S-4/A 1 d149785ds4a.htm FORM S-4/A Form S-4/A
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As filed with the Securities and Exchange Commission on October 25, 2021

No. 333-257982

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 3

to

FORM S-4

 

 

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

THIMBLE POINT ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   6770   85-4103092
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification No.)

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

195 Church Street, 15th Floor

New Haven, Connecticut 06510

(203) 680-8543

 

 

Elon S. Boms

Chief Executive Officer

Thimble Point Acquisition Corp.

195 Church Street, 15th Floor

New Haven, Connecticut 06510

(203) 680-8543

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Catherine M. Clarkin

Melissa Sawyer
Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
Tel: (212) 558-4000

 

David Broadwin

Stacie Aarestad

Foley Hoag LLP

155 Seaport Boulevard

Boston, Massachusetts 02210

Tel: (617) 832-1000

  Jocelyn Arel
Michael R. Patrone
Goodwin Procter LLP
100 Northern Avenue
Boston, Massachusetts 02210
Tel: (617) 523-1231

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

 

 

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

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 the 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      Smaller reporting company  
     Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-l(d) (Cross-Border Third-Party Tender Offer)  ☐

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of Each Class of
Securities to be Registered

 

Amount

to be

Registered (2)

 

Proposed

Maximum
Aggregate

Offering Price (3)

  Amount of
Registration Fee

Class A common stock (1)

  132,395,625   $1,306,744,819   $142,565.86

Total

  132,395,625   $1,306,744,819   $142,565.86

 

 

(1)

Based on the maximum number of shares of Class A common stock, par value $0.0001 per share, of the registrant that may be issued in connection with the business combination described herein, assuming that all vested “in-the-money” options to purchase common stock of Pear Therapeutics, Inc. and all warrants to purchase common stock of Pear Therapeutics, Inc. are exercised as of immediately prior to the closing of the business combination. Such number of shares includes (i) the 12,394,625 additional shares of Class A common stock issuable upon the achievement of certain earn-out targets and (ii) the 120,000,000 shares of Class A common stock issuable following the consummation of the business combination in connection with the exercise of options or warrants to purchase shares of Class A common stock (into which Pear Therapeutics, Inc. options or warrants were converted in connection with the business combination).

(2)

Pursuant to Rule 416(a) of Securities Act of 1933, as amended (the “Securities Act”), there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.

(3)

Previously paid.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the SEC, acting pursuant to Section 8(a), may determine.

 

 

 


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The information in this preliminary proxy statement/prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

PRELIMINARY PROXY STATEMENT/PROSPECTUS

SUBJECT TO COMPLETION, DATED OCTOBER 25, 2021

THIMBLE POINT ACQUISITION CORP.

195 Church Street, 15th Floor

New Haven, Connecticut 06510

 

 

Dear Thimble Point Acquisition Corp. stockholder:

On June 21, 2021, Thimble Point Acquisition Corp., a Delaware corporation (“THMA”), and Oz Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of THMA (“Merger Sub”), entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Business Combination Agreement”) with Pear Therapeutics, Inc., a Delaware corporation (“Pear”). If, among other conditions, (i) the Business Combination Agreement is adopted and the transactions contemplated thereby, including the Merger (as defined herein), are approved by THMA’s and Pear’s stockholders, (ii) the Business Combination Agreement and the transactions contemplated thereby, including the issuance of THMA Class A common stock, par value $0.0001 per share (“THMA Class A Common Shares”), to be issued as the merger consideration, pursuant to the Subscription Agreements (as defined herein), and pursuant to the conversion of THMA’s Class B common stock, par value $0.0001 per share (the “THMA Class B Common Shares”), are approved by THMA’s stockholders, and (iii) the Merger is subsequently consummated, Merger Sub will merge with and into Pear, with Pear surviving the merger as a wholly-owned subsidiary of THMA (the “Merger” or “Business Combination”).

In connection with the Business Combination, (i) holders of Pear Common Shares, Pear Preferred Shares and Pear Vested In-the-Money Options (each as defined below) will receive aggregate upfront consideration of $1,200,000,000, payable in an aggregate of 120,000,000 THMA Class A Common Shares, at a price of $10.00 per share, and (ii) holders of Pear Common Shares and Pear Preferred Shares will receive the contingent right to receive up to 12,394,625 additional THMA Class A Common Shares (the “Earn Out Shares”) upon the achievement of certain earn-out targets.

At the Effective Time:

 

  (i)

Each share of Pear’s common stock, par value $0.0001 per share (each, a “Pear Common Share”), issued and outstanding as of immediately prior to the Effective Time (excluding shares owned by Pear as treasury stock or dissenting shares) will be cancelled and converted into (x) the right to receive the Per Share Upfront Consideration and (y) the contingent right to receive Earn Out Shares as set forth in a Consideration Schedule (as defined below) (with respect to each Pear Common Share, together, the “Per Share Consideration” and with respect to all Pear Common Shares and Pear Preferred Shares, in the aggregate, the “Merger Consideration”). The “Per Share Upfront Consideration” is equal to such number of THMA Class A Common Shares equal to (i) $1,200,000,000 divided by $10.00 divided by (ii) the total number of Pear Common Shares outstanding immediately prior to the Effective Time, expressed on an as-exercised and as-converted to Pear Common Share basis (including any Pear Common Shares underlying Pear Vested In-the-Money Options or Pear Preferred Shares).

 

  (ii)

Each share of Pear’s preferred stock, par value $0.0001 per share (each, a “Pear Preferred Share”), issued and outstanding as of immediately prior to the Effective Time will be cancelled and converted into the right to receive Per Share Consideration in respect of such number of Pear Common Shares as set forth on a Consideration Schedule.

 

  (iii)

Each option to purchase Pear Common Shares that is unexercised and outstanding as of immediately prior to the Effective Time and that has a per share exercise price less than the Per Share Upfront Consideration multiplied by $10.00 (each, a “Pear In-the-Money Option”) will be cancelled in exchange for an option to purchase a number of THMA Class A Common Shares (the “Rollover Options”) as set forth on the Consideration Schedule at an exercise price as set forth on such Consideration Schedule.

 

  (iv)

Each warrant to purchase Pear Common Shares (each, a “Pear Warrant”) outstanding as of immediately prior to the Effective Time will be converted into a warrant to acquire a number of THMA Class A Common Shares in an amount and at an exercise price and subject to such terms and conditions, in each case, as set forth on the Consideration Schedule. The holders of all Pear Warrants that are


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  currently outstanding have entered into agreements that require the automatic exercise of such Pear Warrants such that no Pear Warrants will be outstanding as of immediately prior to the Effective Time and as such no Pear Warrants will be converted into warrants to acquire THMA Class A Common Shares. Subject to certain exceptions, such terms and conditions will be the same terms and conditions as were applicable to the Pear Warrant immediately prior to the Effective Time.

The number of THMA Class A Common Shares to be issued to Pear stockholders in respect of their Pear Common Shares and their Pear Preferred Shares, together with the number of THMA Class A Common Shares that will underlie the Rollover Options issued to holders of Pear-In-the-Money Options that are vested as of immediately prior to the Effective Time (the “Pear Vested In-the-Money Options”), will be equal to 120,000,000. See the section entitled “The Business Combination” on page 249 of the attached proxy statement/prospectus for further information on the consideration being paid to the Pear equityholders in the Merger. Following the consummation of the Business Combination, when permitted by SEC rules, the Post-Combination Company intends to file a registration statement on Form S-8 with the SEC providing for the registration of (i) the Post-Combination Common Stock that will underlie the Rollover Options issued to holders of Pear-In-the-Money Options that are unvested as of immediately prior to the Effective Time and (ii) that are reserved for issuance under the 2021 Plan or 2021 ESPP.

Assuming that (a) no holders of THMA Class A Common Shares elect to have their Public Shares redeemed, (b) there are no other issuances of equity interests of THMA, (c) no Earn Out Shares are issued and (d) all Pear Vested In-the-Money Options are exercised as of immediately prior to the Effective Time, (i) the total number of THMA Class A Common Shares to be issued to Pear equityholders at the Effective Time is approximately 120,000,000, (ii) Pear equityholders as of immediately prior to the Effective Time will hold, in the aggregate, approximately 72.4% of the issued and outstanding THMA Class A Common Shares immediately following the Effective Time and (iii) THMA stockholders as of immediately prior to the Effective Time will hold, in the aggregate, approximately 20% of the issued and outstanding THMA Class A Common Shares immediately following the Effective Time.

THMA units, THMA Class A Common Shares and THMA public warrants are publicly traded on the Nasdaq Stock Market (“Nasdaq”). We intend to apply to list the THMA Class A Common Shares and THMA public warrants on Nasdaq under the symbols “PEAR” and “PEAR.W,” respectively, upon the closing of the Merger (the “Closing”). THMA will not have units traded following the Closing. THMA intends to change its name to “Pear Holdings Corp.” at the Effective Time.

