Item 1A. Risk Factors.
As a smaller reporting company,
we are not required to include risk factors in this Report. However, below is a partial list of material risks, uncertainties and other
factors that could have a material effect on the Company and its operations:
For the complete list of risks
relating to our operations, see the section titled “Risk Factors” contained in our Registration Statement.
Item 1B. Unresolved Staff Comments.
Not applicable.
Item 2. Properties.
Our executive offices are
located at 600 Fifth Avenue, 22nd Floor, New York, NY 10022, and our telephone number is (908) 391-1288. The cost for our use
of this space is included in the $10,000 per month fee we accrue for office space, administrative and shared personnel support services
payable to our sponsor. We consider our current office space adequate for our current operations.
Item 3. Legal Proceedings.
To the knowledge of our management
team, there is no litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such
or against any of our property.
Item 4. Mine Safety Disclosures.
Not applicable.
18
PART II
(a) Market Information
Our units, public shares and
public warrants are each traded on Nasdaq under the symbols “MTACU,” “MTAC,” and
“MTACW,” respectively. Our units commenced public trading on December 18, 2020,
and our public shares and public warrants commenced separate public trading on February 8, 2021.
(b) Holders
On March 29, 2021, there was
one holder of record of our units, one holder of record of our shares of Class A common stock and two holders of record of our warrants.
(c) Dividends
We have not paid any cash
dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination.
The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general
financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our
initial business combination will be within the discretion of our board of directors at such time. In addition, our board of directors
is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. Further, if we incur any
indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants
we may agree to in connection therewith.
(d) Securities Authorized for Issuance Under Equity Compensation Plans.
None.
(e) Recent Sales of Unregistered Securities
None.
(f) Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
(g) Use of Proceeds from the Initial Public Offering
On December 22, 2020, the
Company consummated its initial public offering of 25,000,000 units, including 3,000,000 units issued pursuant to the partial exercise
of the underwriters’ over-allotment option. Each unit consists of one public share and one-third of one public warrant, with each
whole public warrant entitling the holder thereof to purchase one public share for $11.50 per share. The units were sold at a price of
$10.00 per unit, generating gross proceeds to the Company of $250,000,000.
A total of $250,000,000 of
the proceeds from the initial public offering (which amount includes $8,750,000 of the underwriters’ deferred discount) and the
sale of the private placement warrants, was placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A.,
maintained by Continental, acting as trustee. The proceeds held in the trust account may be invested by the trustee only in U.S.
government securities with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations
and meeting certain conditions under Rule 2a-7 under the Investment Company Act.
We paid a total of $5,000,000
in underwriting discounts and commissions, excluding a deferred underwriting discount of $8,750,000 and $411,525 for other costs and expenses
related to the initial public offering. Raymond James & Associates, Inc. agreed to defer $8,750,000 in underwriting commission (the
“deferred commission”) until the completion of the Company’s initial business combination, if any, which deferred commission
would be paid out of the trust account. Such funds will be released only upon consummation of an initial business combination. If the
business combination is not consummated, such deferred commission will be forfeited. None of the underwriters will be entitled to any
interest accrued on the deferred commission.
For a description of the use
of the proceeds generated in our initial public offering, see Part II, Item 7 of this Form 10-K.
19
Item 6. Reserved.
References to the “Company,”
“us,” “our” or “we” refer to MedTech Acquisition Corporation. The following discussion and analysis
of our financial condition and results of operations should be read in conjunction with our audited financial statements and related notes
included herein.
Cautionary Note Regarding Forward-Looking Statements
All statements other than
statements of historical fact included in this Report including, without limitation, statements under this “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy
and the plans and objectives of management for future operations, are forward- looking statements. When used in this Report, words such
as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions,
as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based
on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management.
Actual results could differ materially from those contemplated by the forward- looking statements as a result of certain factors detailed
in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company’s
behalf are qualified in their entirety by this paragraph.
The following discussion and
analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes
thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking
statements that involve risks and uncertainties.
Overview
We are a blank check company
formed under the laws of the State of Delaware on September 11, 2020 for the purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or other similar Business Combination with one or more businesses. We intend to effectuate
our business combination using cash from the proceeds of the initial public offering and the sale of the private placement warrants, our
capital stock, debt or a combination of cash, stock and debt.
We expect to continue to incur significant costs in the pursuit of
our acquisition plans. We cannot assure you that our plans to complete a business combination will be successful.
Results of Operations
We have neither engaged in
any operations (other than searching for a business combination after our initial public offering) nor generated any revenues to date.
