Skip to content
KStart free
AI InfrastructureDefenseQuantumAll studies →

QSI US Equity

Quantum-Si IncInformation Technology · Measuring & Controlling Devices, NEC · CIK 1816431 · FY ends Dec 31
$0.84
+0.05 (+7.05%)
USD · as of 2026-08-21 · marketstack

QSI · 10-K · period ended 2020-12-31

← all QSI documents
filed 2021-03-30 · EDGAR original ↗

Our rendering of the filing — original pagination and typography are not reproduced, and tables are reduced to their short label cells (the figures live on FA). Nothing is summarized: every line below is the filing's own text.

blocks 1600 of 3,076282k characters rendered

10-K

1

tm212056d1_10k.htm

FORM 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

xANNUAL REPORT PURSUANT TO SECTION

13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020

̈

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

For the transition period from

to

Commission file number: 001-39486

HighCape Capital Acquisition Corp.

(Exact name of registrant as specified in

its charter)

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number: (646)

793-3510

Securities registered pursuant to Section 12(b)

of the Act:

Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered

Securities registered pursuant to Section 12(g)

of the 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 x

Indicate by check mark if the registrant is not required to file

reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes ̈ No

x

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 x 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 x No ̈

Indicate by check mark whether the registrant is a large accelerated

filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definitions

of “large accelerated filer,” “accelerated filer,” “smaller reporting company”

and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ̈ Accelerated filer ̈

Non-accelerated filer x Smaller reporting company x

Emerging growth company x

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal

control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public

accounting firm that prepared or issued its audit report. ̈

Indicate by check mark whether the registrant is a shell company

(as defined in Rule 12b-2 of the Exchange Act). Yes x No ̈

The aggregate market value

of the Class A common stock outstanding, other than shares held by persons who may be deemed affiliates of the registrant, computed

by reference to the closing sales price for the Class A common stock on December 31, 2020, as reported on the Nasdaq Capital Market,

was approximately $122,859,600.

As of February 1, 2021, there were 11,905,000 shares of Class A

common stock and 2,875,000 shares of Class B common stock of the registrant issued and outstanding.

TABLE OF CONTENTS

PAGE

PART I

Item 1. Business 3

Item 1A. Risk Factors 22

Item 1B. Unresolved Staff Comments 44

Item 2. Properties 44

Item 3. Legal Proceedings 44

Item 4. Mine Safety Disclosures 44

PART II

Item 6. Selected Financial Data 45

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 47

Item 8. Financial Statements and Supplementary Data 48

Item 9A. Controls and Procedures 48

Item 9B. Other Information 48

PART III

Item 10. Directors, Executive Officers and Corporate Governance 48

Item 11. Executive Compensation 53

Item 14. Principal Accountant Fees and Services 57

Item 15. Exhibits, Financial Statement Schedules 57

i

CAUTIONARY NOTE REGARDING FORWARD-LOOKING

STATEMENTS

The statements contained

in this report that are not purely historical are forward-looking statements. 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 on Form 10-K

may include, for example, statements about:

● our ability to select an appropriate target business or businesses;

● our pool of prospective target businesses;

● 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 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” in

this Annual Report. 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.

1

Unless otherwise stated in this report, or the context otherwise

requires, references to:

● “management” or our “management team” are to our officers and directors;

2

PART I

Item 1. Business.

Overview

We are a blank check company incorporated on

June 10, 2020, as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition,

stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this Report

as our initial business combination. We recently identified and intend to effectuate an initial business combination with Quantum-Si

Incorporated, a Delaware corporation (“Quantum-Si”).

We have generated no operating revenues to date

and we will not generate operating revenues until we consummate our initial business combination. We expect to continue to incur

significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to complete our initial

business combination will be successful.

Initial Public Offering

On September 9, 2020, we consummated our initial

public offering (the “IPO”) of 11,500,000 units (the “Units”), which includes the issuance of 1,500,000

Units as a result of the underwriter’s exercise of their over-allotment option in full. The Units were sold at a price of

$10.00 per Unit, generating gross proceeds to the Company of $115,000,000.