In connection with the execution of the Business Combination Agreement, THMA entered into subscription agreements (collectively, the “Subscription Agreements”) with certain parties subscribing for THMA Class A Common Shares (the “Subscribers”), pursuant to which the Subscribers have agreed to purchase, and THMA has agreed to sell to the Subscribers, an aggregate of 10,280,000 THMA Class A Common Shares, for a purchase price of $10.00 per share and an aggregate purchase price of $102,800,000 (such purchases and sales, the “PIPE Transaction”). In connection with the execution of the Business Combination Agreement, THMA entered into an amendment to its forward purchase agreement dated as of February 1, 2021 (as amended, the “Amended Forward Purchase Agreement”) with KLP SPAC 1 LLC (the “Anchor Investor”), pursuant to which the Anchor Investor has agreed to purchase, and THMA has agreed to sell to the Anchor Investor, such number of THMA Class A Common Shares equal to the sum of (x) 2,300,000 and (y) such additional THMA Class A Common Shares as the Anchor Investor may elect to purchase up to the lesser of (A) the number of Public Shares redeemed by THMA’s Public Stockholders and (B) 2,700,000, in each case, for a purchase price of $10.00 per share (such purchase and sale, the “Forward Purchase”). The obligations to consummate the transactions contemplated by the Subscription Agreements and the transactions contemplated by the Amended Forward Purchase Agreement are each conditioned upon customary closing conditions, including the consummation of the transactions contemplated by the Business Combination Agreement, including the Merger. See “Other Agreements—Subscription Agreements” and “—Amended Forward Purchase Agreement.

THMA will hold a special meeting of stockholders in lieu of the 2021 annual meeting of its stockholders (the “Special Meeting”) to consider matters relating to the proposed Merger. THMA and Pear cannot complete the Merger unless, among other things, (i) THMA’s stockholders consent to the approval of the Business Combination Agreement and the transactions contemplated thereby, including the issuance of THMA Class A Common Shares to be issued as the Merger Consideration, pursuant to the Subscription Agreements, the Amended Forward Purchase Agreement and conversion of THMA Class B Common Shares, (ii) holders of THMA Class A Common Shares consent, separately as a single class, to the amendment of THMA’s amended and restated certificate of


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incorporation, and (iii) Pear’s stockholders consent to adoption and approval of the Business Combination Agreement and the transactions contemplated thereby. THMA is sending you this proxy statement/prospectus to ask you to vote in favor of these and the other matters described in this proxy statement/prospectus.

The Special Meeting will be held at 9:00 a.m. prevailing Eastern Time, on November 23, 2021, in virtual format at https://www.cstproxy.com/thimblepoint/2021.

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF THMA COMMON SHARES YOU OWN. To ensure your representation at the Special Meeting, please complete and return the enclosed proxy card or submit your proxy by following the instructions contained in this proxy statement/prospectus and on your proxy card. Please submit your proxy promptly whether or not you expect to attend the Special Meeting. Submitting a proxy now will NOT prevent you from being able to vote in person (which would include presence at a virtual meeting) at the meeting. If you hold your shares in “street name”, you should instruct your broker, bank or other nominee how to vote in accordance with the voting instruction form you receive from your broker, bank or other nominee.

The THMA board of directors has unanimously approved the Business Combination Agreement and the transactions contemplated thereby and recommends that THMA stockholders vote “FOR” each of the proposals in this proxy statement/prospectus.

This proxy statement/prospectus provides you with detailed information about the proposed Merger. It also contains or references information about THMA and Pear and certain related matters. You are encouraged to read this proxy statement/prospectus carefully. In particular, you should read the “Risk Factors” section beginning on page 29 for a discussion of the material risks you should consider in evaluating the proposed Merger and how it may affect you.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES BE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO THMA’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER AND PROVIDE YOUR LEGAL NAME, PHONE NUMBER AND ADDRESS IN YOUR WRITTEN DEMAND. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

If you have any questions regarding the accompanying proxy statement/prospectus, you may contact Morrow Sodali LLC, THMA’s proxy solicitor, toll free at (800) 662-5200 (banks and brokers call collect at (203) 658-9400).

Sincerely,

Elon Boms

Thimble Point Acquisition Corp.

Chief Executive Officer and Chairman of the Board of Directors

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the Merger, the issuance of THMA Class A Common Shares in connection with the Merger or the other transactions described in this proxy statement/prospectus or passed upon the adequacy or accuracy of the disclosure in this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated                     , 2021, and is first being mailed to stockholders of THMA on or about October 29, 2021.


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THIMBLE POINT ACQUISITION CORP.

195 Church Street, 15th Floor

New Haven, Connecticut 06510

NOTICE OF

SPECIAL MEETING IN LIEU OF THE 2021 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON NOVEMBER 23, 2021

TO THE STOCKHOLDERS OF THMA:

NOTICE IS HEREBY GIVEN that a special meeting in lieu of the 2021 annual meeting of stockholders of Thimble Point Acquisition Corp., a Delaware corporation, will be held at 9:00 a.m. prevailing Eastern Time, on November 23, 2021, in virtual format at https://www.cstproxy.com/thimblepoint/2021 (the “Special Meeting”). You are cordially invited to attend the Special Meeting, during which THMA stockholders will be asked to consider and vote upon the following proposals (the “Proposals” and each a “Proposal”):

 

  1.

The Business Combination Proposal. To consider and vote upon a proposal to (a) approve and adopt the Business Combination Agreement, dated as of June 21, 2021 (as it may be amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Business Combination Agreement”), by and among THMA, Oz Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of THMA (“Merger Sub”), and Pear Therapeutics, Inc., a Delaware corporation (“Pear”), and (b) approve the transactions contemplated thereby, including the merger of Merger Sub with and into Pear, with Pear surviving the merger as a wholly-owned subsidiary of THMA (the “Merger” and such proposal, the “Business Combination Proposal”). A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A.

 

  2.

The Charter Approval Proposal. To consider and vote upon a proposal to adopt the Second Amended and Restated Certificate of Incorporation of THMA (the “Proposed Charter”) in the form attached hereto as Annex B (the “Charter Approval Proposal”).

 

  3.

The Governance Proposals. To consider and act upon, on a non-binding advisory basis, the material differences between the Proposed Charter and the Amended and Restated Certificate of Incorporation of THMA (the “Current Charter”) as separate proposals in accordance with United States Securities and Exchange Commission (the “SEC”) requirements (collectively, the “Governance Proposal”).

 

  4.

The Director Election Proposal. To consider and vote upon a proposal to elect seven directors to serve on the board of directors of the Post-Combination Company (the “Post-Combination Company Board”) until the 2022 annual meeting of stockholders, in the case of Class I directors, the 2023 annual meeting of stockholders, in the case of Class II directors, and the 2024 annual meeting of stockholders, in the case of Class III directors, and, in each case, until their respective successors are duly elected and qualified (the “Director Election Proposal”).

 

  5.

The Nasdaq Proposal. To consider and vote upon a proposal to approve, for purposes of complying with applicable Nasdaq listing rules: (i) the issuance of THMA Class A Common Shares to Pear equityholders pursuant to the Business Combination Agreement; (ii) the issuance of THMA Class A Common Shares pursuant to the Subscription Agreements; (iii) the issuance of THMA Class A Common Shares pursuant to the Amended Forward Purchase Agreement; and (iv) the issuance of THMA Class A Common Shares pursuant to the conversion of THMA Class B Common Shares (the “Nasdaq Proposal”).

 

  6.

The Incentive Plan Proposal. To consider and vote upon a proposal to approve and adopt the Pear Holdings Corp. 2021 Stock Option and Incentive Plan (the “2021 Plan” and such proposal, the “Incentive Plan Proposal”).

 

  7.

The Employee Stock Purchase Plan Proposal. To consider and vote upon a proposal to approve and adopt the Pear Holdings Corp. 2021 Employee Stock Purchase Plan (the “2021 ESPP” and such proposal, the “Employee Stock Purchase Plan Proposal”).


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  8.

The Adjournment Proposal. To consider and vote upon a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Approval Proposal, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal or the Employee Stock Purchase Plan Proposal (the “Adjournment Proposal”).

These items of business are described in the attached proxy statement/prospectus, which we encourage you to read in its entirety before voting. Only holders of record of THMA Common Shares at the close of business on October 18, 2021 (the “THMA Record Date”) are entitled to notice of the Special Meeting and to vote and have their votes counted at the Special Meeting and any adjournments or postponements of the Special Meeting.

Pursuant to THMA’s Current Charter, THMA will provide holders of its THMA Class A Common Shares (“Public Shares”) with the opportunity to redeem their Public Shares for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account, which holds the proceeds of THMA’s initial public offering, as of two business days prior to the consummation of the transactions contemplated by the Business Combination Proposal (including interest earned on the funds held in the trust account and not previously released to THMA to pay its taxes). For illustrative purposes, based on funds in the trust account of approximately $276,023,886 on October 18, 2021, the THMA Record Date, the estimated per share redemption price would have been approximately $10.00, excluding additional interest earned on the funds held in the trust account and not previously released to THMA to pay taxes. Public Stockholders (as defined herein) may elect to redeem their shares even if they vote for the Business Combination Proposal. A holder of Public Shares, together with any affiliate of such holder or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the Public Shares without the consent of THMA. Accordingly, all Public Shares in excess of 15% held by a Public Stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed for cash without the consent of THMA. LJ10 LLC, a Delaware limited liability company (the “Sponsor”), and THMA’s directors, officers and members of its team of advisors (the “Advisors”) have agreed to waive their redemption rights in connection with the consummation of the Business Combination with respect to any THMA Common Shares they may hold. Currently, the Initial Stockholders (as defined herein) own 20% of THMA’s common stock, consisting of the Founder Shares (as defined herein). Founder Shares will be excluded from the pro rata calculation used to determine the per-share redemption price. The Sponsor and THMA’s directors, Advisors and officers have agreed to vote any THMA Common Shares owned by them in favor of each of the proposals presented at the Special Meeting.

After careful consideration, THMA’s board of directors (the “THMA Board”) has determined that the Merger Proposal, the Charter Approval Proposal, the Governance Proposals, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal are fair to and in the best interests of THMA and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” the Business Combination Proposal, “FOR” the Charter Approval Proposal, “FOR” the Governance Proposals, “FOR” the Director Election Proposal, “FOR” the Nasdaq Proposal, “FOR” the Incentive Plan Proposal, “FOR” the Employee Stock Purchase Plan Proposal and “FOR” the Adjournment Proposal, if presented.