Our only activities from September 11, 2020 (inception) through December 31, 2020 were organizational activities, those necessary to prepare
for the initial public offering, described below. We do not expect to generate any operating revenues until after the completion of our
business combination. We expect to generate non-operating income in the form of interest earned on investments held after the initial
public offering. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance),
as well as for due diligence expenses.
For the period from September
11, 2020 (inception) through December 31, 2020, we had a net loss of $105,195, which consists of operating costs of $108,493 offset
by interest income on investments held in the trust account of $3,298.
20
Liquidity and Capital Resources
On December 22, 2020, we consummated
the initial public offering of 25,000,000 units at a price of $10.00 per unit, which included the partial exercise by the underwriters
of their over-allotment option in the amount of 3,000,000, generating gross proceeds of $250,000,000. Simultaneously with the closing
of the initial public offering, we consummated the sale of 4,933,333 private placement warrants at a price of $1.50 per private placement
warrant in a private placement to our stockholders, generating gross proceeds of $7,400,000.
Following the initial public
offering, the partial exercise of the over-allotment option by the underwriters’ and the sale of the private placement warrants,
a total of $250,000,000 was placed in the trust account. We incurred $14,161,525 in transaction costs, including $5,000,000 in cash underwriting
fees, $8,750,000 of deferred underwriting fees and $411,525 of other offering costs.
For the period from September
11, 2020 (inception) through December 31, 2020, cash used in operating activities was $677,599. Net loss of $105,195 was primarily affected
by interest earned on investments held in the trust account of $3,298 and changes in operating assets and liabilities, which used $569,984
of cash from operating activities.
As of December 31, 2020,
we had cash and investments held in the trust account of $250,003,298. We intend to use substantially all of the funds held in the trust
account, including any amounts representing interest earned on the trust account to complete our business combination. We may withdraw
interest to pay taxes. During the period ended December 31, 2020, we did not withdraw any interest income from the trust account.
To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our business combination, the
remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses,
make other acquisitions and pursue our growth strategies.
As of December 31, 2020,
we had $1,334,998 of cash held outside of the trust account. We intend to use the funds held outside the trust account primarily to identify
and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants
or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements
of prospective target businesses, and structure, negotiate and complete a business combination.
In order to fund working capital
deficiencies or finance transaction costs in connection with a business combination, the sponsor, MedTech Acquisition Sponsor LLC or an
affiliate of the sponsor, or certain of the company’s officers and directors may, but are not obligated to, loan us funds as may
be required. If we complete a business combination, we would repay the working capital loans out of the proceeds of the trust account
released to us. Otherwise, the working capital loans would be repaid only out of funds held outside the trust account. In the event that
a business combination does not close, we may use a portion of proceeds held outside the trust account to repay the working capital loans
but no proceeds held in the trust account would be used to repay the working capital loans. The working Capital Loans would either be
repaid upon consummation of a business combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such working
capital loans may be convertible into warrant of the post business combination entity. The warrants would be identical to the private
placement warrants. Except for the foregoing, the terms of such working capital loans, if any, have not been determined and no written
agreements exist with respect to such loans.
We do not believe we will
need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the
costs of identifying a target business, undertaking in-depth due diligence and negotiating a business combination are less than the actual
amount necessary to do so, we may have insufficient funds available to operate our business prior to our business combination. Moreover,
we may need to obtain additional financing either to complete our business combination or because we become obligated to redeem a significant
number of our public shares upon consummation of our business combination, in which case we may issue additional securities or incur debt
in connection with such business combination. Subject to compliance with applicable securities laws, we would only complete such financing
simultaneously with the completion of our business combination. If we are unable to complete our business combination because we do not
have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our
business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
21
Off-Balance Sheet Financing Arrangements
We have no obligations, assets
or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2020. We do not participate in transactions
that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which
would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet
financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any
non-financial assets.
Contractual Obligations
We do not have any long-term
debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor a monthly
fee of $10,000 for office space, utilities, secretarial and administrative support services. We began incurring these fees on December
22, 2020 and will continue to incur these fees monthly until the earlier of the completion of the business combination and its liquidation.
The underwriters are entitled to a deferred fee
of $0.35 per unit, or $8,750,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held
in the trust account solely in the event that the Company completes a business combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies
The preparation of financial
statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets
and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially
differ from those estimates. We have identified the following critical accounting policies:
Class A Common Stock Subject to Possible Redemption
We account for our Class A
common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic
480 “Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption is classified
as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption
rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within
our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our Class
A common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain
future events. Accordingly, shares of Class A common stock subject to possible redemption are presented as temporary equity, outside
of the stockholders’ equity section of our balance sheet.