Simultaneously with the closing of the initial

public offering, the Company consummated the private sale of 405,000 units (the “Private Placement Units”) to HighCape

Capital Acquisition LLC, a Delaware limited liability company and sponsor to the Company (the “Sponsor”), at a purchase

price of $10.00 per Private Placement Unit, generating gross proceeds to the Company of $4,050,000. The Private Placement Units

are identical to the Units sold in the IPO, except that the Sponsor has agreed not to transfer, assign or sell any of the Private

Placement Units (except to certain permitted transferees) until 30 days after the completion of the Company’s initial business

combination. The warrants underlying the Private Placement Units are also not redeemable by the Company so long as they are held

by the Sponsor or its permitted transferees. No underwriting discounts or commissions were paid with respect to such sale. The

issuance of the Private Placement Units was made pursuant to the exemption from registration contained in Section 4(a)(2) of the

Securities Act of 1933, as amended.

Following the Closing of the IPO, a total of

$115,000,000, comprised of $112,700,000 of the proceeds from the IPO (which amount includes $4,025,000 of the underwriter’s

deferred discount) and $2,300,000 of the proceeds of the sale of the Private Placement Units, was placed in a U.S.-based trust

account at J.P. Morgan Chase Bank, N.A. maintained by Continental Stock Transfer & Trust Company, acting as trustee.

Our Class A common stock, units and warrants

are each traded on Nasdaq under the symbols “CAPA”, “CAPAU” and “CAPAW”, respectively. Our

units began trading on Nasdaq on September 4, 2020, and our Class A common stock and warrants began trading on Nasdaq on November

13, 2020.

Business Combination Agreement

On February 18, 2021, the Company entered

into a business combination agreement with Tenet Merger Sub, Inc., our wholly-owned subsidiary (“Merger Sub”), and

Quantum (the “Business Combination Agreement”). If the Business Combination Agreement is approved by our stockholders,

and the business combination is consummated (the “Business Combination”), Merger Sub will merge with and into Quantum-Si

with Quantum-Si surviving the merger as our wholly-owned subsidiary (the “Merger”). In connection with and following

the consummation of the Merger, the Company will be renamed “Quantum-Si Incorporated” and is referred to herein as

“New Quantum-Si” as of the time following such change of name.

Quantum-Si is an innovative life sciences company

with the mission of transforming single molecule analysis and democratizing its use by providing researchers and clinicians access

to the proteome, the set of proteins expressed within a cell.

3

As a consequence of the Business Combination,

at the time the Merger becomes effective (such time, the “Effective Time”), each share of the Company’s Class B

common stock that is issued and outstanding as of immediately prior to the Effective Time will be converted, on a one-for-one basis,

into a share of New Quantum-Si Class A common stock. The Business Combination will have no effect on the Company’s Class A

common stock that is issued and outstanding as of immediately prior to the Effective Time, which will continue to remain outstanding.

Additionally, as a consequence of the Merger,

(i) each share of Quantum-Si capital stock (other than the Quantum-Si Series A preferred stock and any shares of Quantum-Si

capital stock held immediately prior to the effective time of the Merger (the “Effective Time “) that is issued and

outstanding as of immediately prior to the Effective Time will be automatically cancelled and extinguished and converted into the

right to receive a number of shares of New Quantum-Si Class A common stock, (ii) each share of Quantum-Si Series A

preferred stock that is issued and outstanding as of immediately prior to the Effective Time will be automatically cancelled and

extinguished and converted into the right to receive a number of shares of New Quantum-Si Class B common stock; (iii) each

option to purchase shares of Quantum-Si common stock, whether vested or unvested, that is outstanding and unexercised immediately

prior to the Effective Time will be assumed by New Quantum-Si and will become an option (vested or unvested, as applicable) to

purchase a number of shares of New Quantum-Si Class A common stock; and (iv) each Quantum-Si restricted stock unit outstanding

immediately prior to the Effective Time will be assumed by New Quantum-Si and will become a restricted stock unit with respect

to a number of shares of New Quantum-Si Class A common stock. New Quantum-Si Class B common stock will have the same

economic terms as New Quantum-Si Class A common stock, but the New Quantum-Si Class B common stock will have twenty (20)

votes per share.