The approval of each of the Business Combination Proposal, the Governance Proposals, the Nasdaq Proposal, the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal, if presented, requires the affirmative vote (in person or by proxy) of the holders of a majority of the THMA Class A Common Shares and THMA Class B Common Shares entitled to vote and actually cast thereon at the Special Meeting, voting together as a single class. The approval of the Director Election Proposal requires the affirmative vote (in person or by proxy) of the holders of a plurality of the outstanding THMA Class A Common Shares and THMA Class B Common Shares entitled to vote and actually cast thereon at the Special Meeting, voting together as a single class.


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The approval of the Charter Approval Proposal requires the affirmative vote (in person or by proxy) of (i) the holders of a majority of the Founder Shares then outstanding, voting separately as a single class and (ii) the holders of a majority of the THMA Class A Common Shares and THMA Class B Common Shares then outstanding and entitled to vote thereon, voting together as a single class. The parties have also agreed to condition the Charter Approval Proposal on the affirmative vote (in person or by proxy) of the holders of a majority of the THMA Class A Common Shares then outstanding and entitled to vote thereon, voting separately as a single class.

Consummation of the Business Combination is conditioned on the approval of the Business Combination Proposal, the Charter Approval Proposal, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal (collectively, the “Required Proposals”) at the Special Meeting, subject to the terms of the Business Combination Agreement. The Merger is not conditioned on any of the Governance Proposals or the Adjournment Proposal. If the Business Combination Proposal is not approved, the other proposals (except the Adjournment Proposal) will not be presented to the stockholders for a vote. The proxy statement/prospectus accompanying this notice explains the Business Combination Agreement and the transactions contemplated thereby, as well as the Proposals to be considered at the Special Meeting. Please review the proxy statement/prospectus carefully.

All THMA stockholders are cordially invited to attend the Special Meeting in virtual format at https://www.cstproxy.com/thimblepoint/2021. THMA stockholders may attend, vote and examine the list of THMA stockholders entitled to vote at the Special Meeting by visiting and entering the control number found on their proxy card, voting instruction form or notice included in their proxy materials. The Special Meeting will be held in virtual meeting format only. You will not be able to attend the Special Meeting physically. To ensure your representation at the Special Meeting, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the Special Meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

If you have any questions or need assistance voting your shares, please contact Morrow Sodali LLC, our proxy solicitor, toll free at (800) 662-5200 (banks and brokers call collect at (203) 658-9400).

 

By Order of the Board of Directors

 

Elon Boms

Thimble Point Acquisition Corp.

Chief Executive Officer and Chairman of the Board of Directors

October 25, 2021

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS. TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST ELECT TO HAVE THMA REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO THMA’s TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT AND WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANKS OR BROKERS TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE “THMA’S SPECIAL MEETING OF STOCKHOLDERS—REDEMPTION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.


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TABLE OF CONTENTS

 

ADDITIONAL INFORMATION

     iii  

MARKET AND INDUSTRY DATA

     iv  

TRADEMARKS

     iv  

SELECTED DEFINITIONS AND BASIS OF PRESENTATION

     v  

QUESTIONS AND ANSWERS

     viii  

SUMMARY

     1  

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     21  

UNAUDITED HISTORICAL COMPARATIVE AND PRO FORMA COMBINED PER SHARE DATA OF THMA AND PEAR

     23  

MARKET PRICE AND DIVIDEND INFORMATION

     25  

FORWARD-LOOKING STATEMENTS

     26  

RISK FACTORS

     29  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     79  

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     87  

UNAUDITED HISTORICAL COMPARATIVE AND PRO FORMA COMPARATIVE PER SHARE DATA OF THMA AND PEAR

     93  

THMA’S SPECIAL MEETING OF STOCKHOLDERS

     94  

PROPOSAL NO. 1—THE BUSINESS COMBINATION PROPOSAL

     104  

PROPOSAL NO. 2—THE CHARTER APPROVAL PROPOSAL

     105  

PROPOSAL NO. 3—THE GOVERNANCE PROPOSAL

     109  

PROPOSAL NO. 4—THE DIRECTOR ELECTION PROPOSAL

     111  

PROPOSAL NO. 5—THE NASDAQ PROPOSAL

     115  

PROPOSAL NO. 6—THE 2021 STOCK OPTION AND INCENTIVE PLAN PROPOSAL

     117  

PROPOSAL NO. 7—THE 2021 EMPLOYEE STOCK PURCHASE PLAN PROPOSAL

     122  

PROPOSAL NO. 8—THE ADJOURNMENT PROPOSAL

     126  

INFORMATION ABOUT THMA

     127  

MANAGEMENT OF THMA

     135  

SELECTED HISTORICAL FINANCIAL INFORMATION OF THMA

     143  

THMA MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     145  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF THMA AND THE POST-COMBINATION COMPANY

     153  

INFORMATION ABOUT PEAR

     157  

MANAGEMENT OF PEAR

     205  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF PEAR

     210  

PEAR’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     212  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF PEAR

     233  

MANAGEMENT OF THE POST-COMBINATION COMPANY FOLLOWING THE BUSINESS COMBINATION

     237  

EXECUTIVE COMPENSATION OF PEAR

     242  

THE BUSINESS COMBINATION

     249  

REGULATORY APPROVALS REQUIRED FOR THE BUSINESS COMBINATION

     273  

ANTICIPATED ACCOUNTING TREATMENT

     274  

PUBLIC TRADING MARKETS

     275  

THE BUSINESS COMBINATION AGREEMENT

     276  

OTHER AGREEMENTS

     294  

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

     298  

 

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COMPARISON OF STOCKHOLDERS’ RIGHTS

     303  

DESCRIPTION OF CAPITAL STOCK OF THE POST-COMBINATION COMPANY

     320  

SECURITIES ACT RESTRICTIONS ON RESALE OF THMA CLASS A COMMON SHARES

     325  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     326  

EXPERTS

     333  

VALIDITY OF SECURITIES

     334  

OTHER MATTERS

     335  

APPRAISAL RIGHTS

     336  

DELIVERY OF DOCUMENTS TO STOCKHOLDERS

     337  

TRANSFER AGENT AND REGISTRAR

     338  

WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE

     339  

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO FINANCIAL STATEMENTS

     F-1  

ANNEX A—BUSINESS COMBINATION AGREEMENT

     A-1  

ANNEX B—FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF PEAR HOLDINGS CORP.

     B-1  

ANNEX C—FORM OF AMENDED AND RESTATED BYLAWS OF PEAR HOLDINGS CORP.

     C-1  

ANNEX D—FORM OF AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

     D-1  

ANNEX E—SPONSOR SUPPORT AGREEMENT

     E-1  

ANNEX F—FORWARD PURCHASE AGREEMENT

     F-1  

ANNEX G—FIRST AMENDMENT TO FORWARD PURCHASE AGREEMENT

     G-1  

ANNEX H—FORM OF COMPANY STOCKHOLDER SUPPORT AGREEMENT

     H-1  

ANNEX I—FORM OF COMPANY STOCKHOLDER LOCK-UP AGREEMENT

     I-1  

ANNEX J—FORM OF SUBSCRIPTION AGREEMENT

     J-1  

ANNEX K—FORM OF PEAR HOLDINGS CORP. 2021 STOCK OPTION AND INCENTIVE PLAN

     K-1  

ANNEX L—FORM OF PEAR HOLDINGS CORP. 2021 EMPLOYEE STOCK PURCHASE PLAN

     L-1  

PART II INFORMATION NOT REQUIRED IN PROSPECTUS

     II-1  

 

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ADDITIONAL INFORMATION

This document, which forms part of a Registration Statement on Form S-4 filed with the SEC by THMA (File No. 333-257982) (the “Registration Statement”), constitutes a prospectus of THMA under Section 5 of the Securities Act, with respect to the THMA Class A Common Shares to be issued to Pear equityholders if the Business Combination described below is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the Exchange Act with respect to the Special Meeting, at which THMA stockholders will be asked to consider and vote upon a proposal to approve the Business Combination by the approval and adoption of the Business Combination Agreement, among other matters.

You should rely only on the information contained or incorporated by reference into this proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this proxy statement/prospectus. This proxy statement/prospectus is dated as of the date set forth on the cover hereof. You should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than that date. You should not assume that the information incorporated by reference into this proxy statement/prospectus is accurate as of any date other than the date of such incorporated document. Neither the mailing of this proxy statement/prospectus to THMA stockholders nor the issuance of THMA Class A Common Shares in connection with the Business Combination will create any implication to the contrary.

All information contained in this proxy statement/prospectus relating to THMA has been supplied by THMA, and all such information relating to Pear has been supplied by Pear. Information provided by one another does not constitute any representation, estimate or projection of the other.

This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

THMA files reports and other information with the SEC as required by the Exchange Act. You may access information on THMA at the SEC website containing reports and other information at: http://www.sec.gov.

If you would like additional copies of this proxy statement/prospectus or if you have questions about the Business Combination, you should contact via phone or in writing:

Morrow Sodali LLC

470 West Avenue

Stamford CT 06902

Individuals call toll-free (800) 662-5200

Banks and brokers call (203) 658-9400

Email: THMA.info@investor.morrowsodali.com

To obtain timely delivery of the documents, you must request them no later than five business days before the date of the Special Meeting or no later than November 16, 2021.

 

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MARKET AND INDUSTRY DATA

Certain information contained in this document relates to or is based on studies, publications, surveys and other data obtained from third-party sources and THMA’s and Pear’s internal estimates and research. While we believe these third-party sources to be reliable as of the date of this proxy statement/prospectus, we have not independently verified the market and industry data contained in this proxy statement/prospectus or the underlying assumptions relied on therein. Finally, while we believe our own internal research is reliable, such research has not been verified by any independent source. Notwithstanding the foregoing, we are liable for such information provided in this proxy statement/prospectus.