Net Income (Loss) per Common Share
We apply the two-class method in calculating earnings per share. Net
income per common share, basic and diluted for Class A common stock is calculated by dividing the interest income earned on the trust
account, net of applicable franchise and income taxes, by the weighted average number of Class A common stock outstanding for the
period. Net loss per common share, basic and diluted for Class B common stock is calculated by dividing the net income, less income
attributable to Class A common stock, by the weighted average number of Class B common stock outstanding for the period presented.
Recent Accounting Standards
Management does not believe
that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our
financial statements.
22
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
As of December 31, 2020, we were not subject to any market or interest
rate risk. Following the consummation of our initial public offering, the net proceeds of our initial public offering, including amounts
in the trust account, have been invested in U.S. government treasury obligations with a maturity of 185 days or less or in certain money
market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated
material exposure to interest rate risk.
Item 8. Financial Statements and Supplementary Data.
This information appears following
Item 15 of this Report and is included herein by reference.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures
that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act,
such as this Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms.
Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management,
including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management evaluated, with the participation of our current chief executive officer and chief financial officer (our “Certifying
Officers”), the effectiveness of our disclosure controls and procedures as of December 31, 2020, pursuant to Rule 13a-15(b)
under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of December 31, 2020, our disclosure controls
and procedures were effective.
We do not expect that our
disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how
well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures
are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the
benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no
evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and
instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood
of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions.
Management’s Report on Internal Controls
over Financial Reporting
This Report does not include
a report of management’s assessment regarding internal control over financial reporting or an attestation report of our registered
public accounting firm due to a transition period established by the rules of the SEC for newly public companies.
Changes in Internal Control over Financial
Reporting
There were no changes in
our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the
most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
Item 9B. Other Information.
None.
23
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Directors and Executive Officers
As of the date of this Report,
our directors and officers are as follows:
Name Age Position
Karim Karti 52 Chairman
Christopher C. Dewey 76 Chief Executive Officer and Director
David J. Matlin 59 Chief Financial Officer and Director
Robert H. Weiss 62 Chief Administrative Officer and Secretary
Maurice R. Ferré, MD 60 Director
Ivan Delevic 55 Director
Martin Roche, MD 54 Director
Thierry Thaure 58 Director
The experience of our directors
and executive officers is as follows:
Karim Karti has
served as Chairman of our board of directors since December 2020. Mr. Karti is a highly experienced healthcare executive. He was
the Chief Operating Officer of iRhythm Technologies, Inc. (Nasdaq: IRTC), a digital healthcare company, from July 2018 until March 2020,
and was instrumental in launching new products and developing alliances with leading industry participants, including Verily Life Sciences,
LLC, a subsidiary of Alphabet Inc. Mr. Karti previously was an officer of General Electric Company (NYSE: GE) (“GE”),
where he worked for 22 years and most recently served as President and Chief Executive Officer of the GE Healthcare Imaging division
from 2016 to 2018. He also served as Chief Marketing Officer for the GE Healthcare division from 2012 to 2015, as well as the President
and Chief Executive Officer of GE Healthcare Emerging Markets and GE Healthcare Korea from 2009 to 2012. Mr. Karti initially was
a member of the corporate audit and M&A teams at GE from 1996 to 2000, and started his career with The Procter & Gamble Company
(NYSE: PG) in Brand Management in 1993. He has served on the board of directors of Braid Health, Inc. since February 2021. He received
his undergraduate degree from Ecole Centrale de Lyon and completed the entrepreneurship program at Ecole Superieure de Commerce de Lyon
in 1992. Our board has determined that Mr. Karti’s significant experience as a public company healthcare executive qualifies
him to serve as a member of our board of directors.
Christopher C. Dewey has served as our Chief Executive Officer and director since September
2020. He has significant experience with medical devices and has been a Managing Director of Ceros Financial Services, Inc., an investment
advisory firm, since 2019. Mr. Dewey was a founding board member of MAKO Surgical Corp., a transformational robotic surgical company,
where he served on the board from its founding in 2004 until its $1.65 billion sale to Stryker Corp. in 2013 and held positions on
the audit and compensation committees. He has been a founding investor and/or board member of many medical technology startups, including:
Auris Surgical Robotics, Inc. (board member from 2012 to 2014), PROCEPT BioRobotics Corp., ShockWave Medical, Inc. (Nasdaq: SWAV) (board
member from 2011 to 2014), OrthoSensor, Inc. (board member from 2009 to 2014 and 2019 until the sale of the company to Stryker Corp. in
2020), DermaSensor, Inc. (board member from 2011 to present), Heru, Inc. (board observer from 2019 to present), Cephea Valve Technologies,
Inc. (board member from 2013 to 2019), GI Windows Corp., HistoSonics, Inc., Magic Leap, Inc., Memic Innovative Surgery, Inc. (advisor
to the board from 2017 to present), MIVI Neuroscience, Inc. (board member from 2018 to present), Potrero Medical, Inc., Pristine Surgical,
LLC, TriFlo Cardiovascular Inc. (board member from 2019 to present), and Obvius Robotics, Inc. since March 2021. From 1966 to 1979, Mr. Dewey
was a Founder and President of The Cannon Group, Inc. (i.e., Cannon Films), which was the one of the first independent film companies
to finance, produce and distribute motion pictures worldwide. He also has had a successful career on Wall Street serving as Executive
Vice President and Head of High Yield Sales at Jefferies & Co. from 1994 until 2007, and subsequently was Vice Chairman of National
Securities Corp. from 2007 until 2011. Mr. Dewey was a Partner and Institutional Sales Manager in High Yield Fixed Income at Bear,
Stearns & Co. from 1980 to 1990, and Managing Partner of Scully Brothers & Foss/The Marion Group, L.P. until 1994. He holds an
MBA from The Wharton Graduate School of Business. Our board has determined that Mr. Dewey’s experience as director of medical
technology companies, including public company experience, qualifies him to serve as a member of our board of directors.