In addition, if the Business Combination is consummated,

the Company will file the proposed amended and restated certificate of incorporation to be adopted by the Company (the “Proposed

Charter”) with the Secretary of State of the State of Delaware. As a consequence of adopting the Proposed Charter, New Quantum-Si

will adopt a dual class structure, comprised of New Quantum-Si Class A common stock, which will carry one vote per share, and New

Quantum-Si Class B common stock, which will carry twenty (20) votes per share.

Concurrently with the execution of the Business

Combination Agreement, we entered into subscription agreements (the “PIPE Investor Subscription Agreements”) with certain

institutional and accredited investors (the “PIPE Investors”), pursuant to which the PIPE Investors have agreed to

purchase, immediately prior to the Closing, an aggregate of 42,500,000 shares of the Company’s Class A common stock at a

purchase price of $10.00 per share (the “PIPE Financing”), for aggregate gross proceeds of $425.0 million.

In addition, concurrently with the execution

of the Business Combination Agreement, we entered into subscription agreements (the “Foresite Subscription Agreements”),

with certain affiliates of Foresite Capital Management, LLC (the “Foresite Funds”), pursuant to which the Foresite

Funds will be issued 696,250 shares of the Company’s Class A common stock at a price of $0.001 per share for aggregate gross

proceeds of $696.25 after a corresponding number of shares of the Company’s Class B common stock are irrevocably forfeited

by the Sponsor (as defined below) to the Company for no consideration and automatically cancelled.

In connection with our IPO, our Sponsor and our

initial stockholders (consisting of David Colpman, Antony Loebel and Robert Taub) and our other directors and officers at the time

of our IPO entered into a letter agreement (the “Sponsor Letter Agreement”) to vote their shares in favor of the Business

Combination, which will be presented at the special meeting of the stockholders (the “Special Meeting”) to vote on

certain proposals in connection with the Business Combination (the “Transaction Proposals).

In addition, concurrently with the execution

of the Business Combination Agreement, our Sponsor, David Colpman, Antony Loebel, Robert Taub, the Company, Deerfield Partners,

L.P., and Quantum-Si entered into the Sponsor Letter Agreement (the “Sponsor Letter Agreement”), pursuant to which

the Sponsor, each other holder of HighCape Class B common stock and Deerfield Partners, L.P. have agreed to, among other things,

vote in favor of the Transaction Proposals in connection with the Business Combination.

4

Dr. Jonathan Rothberg (the founder and Chairman

of Quantum Si, “Dr. Rothberg”) and certain stockholders of Quantum-Si affiliated with Dr. Rothberg (collectively, the

“supporting Quantum-Si stockholders”) entered into a support agreement (the “Quantum-Si Transaction Support Agreement”)

with the Company concurrently with the execution of the Business Combination Agreement, under which, each supporting Quantum-Si

stockholder agreed, among other things, to support and vote in favor of the Business Combination Agreement and the related agreements

to which Quantum-Si is or will be a party and the transactions contemplated thereby.

In connection with the consummation of the Business

Combination, Quantum-Si and Dr. Rothberg will enter into an agreement (the “Executive Chairman Agreement”), effective

as of the closing of the Business Combination (the “Closing”), pursuant to which Dr. Rothberg will advise New Quantum-Si’s

Chief Executive Officer and provide guidance to the New Quantum-Si Board.

The parties will also enter into an Amended and

Restated Registration Rights Agreement in connection with the Closing.

Our Management Team

Our management team is led by Mr. Kevin Rakin,

our chief executive officer, who has more than 30 years of experience in leading, investing and exiting life sciences companies

across a wide array of products and services. Mr. Rakin has been a chief executive officer, chairman and a board member for

a number of public and private life sciences companies, including Genaissance Pharmaceuticals, Inc. (“Genaissance”)

(merged with Clinical Data, Inc. (“Clinical Data”) and subsequently sold to Forest Laboratories, Inc.), Cyvek, Inc.