TRADEMARKS

This document contains references to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this proxy statement/prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

 

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SELECTED DEFINITIONS AND BASIS OF PRESENTATION

As used in this proxy statement/prospectus, unless otherwise noted or the context otherwise requires, references to the following capitalized terms have the meanings set forth below:

Amended Forward Purchase Agreement” means the Forward Purchase Agreement, as amended from time to time, including by the Amendment to Forward Purchase Agreement.

Amended Forward Purchase Units” means the units to be issued to the Anchor Investor pursuant to the Amended Forward Purchase Agreement, consisting solely of Forward Purchase Shares.

Amendment to Forward Purchase Agreement” means the Amendment to Forward Purchase Agreement, dated as of June 21, 2021, by and between THMA and the Anchor Investor.

Anchor Investor” means KLP SPAC 1 LLC, a Delaware limited liability company affiliated with the Pritzker Vlock Family Office, with which THMA has entered into the Amended Forward Purchase Agreement.

Ancillary Agreements” means the Registration Rights Agreement, the Sponsor Agreement, the Subscription Agreements, the Pear Stockholder Support Agreements, the Lock-Up Agreements, the letter of transmittal to be delivered to Pear stockholders in connection with the Merger and the other agreements, documents, instruments contemplated by the Business Combination Agreement executed or to be executed in connection with the transactions contemplated thereby.

Closing Date” means the date on which the Closing occurs.

Code” means the Internal Revenue Code of 1986, as amended.

Continental” means Continental Stock Transfer & Trust Company, as THMA’s transfer agent.

Current Charter” means the Amended and Restated Certificate of Incorporation of THMA.

DGCL” means the Delaware General Corporation Law, as may be amended from time to time.

Exchange Act” means the Securities Exchange Act of 1934, as amended.

Forward Purchase Agreement” means the Forward Purchase Agreement, dated as of February 1, 2021, by and between THMA and the Anchor Investor.

Forward Purchase Shares” means the THMA Class A Common Shares to be sold to the Anchor Investor pursuant to the Forward Purchase Agreement.

Forward Purchase Warrants” means the warrants to purchase THMA Class A Common Shares to be sold to the Anchor Investor pursuant to the Forward Purchase Agreement (for the avoidance of doubt, prior to the execution of the Amendment to Forward Purchase Agreement).

Founder Shares” means THMA Class B Common Shares and THMA Class A Common Shares issued upon the automatic conversion thereof at the time of THMA’s initial business combination as provided herein.

GAAP” means the generally accepted accounting principles in the United States, as applied on a consistent basis.

HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

 

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Initial Public Offering” means the initial public offering of THMA, which closed on February 4, 2021.

Initial Stockholders” means holders of the THMA’s Founder Shares prior to the Business Combination.

Investment Company Act” means the Investment Company Act of 1940, as amended.

Merger Sub” means Oz Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of THMA.

Original Forward Purchase Units” means the units to be issued to the Anchor Investor pursuant to the Forward Purchase Agreement (for the avoidance of doubt, prior to the execution of the Amendment to Forward Purchase Agreement), consisting of one Forward Purchase Share and one-third of one Forward Purchase Warrant.

Pear” means Pear Therapeutics, Inc., a Delaware corporation.

Pear Common Shares” means the Common Stock, par value $0.0001 per share, of Pear.

Pear Preferred Shares” means, collectively, the Pear Series A Preferred Shares, Pear Series B Preferred Shares, Pear Series C Preferred Shares, Pear Series D-1 Preferred Shares and Pear Series D-2 Preferred Shares.

Pear Series A Preferred Shares” means the Series A Preferred Stock, par value $0.0001 per share, of Pear.

Pear Series B Preferred Shares” means the Series B Preferred Stock, par value $0.0001 per share, of Pear.

Pear Series C Preferred Shares” means the Series C Preferred Stock, par value $0.0001 per share, of Pear.

Pear Series D-1 Preferred Shares” means the Series D-1 Preferred Stock, par value $0.0001 per share, of Pear.

Pear Series D-2 Preferred Shares” means the Series D-2 Preferred Stock, par value $0.0001 per share, of Pear.

Pear Shares” means, collectively, the Pear Common Shares and the Pear Preferred Shares.

Post-Combination Company” means THMA following the consummation of the Business Combination, which will be renamed “Pear Holdings Corp.” at the Effective Time.

Pritzker Vlock Family Office” means the PV Family Office LLC, a Delaware limited liability company affiliated with the Anchor Investor.

Private Placement Warrants” means the warrants issued to the Sponsor in a private placement simultaneously with the closing of the Initial Public Offering.

Public Shares” means THMA Class A Common Shares sold as part of the units in the Initial Public Offering (whether they were purchased in the Initial Public Offering or thereafter in the open market).

Public Stockholders” means the holders of Public Shares, including the Sponsor and THMA’s management team to the extent the Sponsor and/or members of such management team purchase Public Shares; provided that the Sponsor’s and each member of such management team’s status as a “Public Stockholder” will only exist with respect to such Public Shares.

Public Warrants” means the warrants sold as part of the units in the Initial Public Offering (whether they were purchased in the Initial Public Offering or thereafter in the open market).

 

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SEC” means the U.S. Securities and Exchange Commission.

Securities Act” means the Securities Act of 1933, as amended.

THMA” means Thimble Point Acquisition Corp., a Delaware corporation.

THMA Class A Common Shares” means the Class A common stock, par value $0.0001 per share, of THMA.

THMA Class B Common Shares” means the Class B common stock, par value $0.0001 per share, of THMA.

Trust Account” means the trust account established by THMA for the benefit of its stockholders at Continental Stock Transfer & Trust Company.

Unless otherwise specified, the voting and economic interests of the Post-Combination Company’s stockholders set forth in this proxy statement/prospectus assume the following:

 

   

No Public Shares are redeemed.

 

   

There are no other issuances of equity interests of THMA not described in this proxy statement/prospectus.

 

   

All Pear Vested In-the-Money Options are exercised as of immediately prior to the Effective Time.

 

   

10,280,000 THMA Class A Common Shares are issued to the Subscribers in the PIPE Transaction.

 

   

2,300,000 THMA Class A Common Shares are issued to the Anchor Investor in the Forward Purchase.

 

   

The current Pear equityholders will own 113,040,552 THMA Class A Common Shares on a fully diluted net exercise basis, representing approximately 71.2% of the total THMA Class A Common Shares outstanding.

 

   

None of THMA’s Initial Stockholders, Pear’s equityholders, the Subscribers or the Anchor Investor purchase THMA Class A Common Shares in the open market.

Further, unless otherwise specified, the voting and economic interests of the Post-Combination Company’s stockholders set forth in this proxy statement/prospectus do not take into account the (i) Earn Out Shares or (ii) the Private Placement Warrants or Public Warrants, which will remain outstanding following the Business Combination and may be exercised at a later date. The scenario described in this paragraph and above is referred to as the no redemption scenario.

Certain sections in this proxy statement/prospectus also refer to a maximum redemption scenario. Unless otherwise specified, that scenario assumes for illustrative purposes that all of the assumptions described above apply, except that 19,040,185 THMA Class A Common Shares are redeemed (representing the estimated maximum number of THMA Class A Common Shares that may be redeemed without resulting in the failure to satisfy the Minimum Cash Condition (as defined under “The Business Combination Agreement—Conditions to the Business Combination”)), resulting in an aggregate payment of approximately $190.4 million from the Trust Account. For more information, see “Unaudited Pro Forma Condensed Combined Financial Statements.”

 

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QUESTIONS AND ANSWERS

The questions and answers below highlight only selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the Business Combination, the Special Meeting in lieu of the 2021 annual meeting and the proposals to be presented at the Special Meeting. The following questions and answers do not include all the information that is important to THMA stockholders. You are urged to read carefully this entire proxy statement/prospectus, including the Annexes and the other documents referred to herein, to fully understand the Business Combination and the voting procedures for the Special Meeting.

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

 

Q:

WHAT IS THE BUSINESS COMBINATION?

 

A:

THMA, Merger Sub, a wholly-owned subsidiary of THMA, and Pear have entered into the Business Combination Agreement, pursuant to which Merger Sub will merge with and into Pear, with Pear surviving the Merger as a wholly-owned subsidiary of THMA. In connection with the Closing of the Merger, THMA will be renamed “Pear Holdings Corp.”

THMA will hold the Special Meeting to, among other things, obtain the approvals required for the Business Combination and the other transactions contemplated by the Business Combination Agreement, and you are receiving this proxy statement/prospectus in connection with such meeting. See “The Business Combination Agreement” beginning on page 276. In addition, a copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A. We urge you to read carefully this proxy statement/prospectus, including the Annexes and the other documents referred to herein, in their entirety.

YOUR VOTE IS IMPORTANT. YOU ARE ENCOURAGED TO SUBMIT YOUR PROXY AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS AND ITS ANNEXES AND CAREFULLY CONSIDERING EACH OF THE PROPOSALS BEING PRESENTED AT THE SPECIAL MEETING.

 

Q:

WHY AM I RECEIVING THIS DOCUMENT?