24
David J. Matlin has
served as our Chief Financial Officer and director since September 2020. Mr. Matlin is also the co-founder and Chief Executive Officer
of MatlinPatterson Global Advisers LLC, or MatlinPatterson, a distressed securities investment manager, which he co-founded in July 2002,
and which has substantially wound down its activities. Mr. Matlin was also Chief Executive Officer of MatlinPatterson Asset Management
L.P. and its operating joint venture affiliates that managed non-distressed credit strategies, from 2015 to 2018. Prior to forming MatlinPatterson,
Mr. Matlin was a Managing Director at Credit Suisse, and headed their Global Distressed Securities Group upon its inception in 1994.
Mr. Matlin was also a Managing Director and a founding partner of Merrion Group, L.P., an investment advisory firm, from 1988 to
1994. He began his career as a securities analyst at Halcyon Investments from 1986 to 1988. Mr. Matlin has served as a member of
the board of directors of Flagstar Bank FSB, a federally charted savings bank, and Flagstar Bancorp, Inc. (NYSE: FBC), a savings and loan
holding company since 2009. Mr. Matlin also serves on the board of directors of US Well Services Inc. (Nasdaq: USWS) (formerly Matlin
& Partners Acquisition Corporation) and was Chief Executive Officer and Chairman of the company prior to its business combination
with US Well Services LLC. He also serves on the boards of directors of Dermasensor, Inc. and Pristine Surgical LLC, which are medical
device manufacturers. Since 2020, he has been an observer of the board and a board member (since December 2020) of Clene Nanomedicine,
Inc., a biopharmaceutical manufacturer, and since 2020, he has served on the board of Traffk, LLC, an insurance-based data analytics company.
Previously, he served on the board of directors of CalAtlantic Group, Inc. (NYSE: CAA), a U.S. homebuilder, from 2009 to 2018, Global
Aviation Holdings, Inc., an air charter company, from 2006 to 2012, and Huntsman Corporation (NYSE: HUN), a U.S. chemicals manufacturer,
between 2005 and 2007 and Orthosensor, Inc. until the sale of the company to Stryker Corp. in December 2020. Mr. Matlin holds a JD
degree from the Law School of the University of California at Los Angeles and a BS in Economics from the Wharton School of the University
of Pennsylvania. Our board has determined that Mr. Matlin’s significant public company board experience qualifies him to serve
as a member of our board of directors.
Robert H. Weiss has
served as our Chief Administrative Officer and Secretary since September 2020. Mr. Weiss was General Counsel and a Partner of MatlinPatterson
Global Advisers LLC and its affiliates from 2002 until 2020. Prior to joining MatlinPatterson in 2002, Mr. Weiss was a Managing Director
at Deutsche Asset Management, where he was responsible for hedge fund and fund-of-funds administration, accounting, and product-related
legal and compliance functions from 1996 to 2002. From 1991 to 1996, Mr. Weiss was General Counsel to Moore Capital Management, Inc.
and Senior Vice President within the futures and managed futures business of Lehman Brothers from 1989 to 1991, as well as Associate General
Counsel from 1986 to 1989. Mr. Weiss began his career in the legal department of futures commission merchant Johnson Matthey &
Wallace, Inc. in 1983. Mr. Weiss holds a JD degree from Hofstra Law School and an AB cum laude in Political Science from Vassar College.
