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Subsequent Events
12 Months Ended
Dec. 31, 2021
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

27. SUBSEQUENT EVENTS

 

The Company evaluated its financial statements for subsequent events through March 30, 2022, the date the financial statements were available to be issued. The Company is not aware of any subsequent events which would require recognition or disclosure in the financial statements except as discussed below.

 

Acquisition by Patient Square Capital

 

On February 2, 2022, the Company entered into a definitive agreement to be acquired by affiliates of investment funds advised by Patient Square Capital, a dedicated health care investment firm.

 

Under the terms of the transaction agreement, at the effective time of the transaction, each share of the Company’s Class A common stock outstanding immediately prior to the effective time (subject to certain exceptions) will be canceled and automatically converted into the right to receive $3.00 in cash, without any interest thereon and subject to any applicable withholding taxes.

 

The transaction agreement provides certain termination rights for both the Company and Patient Square Capital, and further provides that upon termination of the transaction agreement under certain circumstances, the Company would be required to pay Patient Square Capital a termination fee of approximately $11.5 million.

The transaction is subject to the satisfaction or waiver of customary closing conditions, including the adoption and approval of the transaction agreement by SOC Telemed stockholders. A special meeting of the Company’s stockholders to consider and vote on a proposal to adopt and approve the transaction agreement is scheduled to be held on April 4, 2022.

 

The parties expect the transaction to close in the second quarter of 2022. If the transaction is consummated, SOC Telemed’s Class A common stock and public warrants will no longer be listed on any public market.

 

Legal Proceedings

 

Between February 28, 2022, and March 17, 2022, three purported stockholders of the Company filed complaints in federal courts against the Company and members of the Company’s Board of Directors in connection with the proposed transaction described above: Gamez v. SOC Telemed, Inc., et al., Case No. 1:22-cv-01661 (S.D.N.Y.) (filed February 28, 2022); Campbell v. SOC Telemed, Inc., et al., Case No. 1:22-cv-01333 (E.D.N.Y.) (filed March 10, 2022); and Danieli v. SOC Telemed, Inc., et al., Case No. 1:22-cv-00340 (D. Del.) (filed March 17, 2022). The complaints assert federal securities claims under Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 thereunder for alleged failures to disclose material information in the preliminary proxy statement or the definitive proxy statement filed by the Company with the SEC in connection with the proposed transaction described above, which allegedly rendered them false and misleading. Specifically, the complaints allege, among other things, that the preliminary proxy statement or the definitive proxy statement failed to disclose material information regarding the sales process conducted by the Company, the Company’s financial projections and the financial analyses by the Company’s financial advisor, William Blair & Company, L.L.C. (“William Blair”). The Campbell complaint also alleges that the definitive proxy statement failed to disclose potential conflicts of interest involving William Blair. The complaints seek, among other things, an order enjoining the proposed transaction; rescinding the proposed transaction if it closes and setting it aside or awarding damages; directing the Board of Directors to disseminate a proxy statement that discloses certain information requested by the plaintiffs; awarding costs, including attorneys’ and experts’ fees; and awarding such other relief as the respective court deems proper. The Company has also received five demand letters from purported stockholders of the Company challenging the proposed transaction and alleging similar insufficiencies in the disclosures in the definitive proxy statement. The defendants believe the complaints are without merit. The Company cannot predict the outcome of or estimate the loss or range of loss from these matters.