 

A:

THMA is sending this proxy statement/prospectus to its stockholders to help them decide how to vote their THMA Common Shares with respect to the matters to be considered at the Special Meeting. The Business Combination cannot be completed unless THMA’s stockholders approve the Business Combination Proposal, the Charter Approval Proposal, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal set forth in this proxy statement/prospectus. Information about the Special Meeting, the Business Combination and the other business to be considered by stockholders at the Special Meeting is contained in this proxy statement/prospectus. This document constitutes a proxy statement of THMA and a prospectus of THMA. It is a proxy statement because the THMA Board is soliciting proxies from THMA stockholders using this proxy statement/prospectus. It is a prospectus because THMA, in connection with the Business Combination, is offering THMA Class A Common Shares in exchange for the Pear Shares outstanding at the Effective Time. See “The Business Combination Agreement—Merger Consideration,” “Other Agreements—The Subscription Agreements” and “Other Agreements—The Amended Forward Purchase Agreement.”

 

Q:

WHAT WILL PEAR STOCKHOLDERS RECEIVE IN THE BUSINESS COMBINATION?

 

A.

In connection with the Business Combination, (i) holders of Pear Common Shares, Pear Preferred Shares and Pear Vested In-the-Money Options will receive aggregate upfront consideration of $1,200,000,000, payable in an aggregate of 120,000,000 THMA Class A Common Shares at a price of $10.00 per share and (ii) holders of Pear Common Shares and Pear Preferred Shares will receive the contingent right to receive up to 12,394,625 Earn Out Shares (see “—Earn Out Consideration”).

 

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The Earn Out Shares are payable in three equal tranches of 4,131,875 shares, each tied to a separate earn out milestone. The Earn Out Shares will be allocated pro rata to holders of Pear Common Shares and Pear Preferred Shares (on an as-converted basis) immediately prior to the consummation of the Business Combination as set forth in the Consideration Schedule (as defined below) which shall be delivered by Pear to THMA at least two Business Days prior to the Closing. Neither holders of Pear Vested In-the-Money Options nor holders of Pear Warrants immediately prior to the Effective Time will be eligible to receive Earn Out Shares. The following table sets forth an estimate of (x) the Per Share Upfront Consideration expected to be allocated to holders of Pear Common Shares, Pear Preferred Shares, Pear Vested In-the-Money Options and Pear Warrants and (y) the allocation of the Earn Out Shares among the holders of Pear Common Shares and Pear Preferred Shares, each based on the assumption that, since the execution of the Business Combination Agreement, Pear has not issued any additional equity (including pursuant to the exercise of options, warrants or other securities exchangeable or exercisable for equity of Pear).

 

     
      Per Share
Upfront
Consideration
   Earn Out
Shares

Holders of Pear Common Shares

   17,165,000    1,882,943

Holders of Pear Preferred Shares

   95,808,000    10,511,682

Holders of Pear Vested-In-the-Money Options

   5,797,000    None

Holders of Pear Warrants

   1,230,000    None

TOTAL

   120,000,000    12,394,625

Under the terms of the Business Combination Agreement, at the Effective Time:

 

  (i)

Each Pear Common Share issued and outstanding as of immediately prior to the Effective Time (excluding shares owned by Pear as treasury stock or dissenting shares) will be cancelled and converted into (x) the right to receive the Per Share Upfront Consideration and (y) the contingent right to receive Earn Out Shares as set forth in a Consideration Schedule. The “Per Share Upfront Consideration” is equal to such number of THMA Class A Common Shares equal to (i) $1,200,000,000 divided by $10.00 divided by (ii) the total number of Pear Common Shares outstanding immediately prior to the Effective Time, expressed on an as-exercised and as-converted to Pear Common Share basis (including any Pear Common Shares underlying Pear Vested In-the-Money Options or Pear Preferred Shares).

 

  (ii)

Each Pear Preferred Share issued and outstanding as of immediately prior to the Effective Time will be cancelled and converted into the right to receive Per Share Consideration in respect of such number of Pear Common Shares as set forth on a Consideration Schedule.

 

  (iii)

Each Pear In-the-Money Option will be cancelled in exchange for an option to purchase a number of THMA Class A Common Shares as set forth on the Consideration Schedule at an exercise price as set forth on such Consideration Schedule. All vested options to purchase Pear Common Shares are currently considered “in-the-money” with an average exercise price of $1.19, which is based on the implied value of each Pear Common Share from the exchange ratio used to compute the Per Share Upfront Consideration in the Merger. The exchange ratio applicable to such shares is defined as (i) $1.2 billion (the “Equity Value”), divided by (ii) $10.00, divided by (iii) the number of issued and outstanding shares of Pear common stock, on a fully diluted and as-converted basis.

 

  (iv)

Each Pear Warrant outstanding as of immediately prior to the Effective Time will be converted into a warrant to acquire a number of THMA Class A Common Shares in an amount and at an exercise price and subject to such terms and conditions, in each case, as set forth on the Consideration Schedule. The holders of all Pear Warrants that are currently outstanding have entered into agreements that require the automatic exercise of such Pear Warrants such that no Pear Warrants will be outstanding as of immediately prior to the Effective Time and as such no Pear Warrants will be converted into warrants to acquire THMA Class A Common Shares. Subject to certain exceptions, such terms and conditions will be the same terms and conditions as were applicable to the Pear Warrant immediately prior to the Effective Time.

 

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The number of THMA Class A Common Shares to be issued to Pear equityholders in respect of their Pear Common Shares and their Pear Preferred Shares, together with the number of THMA Class A Common Shares that will underlie the Rollover Options issued to holders of Pear Vested In-the-Money Options, will be equal to 120,000,000.

Following the consummation of the Business Combination, when permitted by SEC rules, the Post-Combination Company intends to file a registration statement on Form S-8 with the SEC providing for the registration of (i) the Post-Combination Common Stock that will underlie the Rollover Options issued to holders of Pear-In-the-Money Options that are unvested as of immediately prior to the Effective Time and (ii) that are reserved for issuance under the 2021 Plan or 2021 ESPP.

Assuming that (a) no holders of THMA Class A Common Shares elect to have their Public Shares redeemed, (b) there are no other issuances of equity interests of THMA, (c) no Earn Out Shares are issued and (d) all Pear Vested In-the-Money Options remain unexercised as of immediately prior to the Effective Time, (i) the total number of THMA Class A Common Shares to be issued to Pear equityholders at the Effective Time is approximately 113,040,552, (ii) Pear equityholders as of immediately prior to the Effective Time will hold, in the aggregate, approximately 71.2% of the issued and outstanding THMA Class A Common Shares immediately following the Effective Time and (iii) THMA stockholders as of immediately prior to the Effective Time will hold, in the aggregate, approximately 20% of the issued and outstanding THMA Class A Common Shares immediately following the Effective Time.

 

Q:

WHEN DO YOU EXPECT THE BUSINESS COMBINATION TO BE COMPLETED?

 

A:

It is currently anticipated that the Business Combination will be consummated promptly following the Special Meeting, which is set for November 23, 2021; however, such meeting could be adjourned, as described herein. Neither THMA nor Pear can assure you of when or if the Business Combination will be completed and it is possible that factors outside of the control of both companies could result in the Business Combination being completed at a different time or not at all. THMA must first obtain the approval of its stockholders for the Required Proposals set forth in this proxy statement/prospectus for their approval, Pear must first obtain the written consent of its stockholders for the Merger and THMA and Pear must also first obtain certain necessary regulatory approvals and satisfy other closing conditions. See “The Business Combination Agreement—Conditions to the Business Combination” beginning on page 289.

 

Q:

HOW WILL THMA BE MANAGED AND GOVERNED FOLLOWING THE BUSINESS COMBINATION?

 

A:

THMA does not currently have any management-level employees other than Elon S. Boms, our Chief Executive Officer and Chairman, Steven J. Benson, our Chief Operating Officer, and Joseph Iannotta, our Chief Financial Officer. Following the Closing, the Company’s executive officers are expected to be the current management team of Pear. See “Management of the Post-Combination Company Following the Business Combination” for more information.

THMA is, and after the Closing will continue to be, managed by its board of directors. Following the Closing, the size of our board of directors will be seven directors and will consist of Corey McCann, Nancy Schlichting, Andrew Schwab, Zack Lynch, Jorge Gomez, Kirthiga Reddy and Alison Bauerlein. Following the Closing, we expect that a majority of the directors will be independent under applicable Nasdaq listing rules. See the section entitled “Management of the Post-Combination Company Following the Business Combination” for more information.

 

Q:

WILL THMA OBTAIN NEW FINANCING IN CONNECTION WITH THE BUSINESS COMBINATION?

 

A:

In connection with the execution of the Business Combination Agreement, THMA entered into the Subscription Agreements with the Subscribers pursuant to which the Subscribers have agreed to purchase, and THMA has agreed to sell to the Subscribers, an aggregate of 10,280,000 THMA Class A Common Shares, for a purchase price of $10.00 per share and an aggregate purchase price of $102,800,000. In connection with the execution of the Business Combination Agreement, THMA entered into the

 

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  Amendment to Forward Purchase Agreement with the Anchor Investor. Pursuant to the Amended Forward Purchase Agreement, the Anchor Investor has agreed to purchase, and THMA has agreed to sell to the Anchor Investor, such number of THMA Class A Common Shares equal to the sum of (x) 2,300,000 and (y) such additional THMA Class A Common Shares as the Anchor Investor may elect to purchase up to the lesser of (A) the number of Public Shares redeemed by THMA’s Public Stockholders and (B) 2,700,000, for a purchase price of $10.00 per share.

The obligations to consummate the transactions contemplated by the Subscription Agreements and the transactions contemplated by the Amended Forward Purchase Agreement are each conditioned upon customary closing conditions, including the consummation of the transactions contemplated by the Business Combination Agreement, including the Merger. See “Other Agreements—Subscription Agreements” and “—Amended Forward Purchase Agreement.”