Maurice R. Ferré,
MD has served as our director since December 2020. Dr. Ferré is also the Chief Executive Officer and Chairman of
the Board of INSIGHTEC Ltd., an innovator of incisionless surgery, a role he has held since January 2015. Dr. Ferré has also
served as the Chairman of Memic Innovative Surgery, Inc. since 2015, Chairman of DermaSensor, Inc. since 2011, a director of Heru, Inc.
since 2020 and a director of MIVI Neuroscience, Inc. since 2018. Dr. Ferré brings over 20 years of experience as a serial
entrepreneur in the medical technology industry. From 2004 to 2014, Dr. Ferré served as Chief Executive Officer and Chairman
of the Board of MAKO Surgical Corporation, a transformational robotic surgical company that he co-founded. The company was later acquired
by Stryker Corp in 2013. Prior to that, Dr. Ferré was founder, Chief Executive Officer and President of Visualization Technology
Inc. (“VTI”) from 1993 to 2003. VTI became a world leader in image-guided surgery with a navigation platform for ENT and was
acquired by GE Healthcare. Dr. Ferré received his Doctor of Medicine and Master of Public Health from Boston University in
1992. He was the recipient of the Ernst & Young 2007 Entrepreneur of the Year Award and was awarded BioFlorida’s Lifetime Achievement
Award in 2018. Dr. Ferré is a member of the Board of Trustees for Boston University and is also active on the boards of The
Everglades Foundation and Endeavor Miami. Our board has determined that Dr. Ferré’s experience as a director at medical
technology companies qualifies him to serve as a member of our board of directors.
Ivan
Delevic has served as our director since December 2020. He brings a wealth of medical device industry experience from his
25 years with Johnson & Johnson (NYSE: JNJ), GE Healthcare, and MAKO Surgical Corp., a transformational robotic surgical
company, where he served as Senior Vice President of Corporate Development from 2009 until its $1.65 billion sale to Stryker Corp.
in 2013. Mr. Delevic served as the Chief Executive Officer and President of OrthoSensor, Inc., a leader in orthopedic sensor
technologies, from October 2014 and a director of the board of directors of OrthoSensor, Inc. from 2015 until the company was sold
to Stryker Corp. in December 2020. He previously served in several capacities at GE Healthcare from 1996 to 2007, including General
Manager of Molecular Imaging EMEA, Global Marketing and Sales VP for Surgical Navigation. Mr. Delevic holds board positions at
several medical device and healthcare companies, including: DermaSensor Inc. (since 2015), Pristine Surgical Corp. (since 2017) and
EnMovi Ltd. (from 2019 through January 2021), and was a director of INSIGHTEC Ltd. from January 2015 to January 2021. He served as a
consultant to INSIGHTEC Ltd. from November 2020 until January 2021 when he became INSIGHTEC’s Senior Vice President of
Strategic Marketing and Business Development. Mr. Delevic holds an MBA from the Technical University of Budapest through a joint
program with Herriot-Watt University and a M.Sc. in Electrical Engineering from the Technical University of Budapest. Our board has
determined that Mr. Delevic’s experience serving on boards of medical device companies qualifies him to serve as a member of
our board of directors.
25
Martin W. Roche, MD has
served as our director since December 2020. He is a practicing orthopedic surgeon specializing in robotic and sensor assisted knee surgery
at Holy-Cross Hospital in Fort Lauderdale, Florida since 1996, and is Director of Arthroplasty for the “Hospital for Special Surgery
Florida”. He serves as a member of the American and European Knee Society. Dr. Roche was the designing surgeon and performed
the first robotic assisted Makoplasty partial and total knee arthroplasty. He has published and lectured extensively in the field of orthopedics
and holds over 100 patents focused on medical technology. He was the founder of OrthoSensor, Inc. and served as its Chief Medical Officer
and director from 2008 until the sale of the company to Stryker Corp. in December 2020. He is a consultant to Stryker Orthopedics and
Pristine Surgical, LLC. He received his MD in Biology from University College Cork in Ireland, and completed his Orthopedic Residency
at Jackson Memorial Hospital in Miami, Florida. Our board has determined that Dr. Roche’s expertise in the medical technology
field and director experience qualifies him to serve as a member of our board of directors.