(sold to Bio-Techne Corporation), Ipsogen SA (sold to Qiagen Inc. (“Qiagen”)) and Collagen Matrix, Inc. (sold to Linden

Capital Partners). Prior to co-founding HighCape in 2013, Mr. Rakin was the chairman and chief executive officer of Advanced

BioHealing, Inc. (“ABH”). From 2006-2011, together with most of the members of the HighCape team, ABH grew from a company

with eight employees and no revenue to one with a revenue run rate approaching $176 million per year and over 500 employees.

In 2011, ABH was acquired by Shire Plc for $750 million.

The other member of our management team is Matt

Zuga, who will be our chief financial officer. Messrs. Rakin and Zuga co-founded HighCape and have worked on transactions together

for more than 20 years. Prior to HighCape, Mr. Zuga was a managing director with Syngenta Ventures Pte Ltd, an investment

vehicle of Syngenta Corp. He was also the founder and managing member of Red Abbey Venture Partners (“Red Abbey”),

an investment company focused on biotechnology companies. Prior to Red Abbey, Mr. Zuga was a Managing Director and head of

life sciences investment banking at Legg Mason, Inc. (“Legg Mason”).

We believe our management team is well positioned

to take advantage of the growing set of acquisition opportunities in the life sciences industry and that our contacts and relationships,

ranging from owners of private and public companies, private equity funds, venture capital firms, investment bankers, attorneys,

accountants and business brokers will allow us to generate an attractive transaction for our stockholders.

Industry opportunity

Our focus is in the life sciences industry in

the United States and other developed countries. We believe the life sciences industry is attractive for a number of reasons:

Large Target Market

The life sciences industry represents an enormous

target market. Total U.S. national health expenditure exceeds $3 trillion, and the Center for Medicare and Medicaid Services has

estimated that total healthcare spending will approach 20% of total U.S. Gross Domestic Product over the coming years. The

number of private companies in the life sciences industry is significant, with over 30,000 firms focused on various sub-sectors

of the healthcare value chain in the United States alone. The market dynamics are similar in Europe and other developed countries.

5

Broad Universe of Potential Targets

We intend to focus our investment effort broadly

across the life sciences industry, which encompasses therapeutics, devices, diagnostics and animal health. We believe that our

investment and operating expertise in healthcare across multiple industry verticals will give us a large, addressable universe

of potential targets. The diversity of the target universe and the number of largely uncorrelated sub-sectors maximizes that likelihood

that our management team will be able to identify and execute an attractive transaction.

Limited Competition

Our management team believes that the complexity

of the life sciences industry acts as a barrier to entry, requiring investors to have significant knowledge and expertise to identify

and appropriately analyze investment opportunities. Technical, clinical and scientific knowledge, an understanding of the reimbursement

environment and regulatory landscape, complex valuation methodologies, specialized accounting treatments, and regulatory and political

considerations may deter competition from generalist firms.

Favorable Trends

Total global healthcare expenditure has grown

at a pace substantially above the global economy in the recent past, and this growth is projected to continue over the years

to come, which we anticipate will include an aging population, increased prevalence of chronic disease and improved access to healthcare.

While the size of healthcare spending has grown and will continue to grow, this expense has put significant pressure on payers,

including federal and state governments as well as individuals. This dynamic provides opportunities to life sciences companies

with innovative approaches that provide better clinical outcomes and also bend the cost curve for payers. The HighCape team has

extensive experience in identifying, growing and exiting exactly these types of companies.

Acquisition Criteria

Consistent with our strategy, we have identified

the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We will

use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business

combination with a target business that does not meet these criteria and guidelines.

Life Sciences Businesses

We believe that the life sciences segment provides

the greatest number of opportunities for investment and is consistent with HighCape’s historical investment history. This

segment is where we believe we also have the strongest network to identify the greatest number of attractive opportunities and

we believe the larger market capitalization and public float of the resulting company will be more attractive to our investors.

