for business or other reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we may consider and
whether stockholder approval is currently required under Delaware law for each such transaction.
Type of Transaction WhetherStockholderApproval isRequired
Purchase of assets No
Purchase of stock of target not involving a merger with the company No
Merger of target into a subsidiary of the company No
Merger of the company with a target Yes
Under Nasdaq’s listing rules, stockholder approval would typically be required for our initial business combination if,
for example:
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The decision as to whether we will seek stockholder approval of a proposed business combination in those
instances in which stockholder approval is not required by applicable law or stock exchange rule will be made by us, solely in our discretion, and will be based on business and other reasons, which include a variety of factors, including, but not
limited to:
• the expected cost of holding a stockholder vote;
• other time and budget constraints of the company; and
Permitted purchases and other transactions with respect to our securities
In the event 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 sponsors, directors, officers, advisors or any of their respective affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or
following the completion of our initial business combination.
There is no limit on the number of securities such persons may purchase. Additionally, at
any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsors, directors, officers, advisors or any of their respective affiliates may enter
into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, they have no current commitments,
plans or intentions to engage in such purchases or other transactions and have not formulated any terms or conditions for any such purchases or other transactions. None of the funds held in the trust account will be used to purchase public shares or
warrants in such transactions. Such persons will be subject to restrictions in making any such purchases when they are in possession of any material non-public information or if such purchases are prohibited
by Regulation M under the Exchange Act. 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. We have adopted, as part of an overall code of ethics and business conduct, an insider trading policy which requires insiders to refrain from purchasing securities when they are in possession of any material non-public information. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several
factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that
such a plan is not necessary.
In the event that our sponsors, directors, officers, advisors or any of their respective affiliates purchase public shares
in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling stockholders would be required to revoke
their prior elections to redeem their shares and any proxy to vote against our initial business combination. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the
Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be
required to comply with such rules.
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The purpose of any such transaction could be to (1) vote such shares in favor of the initial business
combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination, (2) reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders
for approval in connection with our initial business combination or (3) 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 initial business
combination, where it appears that such requirement would otherwise not be met. Any such transactions may result in the completion of our initial 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 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.
Our sponsors, officers, directors, advisors and/or any of their respective affiliates anticipate that they may identify the stockholders with whom our
sponsors, officers, directors, advisors or any of their respective affiliates may pursue privately negotiated transactions by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders (in the
case of public shares) following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsors, officers, directors, advisors or any of their respective affiliates enter into a private
transaction, they would identify and contact only potential selling or redeeming stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination. Such
persons would select the stockholders from whom to acquire shares based on the number of shares available, the negotiated price per share and such other factors as any such person may deem relevant at the time of purchase. The price per share paid
in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Our sponsors, officers, directors, advisors or any of their
respective affiliates will be restricted from purchasing shares if such purchases do not comply with Regulation M under the Exchange Act and the other federal securities laws.
Any purchases by our sponsors, officers, directors and/or any of their respective affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will be restricted unless such purchases are made in compliance with Rule 10b-18, which is a safe harbor from liability for
manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order
for the safe harbor to be available to the purchaser. Our sponsors, officers, directors and/or any of their respective affiliates will be restricted from making purchases of common stock if such purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
Redemption rights for public stockholders upon completion of our initial
business combination
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of common stock upon the
completion of our initial business combination at 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 initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein. At completion of the business
combination, we will be required to purchase any public shares properly delivered for redemption and not withdrawn. The amount in the trust account is initially anticipated to be $10.00 per public share. The redemption rights will include the
requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial stockholders,
officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares, private placement shares and any public shares held by them in connection
with the completion of our initial business combination.
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Manner of conducting redemptions
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our
initial business combination either: (1) in connection with a stockholder meeting called to approve the business combination; or (2) by means of a tender offer. Except as required by applicable law or stock exchange rules, the decision as
to whether we will seek stockholder approval of a proposed business combination or conduct 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. Asset
acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our
amended and restated certificate of incorporation would typically require stockholder approval. If we structure a business combination transaction with a target company in a manner that requires stockholder approval, we will not have discretion as
to whether to seek a stockholder vote to approve the proposed business combination. We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by applicable law
or stock exchange listing requirement or we choose to seek stockholder approval for business or other reasons.
If a stockholder vote is not required and
we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
Upon the public announcement of our initial business combination, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with
Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules,
our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination
until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not
redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial
business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination, and we instead may search for an alternate business combination
(including, potentially, with the same target).