Thierry Thaure has served
as our director since March 2021. Mr. Thaure has over 35 years of experience in medical device technology as an entrepreneur, senior executive
and director. Since 2019, Mr. Thaure has been Chief Executive Officer and a Director of Triflo Cariovascular, Inc., a company that is
developing a technology for the treatment of tricuspid regurgitation. From 2012 to 2019, he was co-Founder and Chief Executive Officer
of Cephea Valve Technologies, Inc., a company that developed a percutaneous mitral valve replacement technology and was purchased by Abbott
Laboratories in 2019. Previously, he served as Chief Executive Officer from 2004 to 2011 of EndoGastric Solutions, Inc., a medical technology
company that develops incisionless transoral procedures for the treatment of GERD, Senior Vice President and General Manager from 2001
to 2004 of Accuray, Inc. (Nasdaq: ARAY), a leader in radiosurgery which he helped take public, and was founding Vice President of Sales
& Marketing from 1997 to 2001 at Intuitive Surgical, Inc. (Nasdaq: ISRG), a medical robotics company designing products to improve
clinical outcomes of patients through minimally invasive surgery. Prior to that, Mr. Thaure held engineering, marketing and business development
roles at Guidant Corp. and American Hospital Supply Corp. in their Cardiovascular divisions. During his career, Mr. Thaure has served
as board member for several public and private companies, including Pulse Biosciences, Inc. (Nasdaq: PLSE) from 2015 to 2017, where he
served on its Compensation and Governance Committees, and was Chairman of its Audit Committee. He also served on the following private
company boards: Mauna Kea Technologies Inc. from 2001 to 2012, Aquyre Bioscience Inc. since 2019, and FlexDex Inc from 2019 to 2020 and
has served on the board of GT Metabolic Solutions, Inc. since May 2020. Mr. Thaure holds a B.S. in Chemistry and Biomedical Engineering
from Duke University and an M.B.A. from the J.L. Kellogg Graduate School of Management at Northwestern University. Our board has determined
that Mr. Thaure’s experience as a director of medical technology companies, including public company experience, qualifies him to
serve as a member of our board of directors.
Special Advisor
Michael Stansky has
served as our special advisor since December 2020. Mr. Stansky was a Managing Director of Tudor Investment Corporation where he was responsible
for long/short equity and venture capital investments. He joined Tudor Investment Corporation in January 1994 and retired from active
investment management in 2008. From 1985 to 1994, Mr. Stansky was an analyst and portfolio manager at Wellington Management Company.
In his personal capacity, as well as at Tudor Investment Corporation, he has been an early stage or crossover investor and/or served on
the boards of directors of several healthcare companies, including ShockWave Medical, Inc., MAKO Surgical Corp., TransMedix Group (Nasdaq:
TMDX) and Healtheon (now WebMD). He served as Chairman of OrthoSensor, Inc. until the company was acquired by Stryker Corp. in December
2020 and serves on the board of INSIGHTEC Ltd. Mr. Stansky also serves on the Investment Committee of Leerink Revelation Healthcare Fund.
He holds a B.A. in Accounting from the University of Massachusetts and a M.B.A. from Harvard Business School. Mr. Stansky is a Certified
Public Accountant and a Chartered Financial Analyst.
Our special advisor (i)
assists us in sourcing and negotiating with potential business combination targets, (ii) provides his business insights when we
assess potential business combination targets and (iii) upon our request, will provide his business insights as we work to create
additional value in the businesses that we acquire. In this regard, he fulfills some of the same functions as our board members.
However, he has no written advisory agreement nor employment or compensation arrangements with us. Moreover, our special advisor is
not under any fiduciary obligations to us nor does he perform board or committee functions, nor does he have any voting or decision
making capacity on our behalf. He also is not required to devote any specific amount of time to our efforts and is not subject to
the fiduciary requirements to which our board members are subject. Accordingly, if our special advisor becomes aware of a business
combination opportunity which is suitable for any of the entities to which he has fiduciary or contractual obligations (including
other blank check companies), he will honor his fiduciary or contractual obligations to present such business combination
opportunity to such entity, and only present it to us if such entity rejects the opportunity. We may modify or expand our roster of
advisors as we source potential business combination targets or create value in businesses that we may acquire.
26
Number and Terms of Office of Officers and
Directors
We have seven directors. Our
board of directors is divided into two classes with only one class of directors being elected in each year and each class (except for
those directors appointed prior to our first annual meeting of stockholders) serving a two-year term. In accordance with Nasdaq corporate
governance requirements, we are not required to hold an annual meeting until one full year after our first fiscal year end following our
listing on Nasdaq.
The term of office of the first
class of directors, consisting of Messrs. Karti, Roche, and Thaure and Dr. Ferré will expire at our first annual meeting of stockholders.
The term of office of the second class of directors, consisting of Messrs. Delevic, Matlin and Dewey, will expire at the second annual
meeting of stockholders.
Our officers are appointed
by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of
directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our
officers may consist of a Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, Vice Presidents, Secretary,
Treasurer, Assistant Secretaries and such other offices as may be determined by the board of directors.
Committees of the Board of Directors
Our board of directors has
two standing committees: an audit committee and a compensation committee. Subject to phase-in rules and a limited exception, Nasdaq rules
and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors,
and Nasdaq rules require that the compensation committee of a listed company each be comprised solely of independent directors. Each committee
operates under a charter that complies with Nasdaq rules, has been approved by our board of directors and has the composition and responsibilities
described below.