Companies with Revenue and Earnings Growth or Potential for Revenue

and Earnings Growth

We will seek to acquire one or more businesses

that have achieved or have the potential for significant revenue and earnings growth through a combination of organic growth, synergistic

add-on acquisitions, new product markets and geographies, increased production capacity, expense reduction and increased operating

leverage.

6

Companies with, or with the Potential for, Strong Free Cash Flow

Generation

We will seek to acquire one or more businesses

that already have, or have the potential to generate, consistent, stable and recurring free cash flow when their product or products

have achieved an appropriate level of market penetration.

Strong Competitive Position

We intend to focus on acquisition targets that

have a leading, growing or niche market position in their respective industries. We will analyze the strengths and weaknesses of

target businesses relative to their competitors. We will seek to acquire one or more businesses that demonstrate advantages when

compared to their competitors, which may help to protect their market position and profitability.

Experienced Management Team

We will seek to acquire one or more businesses

with a complete, experienced management team that provides a platform for us to further develop the acquired business’s management

capabilities. We will seek to partner with a potential target’s management team and expect that the operating and financial

abilities of our executive team and board will complement their own capabilities.

Benefit from Being a Public Company

We intend to acquire one or more businesses that

will benefit from being publicly traded and can effectively utilize the broader access to capital and the public profile that are

associated with being a publicly traded company. We will focus on companies that have proven technology or products, with strong

supporting data, near and long term milestones and strong fundamentals. We do not intend to acquire start-up companies or companies

without a path to long-term profitability.

These criteria are not intended to be exhaustive.

Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these

general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that

we decide to enter into a business combination with a target business that does not meet the above criteria and guidelines, we

will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial

business combination, which, as discussed in the Company’s Form S-4, would be in the form of proxy solicitation or tender

offer materials, as applicable, that we would file with the SEC. 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 customers and suppliers, inspections of facilities, as well as reviewing financial and other information which will

be made available to us.

Initial Business Combination

Nasdaq rules require that we must complete one

or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust

account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account). We refer

to this as the 80% of net assets test. If our board of directors 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 that is a member of FINRA

or from an independent accounting firm, 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.

7

We anticipate structuring our initial business

combination so that the post-transaction company in which our public stockholders’ own shares will own or acquire 100% of

the outstanding 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, 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 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 of 1940, as amended (the “Investment Company Act”). Even

if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to

our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations

ascribed to the target and us in our initial business combination transaction. For example, we could pursue a transaction in which

we issue a substantial number of new shares in exchange for all 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 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 is

what will be valued for purposes of the 80% of net assets test. If our initial business combination involves more than

one target business, the 80% of net assets test will be based on the aggregate value of all the target businesses.

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 a target business an

alternative to the traditional initial public offering through a merger or other business combination with us. In a business

combination transaction with us, the owners of the target business may, for example, exchange their shares of stock in

the target business for our Class A common stock (or shares of a new holding company) or for a combination of our

Class A common stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe

target businesses will find this method a more expeditious and cost effective method to becoming a public company than the

typical initial public offering. The typical initial public offering process takes a significantly longer period of time than

the typical business combination transaction process, and there are significant expenses and market and other uncertainties

in the initial public offering process, including underwriting discounts and commissions, marketing and road show efforts

that may not be present to the same extent in connection with a business combination with us.

Furthermore, once a proposed initial 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 or could have negative valuation consequences. Following an initial business combination, we

believe the target business would then have greater access to capital, an additional means of providing management incentives consistent

with stockholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer

further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented

employees.

While we believe that our structure and our management

team’s backgrounds will make us an attractive business partner, some potential target businesses may view our status as a

blank check company, such as our lack of an operating history and our ability to seek stockholder approval of any proposed initial

business combination, negatively.

We are an “emerging growth company,”

as defined in the JOBS Act. 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 the IPO, (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 Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the

date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

Additionally, we are a “smaller reporting

company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain

reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.

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 prior June 30th, 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 prior June 30th.