Assuming that no Public Shares are redeemed by THMA’s Public Stockholders, if the 12,580,000 THMA Class A Common Shares to be issued to the Subscribers and the Anchor Investor concurrently with the consummation of the Business Combination were currently outstanding, such shares would have an aggregate market value of $125,171,000 based upon the closing price of $9.95 per Public Share on Nasdaq on October 22, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus.

 

Q:

WHAT EQUITY STAKE WILL CURRENT THMA STOCKHOLDERS, THE INITIAL STOCKHOLDERS, THE SUBSCRIBERS AND THE PEAR STOCKHOLDERS HOLD IN THE POST-COMBINATION COMPANY FOLLOWING THE CLOSING?

 

A:

As of immediately following the Closing, (i) assuming no Public Shares are redeemed, (ii) assuming there are no other issuances of equity interests of THMA, (iii) without taking into account any THMA warrants that will remain outstanding immediately following the Closing and may be exercised at a later date or the Earn Out Shares and (iv) assuming that all Pear Vested In-the-Money Options remain unexercised as of immediately prior to the Effective Time, the expected beneficial ownership of the Post-Combination Company will be as follows:

 

   

Current THMA Public Stockholders will own 27,600,000 THMA Class A Common Shares, representing approximately 17.4% of the total THMA Class A Common Shares outstanding;

 

   

The Initial Stockholders will own 5,630,400 vested THMA Class A Common Shares (without taking into account an additional 1,269,600 THMA Class A Common Shares subject to vesting requirements pursuant to the Sponsor Agreement), representing approximately 3.5% of the total THMA Class A Common Shares outstanding;

 

   

The Subscribers will own 10,280,000 THMA Class A Common Shares, representing approximately 6.5% of the total THMA Class A Common Shares outstanding;

 

   

The Anchor Investor will own 2,300,000 THMA Class A Common Shares, representing approximately 1.4% of the total THMA Class A Common Shares outstanding; and

 

   

The current Pear equityholders will own 113,040,552 THMA Class A Common Shares on a fully diluted net exercise basis, representing approximately 71.2% of the total THMA Class A Common Shares outstanding.

As of immediately following the Closing, (i) 19,040,185 THMA Class A Common Shares are redeemed (representing the estimated maximum number of THMA Class A Common Shares that may be redeemed without resulting in the failure to satisfy the Minimum Cash Condition (as defined under “The Business Combination Agreement—Conditions to the Business Combination”)), (ii) assuming there are no other issuances of equity interests of THMA, (iii) without taking into account any THMA warrants that will remain outstanding immediately following the Closing and may be exercised at a later date or the Earn Out Shares and (iv) assuming that all Pear Vested In-the-Money Options remain unexercised as of immediately

 

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prior to the Effective Time, the expected beneficial ownership of the Post-Combination Company will be as follows:

 

   

Current THMA Public Stockholders will own 8,559,815 THMA Class A Common Shares, representing approximately 6.1% of the total THMA Class A Common Shares outstanding;

 

   

The Initial Stockholders will own 5,630,400 vested THMA Class A Common Shares (without taking into account an additional 1,269,600 THMA Class A Common Shares subject to vesting requirements pursuant to the Sponsor Agreement), representing approximately 4.0% of the total THMA Class A Common Shares outstanding;

 

   

The Subscribers will own 10,280,000 THMA Class A Common Shares, representing approximately 7.4% of the total THMA Class A Common Shares outstanding;

 

   

The Anchor Investor will own 2,300,000 THMA Class A Common Shares, representing approximately 1.6% of the total THMA Class A Common Shares outstanding; and

 

   

The current Pear equityholders will own 113,040,552 THMA Class A Common Shares on a fully diluted net exercise basis, representing approximately 80.9% of the total THMA Class A Common Shares outstanding.

For more information, see “Unaudited Pro Forma Condensed Combined Financial Information.”

 

Q:

FOLLOWING THE BUSINESS COMBINATION, WILL THMA’S SECURITIES CONTINUE TO TRADE ON A STOCK EXCHANGE?

 

A:

Yes. Upon the Closing, we intend to change our name from “Thimble Point Acquisition Corp.” to “Pear Holdings Corp.” and our THMA Class A Common Shares and Public Warrants are expected to trade under the symbols “PEAR” and “PEAR.W,” respectively, following the Closing.

QUESTIONS AND ANSWERS ABOUT THMA’S SPECIAL STOCKHOLDER MEETING

 

Q:

WHEN AND WHERE IS THE SPECIAL MEETING?

 

A:

The Special Meeting will be held at 9:00 a.m. prevailing Eastern Time, on November 23, 2021, in virtual format. THMA stockholders may attend, vote and examine the list of THMA stockholders entitled to vote at the Special Meeting by visiting https://www.cstproxy.com/thimblepoint/2021 and entering the control number found on their proxy card, voting instruction form or notice included in their proxy materials. The Special Meeting will be held in virtual meeting format only. You will not be able to attend the Special Meeting physically.

 

Q:

WHAT AM I BEING ASKED TO VOTE ON AND WHY IS THIS APPROVAL NECESSARY?

 

A:

The stockholders of THMA are being asked to vote on the following:

 

   

A proposal to adopt the Business Combination Agreement and the transactions contemplated thereby. See the section entitled “Proposal No. 1—The Business Combination Proposal.”

 

   

A proposal to adopt the Proposed Charter in the form attached hereto as Annex B. See the section entitled “Proposal No. 2—The Charter Approval Proposal.”

 

   

A proposal with respect to certain governance provisions in the Proposed Charter, which are being separately presented in accordance with SEC requirements and which will be voted upon on a non-binding advisory basis. See the section entitled “Proposal No. 3—The Governance Proposals.”

 

   

A proposal to elect seven directors to serve on the Post-Combination Company Board until the 2022 annual meeting of stockholders, in the case of Class I directors, the 2023 annual meeting of stockholders, in the case of Class II directors, and the 2024 annual meeting of stockholders, in the case

 

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of Class III directors, and, in each case, until their respective successors are duly elected and qualified. See the section entitled “Proposal No. 4—The Director Election Proposal.”

 

   

A proposal to approve, for purposes of complying with applicable Nasdaq listing rules: (i) the issuance of THMA Class A Common Shares to the Pear equityholders pursuant to the Business Combination Agreement; (ii) the issuance of THMA Class A Common Shares pursuant to the Subscription Agreements; (iii) the issuance of THMA Class A Common Shares pursuant to the Amended Forward Purchase Agreement; and (iv) the issuance of THMA Class A Common Shares pursuant to the conversion of THMA Class B Common Shares. See the section entitled “Proposal No. 5—The Nasdaq Proposal.”

 

   

A proposal to approve and adopt the 2021 Plan. See the section entitled “Proposal No. 6—The Incentive Plan Proposal.”

 

   

A proposal to approve and adopt the 2021 ESPP. See the section entitled “Proposal No. 7—The Employee Stock Purchase Plan Proposal.”

 

   

A proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Approval Proposal, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal or the Employee Stock Purchase Plan Proposal. See the section entitled “Proposal No. 8—The Adjournment Proposal.”

THMA will hold the Special Meeting to consider and vote upon these Proposals. This proxy statement/prospectus contains important information about the proposed Merger and the other matters to be acted upon at the Special Meeting.

Stockholders should read this proxy statement/prospectus carefully, including the Annexes and the other documents referred to herein.

Consummation of the Business Combination is conditioned on the approval of each of the Business Combination Proposal, the Charter Approval Proposal, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal, subject to the terms of the Business Combination Agreement. If the Business Combination Proposal is not approved, the other proposals, except the Adjournment Proposal, will not be presented to stockholders for a vote.

The vote of stockholders is important. Stockholders are encouraged to vote as soon as possible after carefully reviewing this proxy statement/prospectus.

 

Q:

WHO IS PEAR?

 

A:

Pear is a commercial-stage healthcare company pioneering a new class of software-based medicines, sometimes referred to as Prescription Digital Therapeutics (“PDTs”), which use software to treat diseases directly. Pear’s vision is to advance healthcare through the widespread use of PDTs, and to be the one-stop shop for PDTs offered both by Pear and by other organizations that may choose to host their products on our commercial platform. See “Information About Pear.”

 

Q:

WHY IS THMA PROPOSING THE BUSINESS COMBINATION?

 

A:

THMA was organized to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. On February 4, 2021, THMA completed its Initial Public Offering and, thereafter, THMA’s activity has been limited to the search for a target for its initial business combination.

Based on its due diligence investigations of Pear and the industry in which it operates, including the financial and other information provided by Pear in the course of their negotiations in connection with the

 

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Business Combination Agreement, the THMA Board believes that the Merger with Pear is advisable and in the best interests of THMA and its stockholders. See the section entitled “The Merger—Recommendation of the THMA Board of Directors and Reasons for the Merger.

 

Q:

DID THE THMA BOARD OBTAIN A THIRD-PARTY VALUATION OR FAIRNESS OPINION IN DETERMINING WHETHER OR NOT TO PROCEED WITH THE BUSINESS COMBINATION?

 

A:

The THMA Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Merger with Pear. The directors, Advisors and officers of THMA have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of THMA’s financial advisors and consultants, enabled them to make the necessary analyses and determinations regarding the Merger with Pear. In addition, THMA’s directors, Advisors and officers, together with THMA’s financial advisors and consultants, have substantial experience with mergers and acquisitions. Accordingly, investors will be relying solely on the judgment of the THMA Board in valuing Pear’s business.

 

Q:

WHY IS THMA PROVIDING STOCKHOLDERS WITH THE OPPORTUNITY TO VOTE ON THE BUSINESS COMBINATION?