Audit Committee
We have established an audit
committee of our board of directors. Messrs. Delevic and Karti and Dr. Ferré serve as members of our audit committee, and Mr. Delevic
chairs the audit committee. Under Nasdaq listing standards and applicable SEC rules, we are required to have at least three members of
the audit committee, all of whom must be independent. Each of Messrs. Delevic and Karti and Dr. Ferré meets the independent director
standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act. Each member of the audit committee is financially
literate and our board of directors has determined that Mr. Delevic qualifies as an “audit committee financial expert”
as defined in applicable SEC rules.
We have adopted an audit committee
charter, which details the principal functions of the audit committee, including:
27
Compensation Committee
We have established a compensation
committee of our board of directors. Mr. Roche and Dr. Ferré serve as members of our compensation committee. Under Nasdaq listing
standards and applicable SEC rules, we are required to have at least two members of the compensation committee, all of whom must be independent.
Dr. Ferré chairs the compensation committee.
We have adopted a compensation
committee charter, which details the principal functions of the compensation committee, including:
● reviewing on an annual basis our executive compensation policies and plans;
Notwithstanding the foregoing,
other than the amount payable to our sponsor of $10,000 per month for office space, utilities and secretarial and administrative support,
reimbursement of expenses, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our
existing stockholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in order to
effectuate the consummation of an initial business combination. Accordingly, it is likely that prior to the consummation of an initial
business combination, the compensation committee will only be responsible for the review and recommendation of any compensation arrangements
to be entered into in connection with such initial business combination.
The charter also provides that
the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other
adviser and is directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging
or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee considers
the independence of each such adviser, including the factors required by Nasdaq and the SEC.
28
Director Nominations
We do not have a standing nominating
committee, though we intend to form a corporate governance and nominating committee as and when required to do so by law or Nasdaq rules.
In accordance with Rule 5605 of the Nasdaq rules, a majority of the independent directors may recommend a director nominee for selection
by the board of directors. The board of directors believes that the independent directors can satisfactorily carry out the responsibility
of properly selecting or approving director nominees without the formation of a standing nominating committee. The directors who participate
in the consideration and recommendation of director nominees are Messrs. Karti, Delevic and Roche and Dr. Ferré. In accordance
with Rule 5605 of the Nasdaq rules, all such directors are independent. As there is no standing nominating committee, we do not have
a nominating committee charter in place.
The board of directors also
consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to
stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders
that wish to nominate a director for election to our board of directors should follow the procedures set forth in our bylaws.
We have not formally established
any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying
and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge
of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.
Code of Ethics
We have adopted a Code of Ethics
applicable to our directors, officers and employees. You are able to review this document by accessing our public filings at the SEC’s
web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We
intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Item 11. Executive Compensation
Compensation Discussion and Analysis
None of our officers has received
any cash compensation for services rendered to us. We accrue a total of $10,000 per month for office space, utilities and secretarial
and administrative support payable to our sponsor. Upon completion of our initial business combination or our liquidation, we will cease
paying these monthly fees. Other than as set forth elsewhere in this Report, no compensation of any kind, including any finder’s
fee, reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to our officers and directors or
their respective affiliates 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). However, these individuals are reimbursed for any out-of-pocket
expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence
on suitable business combinations. We do not have a policy that prohibits our sponsor, executive officers or directors, or any of their
respective affiliates, from negotiating for the reimbursement of out-of-pocket expenses by a target business. Our audit committee reviews
on a quarterly basis all payments that were made to our sponsor, officers or directors, or our or their affiliates. Any such payments
prior to an initial business combination will be made using funds held outside the trust account. Other than quarterly audit committee
review of such payments, we do not expect to have any additional controls in place governing our reimbursement payments to our directors
and executive officers for their out-of-pocket expenses incurred in connection with identifying and consummating an initial business combination.
After the completion of
our initial business combination, directors or members of our management team who remain with us may be paid consulting or
management fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in
the proxy solicitation materials or tender offer documents furnished to our stockholders in connection with a proposed initial
business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our
directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed initial
business combination, because the directors of the post-combination business will be responsible for determining officer and
director compensation. Any compensation to be paid to our officers will be determined, or recommended to the board of directors for
determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent
directors on our board of directors.
29
We do not intend to take any
action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination,
although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with
us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions
with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability
of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision
to proceed with any potential business combination. We are not party to any agreements with our officers and directors that provide for
benefits upon termination of employment.
The compensation committee
has reviewed and discussed this Compensation Discussion and Analysis with management and, based upon its review and discussions, the compensation
committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this Report.