8

Financial Position

With funds available for a business combination

initially in the amount of $110,975,000 (assuming no redemptions) after payment of $4,025,000 of deferred underwriting fees), 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 are not presently engaged in, and we will

not engage in, any operations until the time at which our initial business combination is consummated. We intend to effectuate

our initial business combination using cash from the proceeds of the IPO and the private placement of the private placement units,

the proceeds of the sale of our shares in connection with our initial business combination (including pursuant to forward purchase

agreements or backstop agreements we may enter into following the consummation of the IPO or otherwise), shares issued to the owners

of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing. 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 securities, 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 redemptions of our Class A common stock, 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 the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing

our initial business combination, to fund the purchase of other companies or for working capital.

We have selected a specific business combination

target and have entered into a business combination agreement with such target. Although our management has assessed certain risks

inherent in our potential target business with which we may combine, we cannot assure you that our assessment will result in our

identifying all risks that the target business may encounter. Furthermore, some of those risks may be outside of our control, meaning

that we can do nothing to control or reduce the chances that those risks will adversely affect the target business.

We may need to obtain additional financing to

complete our initial business combination, either because the transaction requires more cash than is available from the proceeds

held in our trust account or because we become obligated to redeem a significant number of our public shares upon completion of

the business combination, in which case we may issue additional securities or incur debt in connection with such business combination.

There are no prohibitions on our ability to issue securities or incur debt in connection with our initial business combination.

We have entered into certain PIPE subscription agreements in connection with our initial business combination as further discussed

herein. We are not currently a party to any arrangement or understanding with any third party with respect to raising any additional

funds through incurrence of debt or otherwise.

9

Sources of Target Businesses

We believe our management team’s significant

operating and transaction experience and relationships will provide us with a substantial number of potential initial business

combination targets. Over the course of their careers, the members of our management team have developed a broad network of contacts

and corporate relationships around the world, which includes private equity firms, venture capitalists and entrepreneurs. This

network has grown through the activities of our management team sourcing, acquiring and financing businesses, the reputation of

our management team for integrity and fair dealing with sellers, financing sources and target management teams and the experience

of our management team in executing transactions under varying economic and financial market conditions. In addition, members

of our management team have developed contacts from serving on the boards of directors of public companies.

This network has provided our management team

with a flow of referrals that has resulted in numerous transactions which were proprietary or where a limited group of investors

were invited to participate in the sale process. We believe that the network of contacts and relationships of our management team

will provide us important sources of investment opportunities. In addition, we anticipate that target business combination candidates

will be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds

and large business enterprises seeking to divest non-core assets or divisions.

While we do not presently anticipate engaging

the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage

these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation

to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the

extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to

us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best

interest to pursue. Payment of a finder’s fee is customarily tied to completion of a transaction, in which case any such

fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor or any of our existing officers

or directors, or any entity with which they are affiliated, be paid any finder’s fee, consulting fee or other compensation

by the company prior to, or for any services they render in order to effectuate, the completion of our initial business combination

(regardless of the type of transaction that it is). In addition, as of the date of this Form 10-K we are paying our sponsor $10,000

per month for office space, secretarial and administrative services provided to members of our management team. Any such payments

prior to our initial business combination will be made from funds held outside the trust account. Other than the foregoing, there

will be no finder’s fees, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation

paid by us to our sponsor, officers or directors, or any affiliate of our sponsor or officers prior to, or in connection with any

services rendered in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction

that it is).

We are not prohibited from pursuing an initial

business combination with a company that is affiliated with our sponsor, executive officers or directors, or completing the business

combination through a joint venture or other form of shared ownership with our sponsor, executive officers or directors. In the

event we seek to complete an initial business combination with a target that is affiliated with our sponsor, executive officers

or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm

which is a member of FINRA or a valuation or appraisal firm stating that such an initial business combination is fair to our company

from a financial point of view.

Members of our management team and our independent

directors are eligible to receive our founder shares and/or private placement units following the IPO 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 was included by a target business

as a condition to any agreement with respect to our initial business combination.

10

Each of our officers and directors

presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity

pursuant to which such officer or director is or will be required to present a business combination opportunity to such

entity. 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 business combination opportunity to such other entity. Our amended

and restated 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 the company and such opportunity is one we are legally and contractually permitted to undertake and

would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that

opportunity to us without violating another legal obligation. 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 initial business

combination.