 

A:

We are seeking approval of the Business Combination for purposes of complying with applicable Nasdaq listing rules requiring stockholder approval of issuances of more than 20% of a listed company’s issued and outstanding common stock. In addition, pursuant to the Current Charter, we must provide all Public Stockholders with the opportunity to redeem all or a portion of their Public Shares upon the consummation of an initial business combination (as defined in our Current Charter) either in conjunction with a tender offer or in conjunction with a stockholder vote to approve such initial business combination. If we submit the proposed initial business combination to the stockholders for their approval, our Current Charter requires us to conduct a redemption offer in conjunction with the proxy solicitation (and not in conjunction with a tender offer) pursuant to the applicable SEC proxy solicitation rules.

 

Q:

DO PEAR’S STOCKHOLDERS NEED TO APPROVE THE BUSINESS COMBINATION?

 

A:

Yes. Immediately following the execution of the Business Combination Agreement, certain equityholders of Pear representing the requisite votes necessary to approve the Merger (such stockholders, the “Supporting Pear Equityholders”) entered into company stockholder support agreements (the “Pear Stockholder Support Agreements”) with THMA and Pear, pursuant to which each Supporting Pear Equityholder agreed to, among other things, (a) vote all of its Pear Common Shares and Pear Preferred Shares (or any securities convertible into or exercisable or exchangeable for Pear Common Shares and Pear Preferred Shares) in favor of the approval and adoption of the Business Combination Agreement, the Ancillary Agreements to which Pear is or will be a party and the transactions contemplated thereby (including the Merger) and (b) be bound by certain other covenants and agreements related to the Merger. Also, immediately following the execution of the Business Combination Agreement, certain of the Supporting Pear Equityholders entered into stockholder lock-up agreements (the “Lock-Up Agreements”) with THMA, pursuant to which each Supporting Pear Equityholder agreed not to sell or otherwise dispose of any THMA Class A Common Shares or any other equity securities of THMA convertible into or exercisable or exchangeable for THMA Class A Common Shares held by any of them for a period of 180 days after the Closing Date other than pursuant to certain exceptions described therein. See “Other Agreements—Pear Stockholder Support Agreements” and “—Pear Lock-Up Agreements.”

The shares of Pear capital stock that are owned by the Supporting Pear Equityholders and subject to the Pear Stockholder Support Agreements represent (i) approximately 78.0% of the outstanding Pear Common Shares and Pear Preferred Shares (on an as-converted basis, together as a single class), (ii) approximately 80.6% of the outstanding Pear Preferred Shares (on an as-converted basis, together as a single class), (iii)

 

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approximately 93.3% of the outstanding Pear Series A Preferred Shares, (iv) approximately 82.4% of the outstanding Pear Series B Preferred Shares, (v) approximately 68.3% of the outstanding Pear Series C Preferred Shares, and (vi) approximately 73.4% of the outstanding Pear Series D-1 Preferred Shares and Pear Series D-2 Preferred Shares (on an as-converted basis, together as a single class), in each case, as of July 2, 2021. The execution and delivery of written consents by all of the Supporting Pear Equityholders will constitute the Pear stockholder approval at the time of such delivery. Additionally, the Supporting Pear Equityholders have agreed to waive any appraisal rights (including under Section 262 of the DGCL) with respect to the Merger and any rights to dissent with respect to the Merger.

 

Q:

DO I HAVE REDEMPTION RIGHTS?

 

A:

If you are a holder of Public Shares, you have the right to demand that THMA redeem such shares for a pro rata portion of the cash held in the Trust Account, which holds the proceeds of the Initial Public Offering, as of two business days prior to the consummation of the Merger (including interest earned on the funds held in the Trust Account and not previously released to THMA to pay taxes) upon the Closing (“redemption rights”).

Notwithstanding the foregoing, a holder of Public Shares, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking redemption with respect to more than 15% of the Public Shares without the consent of THMA. Accordingly, all Public Shares in excess of 15% held by a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed without the consent of THMA.

Under THMA’s Current Charter, the Merger may be consummated only if THMA has at least $5,000,001 of net tangible assets after payment of cash to all Public Stockholders that properly demand redemption of their Public Shares for cash.

 

Q:

WILL HOW I VOTE AFFECT MY ABILITY TO EXERCISE REDEMPTION RIGHTS?

 

A:

No. You may exercise your redemption rights whether you vote your Public Shares for or against, or whether you abstain from voting on, the Business Combination Proposal or any other Proposal described in this proxy statement/prospectus. As a result, the Business Combination Proposal can be approved by stockholders who will redeem their Public Shares and no longer remain stockholders and the Merger may be consummated even though the funds available from the Trust Account and the number of Public Stockholders are substantially reduced as a result of redemptions by Public Stockholders.

 

Q:

HOW DO I EXERCISE MY REDEMPTION RIGHTS?

 

A:

If you are a Public Stockholder and wish to exercise your redemption rights, you must demand that THMA redeem your Public Shares for cash no later than the second business day preceding the vote on the Business Combination Proposal by delivering your Public Shares to Continental, THMA’s transfer agent, physically or electronically using The Depository Trust Company’s DWAC (Deposit and Withdrawal at Custodian) system. See “THMA’s Special Meeting of Stockholders—Redemption Rights” for Continental’s address and contact information.

Any Public Stockholder will be entitled to demand that such holder’s Public Shares be redeemed for a pro rata portion of the amount then in the Trust Account (which, for illustrative purposes, was approximately $276,023,886 or $10.00 per share, as of October 18, 2021, the THMA Record Date). Such amount, including interest earned on the funds held in the Trust Account and not previously released to THMA to pay its taxes, will be paid promptly upon consummation of the Merger. However, under Delaware law, the proceeds held in the Trust Account could be subject to claims which could take priority over those of THMA’s Public Stockholders exercising redemption rights, regardless of whether such holders vote for or against the Business Combination Proposal. Therefore, the per-share distribution from the Trust Account in

 

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such a situation may be less than originally anticipated due to such claims. Your vote on any proposal will have no impact on the amount you will receive upon exercise of your redemption rights.

Any request for redemption, once made by a Public Stockholder, may be withdrawn at any time up to the time the vote is taken with respect to the Business Combination Proposal at the Special Meeting. If you deliver your Public Shares for redemption to THMA’s transfer agent and later decide prior to the Special Meeting not to elect redemption, you may request that THMA’s transfer agent return the Public Shares (physically or electronically).

If a Public Stockholder properly makes a request for redemption and the Public Shares are delivered as described to THMA’s transfer agent as described herein, then, if the Merger is consummated, THMA will redeem these shares for a pro rata portion of funds deposited in the Trust Account. If you exercise your redemption rights, then you will be exchanging your Public Shares for cash and you will cease to have any rights as a THMA stockholder (other than the right to receive the redemption amount) upon consummation of the Merger.

For a discussion of the material U.S. federal income tax consequences for holders of Public Shares with respect to the exercise of these redemption rights, see “Material U.S. Federal Income Tax Consequences—Material Tax Consequences of a Redemption of Public Shares.”

 

Q:

DO I HAVE APPRAISAL RIGHTS IF I OBJECT TO THE PROPOSED BUSINESS COMBINATION?

 

A:

No. Neither THMA stockholders nor its Unit or Public Warrant holders have appraisal rights in connection with the Business Combination under the DGCL. See the section entitled “THMA’s Special Meeting of Stockholders— Appraisal Rights.

 

Q:

WHAT HAPPENS TO THE FUNDS DEPOSITED IN THE TRUST ACCOUNT AFTER CONSUMMATION OF THE BUSINESS COMBINATION?

 

A:

A total of $276,000,000 in net proceeds of the Initial Public Offering and the amount raised from the private sale of warrants simultaneously with the consummation of the Initial Public Offering was placed in the Trust Account following the Initial Public Offering. After the consummation of the Merger, the funds in the Trust Account will be used to pay holders of the Public Shares who exercise redemption rights, to pay fees and expenses incurred in connection with the Merger (including aggregate fees of $9,660,000 as deferred underwriting commissions) and for the Post-Combination Company’s working capital and general corporate purposes.

 

Q:

WHAT HAPPENS IF THE MERGER IS NOT CONSUMMATED?

 

A:

If the Business Combination is not consummated, Pear will not become a wholly owned subsidiary of THMA and Pear equityholders will not receive any consideration for their shares of Pear capital stock or options. See “The Business Combination Agreement—Termination” and “Risk Factors” beginning on page 291 and page 29, respectively.

Further, THMA would search for another target business with which to complete a business combination. If THMA does not complete the Merger with Pear or another target business by May 4, 2023 (the “Combination Window”), THMA must redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the amount then held in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to THMA to pay taxes (less up to $100,000 of interest to pay dissolution expenses) divided by the number of outstanding Public Shares. The Initial Stockholders have no redemption rights in the event a business combination is not effected in the Combination Window, and, accordingly, their Founder Shares will be worthless. Additionally, in the event of such liquidation, there will be no distribution with respect to outstanding THMA warrants. Accordingly, the THMA warrants will expire and be worthless.

 

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Q:

HOW DOES THE SPONSOR INTEND TO VOTE ON THE PROPOSALS?

 

A:

The Initial Stockholders, including the Sponsor, are entitled to vote an aggregate of 20% of the outstanding THMA Common Shares and have agreed to vote any THMA Common Shares held by them as of the THMA Record Date in favor of each of the proposals presented at the Special Meeting.

 

Q:

WHAT CONSTITUTES A QUORUM AT THE SPECIAL MEETING?

 

A:

A majority of the voting power of the issued and outstanding common stock of THMA entitled to vote at the Special Meeting must be present, in person (which would include presence at a virtual meeting) or represented by proxy, at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining a quorum. The holders of the Founder Shares, who currently own 20% of the issued and outstanding THMA Common Shares, will count towards this quorum. In the absence of a quorum, the chairman of the Special Meeting has power to adjourn the Special Meeting. As of the THMA Record Date for the Special Meeting, 17,250,001 THMA Common Shares would be required to achieve a quorum.