If, however, stockholder approval of the transaction is required by applicable law or stock exchange
listing requirement, or we decide to obtain stockholder approval for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
• file proxy materials with the SEC.
We expect that a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a
draft proxy statement would be made available to such stockholders
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well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently
intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration.
In the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide
our public stockholders with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder approval,
we will complete our initial business combination only if a majority of the outstanding shares of our common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present in person or by
proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders, officers and directors will
count towards this quorum and have agreed to vote any founder shares, private placement shares and any public shares held by them in favor of our initial business combination. These quorum and voting thresholds and agreements, may make it more
likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction. In
addition, our initial stockholders have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares, private placement shares and any public shares held by them in
connection with the completion of a business combination.
Our amended and restated certificate of incorporation provides that in no event will we redeem
our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions. Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to
an agreement relating to our initial business combination. For example, the proposed business combination may require: (1) cash consideration to be paid to the target or its owners; (2) cash to be transferred to the target for working
capital or other general corporate purposes; or (3) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. 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 common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination (including, potentially,
with the same target).
Limitation on redemption upon completion of our initial business combination if we seek stockholder approval
Notwithstanding the foregoing redemption rights, 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 will provide 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 redeeming its shares 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,” without our prior consent. We believe the restriction described above will discourage stockholders from accumulating large blocks of shares and subsequent attempts by such
holders to use their ability to redeem their shares as a means to force us or our sponsors or their affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a
public stockholder holding more than an aggregate of 15% of the shares sold in our initial public offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us or our
sponsors or their affiliates at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 15% of the
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shares sold in our initial public offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business
combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability
to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering stock certificates in connection
with a tender offer or redemption rights
We may require our public stockholders seeking to exercise their redemption rights, whether they are
record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two
business days prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC
(Deposit/Withdrawal At Custodian) System, rather than simply voting against the initial business combination at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in
connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly
redeem its shares. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the scheduled vote on the business combination
if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of
a stockholder vote, a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of
such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through The
Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System. The transfer agent will typically charge the tendering broker a fee of approximately $80 and it would be up to the broker whether or not to pass this cost on to the
redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights
regardless of the timing of when such delivery must be effectuated.
The foregoing is different from the procedures used by many blank check companies. In
order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a holder could simply vote against
a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for him
or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of the company’s
stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which
stockholders were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for
physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is approved.
Any request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or two business days
prior to the scheduled date of the stockholder meeting set forth in our
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proxy materials, as applicable (unless we elect to allow additional withdrawal rights). Furthermore, if a holder of a public share delivered its certificate in connection with an election of
redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the
funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights
would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination is not completed, we may continue to try to complete a business combination until February 12, 2023 or
during any extended time that we have to consummate a business combination beyond such date as a result of a stockholder vote to amend our amended and restated certificate of incorporation (an “Extension Period”) .
Redemption of public shares and liquidation if no initial business combination
Our amended and restated certificate of incorporation provides that we will have only until February 12, 2023 to complete our initial business
combination. If we have not completed our initial business combination within such period or during any Extension Period, we will: (1) cease all operations except for the purpose of winding up; (2) 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 (which
interest shall be net of taxes payable, and less 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 (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors,
dissolve and liquidate, 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 within the prescribed time period.
Our initial
stockholders, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares and private placement shares
held by them if we fail to complete our initial business combination within the prescribed time period. However, if our sponsors or any of our officers, directors or any of their respective affiliates then hold any public shares, they will be
entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted time frame to complete our initial business combination.
Our sponsors, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and
restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we have not consummated our initial
business combination by February 12, 2023 or (B) 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. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be
less than $5,000,001 following such redemptions.
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We expect that all costs and expenses associated with implementing our plan of dissolution, as well as
payments to any creditors, will be funded from amounts remaining out of the proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to
cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional amount of
up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds of our initial public offering and
the sale of the private placement units, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account and any tax payments or expenses for the dissolution of the trust, the per-share redemption amount received by stockholders upon our dissolution would be $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have
higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00. Please see
“Risk Factors — 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” and other risk factors described above. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable,
if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds
sufficient to pay or provide for all creditors’ claims.
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, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would 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 challenging the enforceability of the waiver, in each case in order to gain an 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 perform an analysis of the alternatives available to it and will only enter into an
agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. 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