In addition, our sponsor and our officers and

directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment

ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments

may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such

potential conflicts would materially affect our ability to complete our initial 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.

Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries,

it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line

of business. By completing our initial business combination with only a single entity, our lack of diversification may:

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. The determination as to whether

any of the members of our management team will remain with the combined company will be made at the time of our initial business

combination. 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 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 combined 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 a 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.

11

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 subject to the provisions of our amended and restated certificate of incorporation.

However, we will seek stockholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek

stockholder approval for business or other legal 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 ​ ​ Whether Stockholder Approval Is Required ​

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 be required for our initial business combination if, for example:

Permitted Purchases of Our Securities

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 sponsor, initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares

or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our

initial business combination. However, they have no current commitments, plans or intentions to engage in such transactions and

have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase

shares or public warrants in such transactions. If they engage in such transactions, they will be restricted from making any such

purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are

prohibited by Regulation M under the Exchange Act.

In the event that our sponsor, initial stockholders,

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. 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 comply with such rules.

12

The purpose of any such purchases of shares could

be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder

approval of the business combination or (ii) 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 initial business combination, where it appears that

such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number

of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection

with our initial business combination. Any such purchases of our securities 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 Class A common stock or public 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 sponsor, initial stockholders, officers,

directors and/or their affiliates anticipate that they may identify the stockholders with whom our initial stockholders, officers,

directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by

our receipt of redemption requests submitted by stockholders (in the case of Class A common stock) following our mailing of

proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors

or their affiliates enter into a private purchase, they would identify and contact only potential selling 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, whether or not such stockholder has already submitted a proxy with respect to our initial business combination but

only if such shares have not already been voted at the stockholder meeting related to our initial business combination. Our sponsor,

executive officers, directors, advisors or any of their affiliates will select which stockholders to purchase shares from based

on a negotiated price and number of shares and any other factors that they may deem relevant, and will only purchase shares if

such purchases comply with Regulation M under the Exchange Act and the other federal securities laws. Our sponsor, officers,

directors and/or their affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2)

or Rule 10b-5 of the Exchange Act. We expect any such purchases will be reported pursuant to Section 13 and Section 16

of the Exchange Act to the extent such purchases are subject to such reporting requirements.

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 Class A 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 earned on the funds held in the trust account

(net of permitted withdrawals), divided by the number of then outstanding public shares, subject to the limitations described herein.

The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute

to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters.

Our initial stockholders, sponsor, 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 and public shares they may hold in connection with

the completion of our initial business combination.

13

Limitations on Redemptions

Our amended and restated certificate of

incorporation will provide 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. In addition, our proposed initial business combination may impose a minimum cash

requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or

other general corporate purposes or (iii) the retention of cash to satisfy other conditions. 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 in

connection with such initial business combination, and all shares of Class A common stock submitted for redemption will

be returned to the holders thereof.

Source: SEC EDGAR (public domain) · 10-K for the period ended 2020-12-31, filed 2021-03-30 · accession 0001104659-21-044037

Filing HTML rendered to line-structured narrative text by the shipped reducer (datafeeds.edgar_fulltext.visible_text, keep_table_headers=True): scripts and inline-XBRL headers are dropped, and table content is reduced to its short label cells — numeric table data is not rendered and is therefore not counted. The same rendering is used for every year, so a year-over-year comparison is like for like.

The text is our rendering of the filing, not a facsimile: original pagination, typography and tables are not reproduced, and the numbers live in the financial statements (FA).

The outline locates item HEADINGS in this document. Only Items 1A and 7 have certified boundaries elsewhere in the terminal (the redline and the narrative-overlap number); every span here runs from one heading found to the next heading found.

How the outline was chosen. It is the longest chain of item headings that runs forward through both the document and the standard item order: 16 headings are on that chain and 15 further heading-shaped lines are not — the table-of-contents echo of every item, cross-references and exhibit-list mentions. Each entry's length is measured from its heading to the next heading on the chain.