The following table sets forth
information regarding the beneficial ownership of our common stock as of March 29, 2021 based on information obtained from the persons
named below, with respect to the beneficial ownership of common stock, by:
● all our executive officers and directors as a group.
In the table below, percentage
ownership is based on 31,250,000 shares of our common stock, consisting of (i) 25,000,000 shares of our Class A common stock and (ii)
6,250,000 shares of our Class B common stock, issued and outstanding as of March 29, 2021. On all matters to be voted upon holders of
the shares of Class A common stock and shares of Class B common stock vote together as a single class. Currently, all of the shares of
Class B common stock are convertible into Class A common stock on a one-for-one basis.
Unless otherwise indicated,
we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially
owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants
are not exercisable within 60 days of the date of this Report.
Class A Common Stock Class B Common Stock
Robert H. Weiss — — —
Karim Karti — — —
Maurice R. Ferré, MD — — —
Ivan Delevic — — —
Martin W. Roche, MD — — —
Thierry Thaure — — —
Wellington Management Group LLP (7) 1,954,565 7.8 % — — 6.3 %
30
Securities Authorized for Issuance under Equity
Compensation Table
None.
Changes in Control
None.
In September 2020,
our sponsor purchased 5,750,000 founder shares (up to an aggregate of 750,000 shares of which were subject to forfeiture depending
on the extent to which the underwriters’ over-allotment option is exercised). In December 2020, we effected a stock dividend
for 0.1 shares for each share of Class B common stock outstanding, resulting in our sponsor holding an aggregate of 6,325,000
founder shares (up to an aggregate of 825,000 shares of which were subject to forfeiture depending on the extent to which the
underwriters’ over-allotment option is exercised). As a result of the underwriters’ partial exercise of its
over-allotment option, our sponsor forfeited 75,000 founder shares, resulting in ownership of 6,250,000 founder shares. The founder
shares (including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be
transferred, assigned or sold by the holder until the earlier to occur of: (A) one year after the completion of our initial business
combination or (B) subsequent to our initial business combination, (x) if the reported closing price of our Class A common stock
equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like)
for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y)
the date on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our
stockholders having the right to exchange their shares of common stock for cash, securities or other property.
31
On December 22, 2020, simultaneously
with the closing of our initial public offering, our sponsor purchased an aggregate of 4,933,333 private placement warrants for a purchase
price of $1.50 per warrant. Our sponsor’s interest in this transaction is valued at $7,400,000. Each private placement warrant
entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share. The private placement
warrants (including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred,
assigned or sold by the holder until 30 days after the completion of our initial business combination.
Commencing on December 17,
2020, we started to accrue an amount payable to our sponsor a total of $10,000 per month for office space, utilities and secretarial and
administrative support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
Notwithstanding the foregoing,
as indicated above, other than the amount payable to our sponsor of $10,000 per month, for up to 24 months, for office space, utilities
and secretarial and administrative support, reimbursement of expenses, no compensation of any kind, including any finder’s fee,
reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to our officers and directors or any of
their affiliates, prior to, or in connection with any services rendered in order to effectuate, the consummation of an initial business
combination (regardless of the type of transaction that it is). However, these individuals are reimbursed for any out-of-pocket expenses
incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable
business combinations. We do not have a policy that prohibits our sponsor, executive officers or directors, or any of their respective
affiliates, from negotiating for the reimbursement of out-of-pocket expenses by a target business. Our audit committee reviews on a quarterly
basis all payments that were made to our sponsor, officers, directors or our or any of their affiliates and will determine which expenses
and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred
by such persons in connection with activities on our behalf.
Prior to the closing of our
initial public offering, our sponsor agreed to loan us up to an aggregate of $300,000 to be used for a portion of the expenses of our
initial public offering. As of December 22, 2020, we had borrowed $178,080 under the promissory note with our sponsor. These loans were
non-interest bearing, unsecured and were due at the earlier of March 31, 2021 or the closing of our initial public offering, which
occurred on December 22, 2020. The loan was repaid upon the closing of our initial public offering out of the estimated $1,500,000 of
offering proceeds that was allocated to the payment of offering expenses (other than underwriting commissions) not held in the trust account.
The value of our sponsor’s interest in this transaction corresponds to the principal amount outstanding under any such loan.
In addition, in order to finance
transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of
our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete an initial business combination,
we would repay such loaned amounts. In the event that the initial business combination does not close, we may use a portion of the working
capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment.
Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The
warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. The
terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such
loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties
will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
After our initial business
combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company
with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the proxy solicitation materials or tender
offer documents, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time
of distribution of such proxy solicitation materials or tender offer documents, as applicable, as it will be up to the directors of the
post-combination business to determine executive and director compensation.
On December 17, 2020, we entered