 

Q:

WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL AT THE SPECIAL MEETING?

 

A:

The Business Combination Proposal: The affirmative vote (in person or by proxy) of the holders of a majority of the THMA Class A Common Shares and THMA Class B Common Shares entitled to vote and actually cast thereon at the Special Meeting, voting together as a single class, is required to approve the Business Combination Proposal. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Business Combination Proposal, will have no effect on the Business Combination Proposal. THMA stockholders must approve the Business Combination Proposal in order for the Merger to occur.

The Charter Approval Proposal: The affirmative vote (in person or by proxy) of (i) the holders of a majority of the Founder Shares then outstanding, voting separately as a single class and (ii) the holders of a majority of the THMA Class A Common Shares and THMA Class B Common Shares then outstanding and entitled to vote thereon, voting together as a single class, is required to approve the Charter Approval Proposal. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Charter Approval Proposal, will have the same effect as a vote “AGAINST” such proposal. The parties have also agreed to condition the Charter Approval Proposal on the affirmative vote (in person or by proxy) of the holders of a majority of the THMA Class A Common Shares then outstanding and entitled to vote thereon, voting separately as a single class. The Merger is conditioned on the approval of the Charter Approval Proposal, subject to the terms of the Business Combination Agreement. If the Business Combination Proposal is not approved, the Charter Approval Proposal will not be presented to the stockholders for a vote.

The Governance Proposals: The affirmative vote (in person or by proxy) of the holders of a majority of the THMA Class A Common Shares and THMA Class B Common Shares entitled to vote and actually cast thereon at the Special Meeting, voting together as a single class, is required to approve each of the Governance Proposals. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to any of the Governance Proposals, will have no effect on the Governance Proposals. The Merger is not conditioned on the approval of any of the Governance Proposals. If the Business Combination Proposal is not approved, the Governance Proposals will not be presented to the stockholders for a vote.

The Director Election Proposal: The affirmative vote (in person or by proxy) of the holders of a plurality of the outstanding THMA Class A Common Shares and THMA Class B Common Shares entitled to vote and

 

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actually cast thereon at the Special Meeting, voting together as a single class, is required to approve the Director Election Proposal. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Director Election Proposal, will have no effect on the election of directors. The Merger is conditioned on the approval of the Director Election Proposal, subject to the terms of the Business Combination Agreement. If the Business Combination Proposal is not approved, the Director Election Proposal will not be presented to the stockholders for a vote.

The Nasdaq Proposal: The affirmative vote (in person or by proxy) of the holders of a majority of the THMA Class A Common Shares and THMA Class B Common Shares entitled to vote and actually cast thereon at the Special Meeting, voting together as a single class, is required to approve the Nasdaq Proposal. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Nasdaq Proposal, will have no effect on the Nasdaq Proposal. The Merger is conditioned on the approval of the Nasdaq Proposal, subject to the terms of the Business Combination Agreement. If the Business Combination Proposal is not approved, the Nasdaq Proposal will not be presented to the stockholders for a vote.

The Incentive Plan Proposal: The affirmative vote (in person or by proxy) of the holders of a majority of the THMA Class A Common Shares and THMA Class B Common Shares entitled to vote and actually cast thereon at the Special Meeting, voting together as a single class, is required to approve the Incentive Plan Proposal. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Incentive Plan Proposal, will have no effect on the Incentive Plan Proposal. The Merger is conditioned on the approval of the Incentive Plan Proposal, subject to the terms of the Business Combination Agreement. If the Business Combination Proposal is not approved, the Incentive Plan Proposal will not be presented to the stockholders for a vote.

The Employee Stock Purchase Plan Proposal: The affirmative vote (in person or by proxy) of the holders of a majority of the THMA Class A Common Shares and THMA Class B Common Shares entitled to vote and actually cast thereon at the Special Meeting, voting together as a single class, is required to approve the Employee Stock Purchase Plan Proposal. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Employee Stock Purchase Plan Proposal, will have no effect on the Employee Stock Purchase Plan Proposal. The Merger is conditioned on the approval of the Employee Stock Purchase Plan Proposal, subject to the terms of the Business Combination Agreement. If the Business Combination Proposal is not approved, the Employee Stock Purchase Plan Proposal will not be presented to the stockholders for a vote.

The Adjournment Proposal: The affirmative vote (in person or by proxy) of the holders of a majority of the THMA Class A Common Shares and THMA Class B Common Shares entitled to vote and actually cast thereon at the Special Meeting, voting together as a single class, is required to approve the Adjournment Proposal. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Adjournment Proposal, will have no effect on the Adjournment Proposal. The Merger is not conditioned on the approval of the Adjournment Proposal.

As further discussed in the section entitled “Other Agreements—Sponsor Agreement” beginning on page 294 of this proxy statement/prospectus, the Sponsor and THMA’s directors, Advisor and officers have entered into a Sponsor Agreement with THMA and Pear, a copy of which is attached as Annex E to this proxy statement/prospectus, pursuant to which the Sponsor and such directors, Advisors and officers have agreed to vote their Founder Shares, representing 20% of the aggregate voting power of the THMA Common Shares, in favor of each of the Proposals presented at the Special Meeting.

 

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Q:

DO ANY OF THMA’S DIRECTORS OR OFFICERS HAVE INTERESTS IN THE BUSINESS COMBINATION THAT MAY DIFFER FROM OR BE IN ADDITION TO THE INTERESTS OF THMA STOCKHOLDERS?

 

A:

Certain of THMA’s executive officers and certain non-employee directors may have interests in the Merger that may be different from, or in addition to, the interests of THMA stockholders generally.

These interests include, among others:

 

   

If the Business Combination with Pear or another business combination is not consummated within the Combination Window, THMA will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Public Shares for cash and, subject to the approval of its remaining stockholders and the THMA Board, dissolving and liquidating. In such event, the 6,900,000 Founder Shares held by THMA’s Initial Stockholders, including 180,000 Founder Shares held by THMA’s independent directors and 180,000 Founder Shares held by THMA’s Advisors, which were acquired by the Sponsor for an aggregate purchase price of $25,000 prior to the Initial Public Offering, would be worthless because THMA’s Initial Stockholders are not entitled to participate in any redemption or distribution with respect to such shares. The Founder Shares held by the Sponsor had an aggregate market value of $65,073,000 based upon the closing price of $9.95 per THMA Class A Common Share on the Nasdaq on October 22, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The 180,000 Founder Shares held by THMA’s independent directors had an aggregate market value of $1,791,000 based upon the closing price of $9.95 per THMA Class A Common Share on the Nasdaq on October 22, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The 180,000 Founder Shares held by THMA’s Advisors had an aggregate market value of $1,791,000 based upon the closing price of $9.95 per THMA Class A Common Share on the Nasdaq on October 22, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus.

 

   

The Sponsor purchased an aggregate of 5,013,333 Private Placement Warrants from THMA for an aggregate purchase price of $7,520,000 (or $1.50 per warrant). These purchases took place in a private placement simultaneously with the consummation of the Initial Public Offering. A portion of the proceeds THMA received from these purchases were placed in the Trust Account. The Private Placement Warrants had an aggregate market value of $4,361,600 based upon the closing price of $0.87 per public warrant on the Nasdaq on October 22, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The Private Placement Warrants would become worthless if THMA does not consummate a business combination within the Combination Window.

 

   

Following the Closing, THMA will continue to indemnify THMA’s existing directors and officers and will maintain a directors’ and officers’ liability insurance policy.

 

   

No compensation of any kind, including finder’s and consulting fees, is paid to our Sponsor, officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination, except for reimbursement for 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. From the date of the Initial Public Offering until the date of the Business Combination Agreement, there have been no reimbursable out-of-pocket expenses incurred in connection with the Business Combination.

 

   

Our Chief Executive Officer and director, Elon Boms, is a Managing Director of the Pritzker Vlock Family Office and a manager of the Anchor Investor. Our Chief Operating Officer and director, Steven Benson is a Venture Partner with the Pritzker Vlock Family Office. Our Chief Financial Officer, Joseph Iannotta is the Controller of the Pritzker Vlock Family Office. Messrs Boms, Benson and Iannotta have led and assisted in, respectively, the evaluation of our business combination targets, including Pear, and the negotiation of our Business Combination with Pear.

 

   

The Anchor Investor, an affiliate of the Pritzker Vlock Family Office, has entered into the Amended Forward Purchase Agreement with us, pursuant to which the Anchor Investor has agreed to purchase

 

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2,300,000 THMA Class A Common Shares for a purchase price of $10.00 per share and at an aggregate purchase price of $23,000,000 (which amount may be increased under certain circumstances as described under “Other Agreements—Sponsor Agreement”).

   

An entity affiliated with the Pritzker Vlock Family Office holds an indirect economic interest in the Sponsor and the Anchor Investor.

 

   

The Sponsor and THMA’s directors, Advisors and officers have agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares held by them if THMA fails to complete the Business Combination during the Combination Window (as defined below). See “Information about THMA—Redemption of Public Shares and Liquidation if no Business Combination” on page 129 of this proxy statement/prospectus.

 

   

If the Trust Account is liquidated, including in the event THMA is unable to complete the Business Combination by February 4, 2023, our Sponsor has agreed to indemnify THMA to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share. Our Sponsor and THMA’s directors and officers will be relieved of this obligation upon the completion of the Business Combination and therefore may be incentivized to complete the Business Combination with Pear rather than liquidate even if (i) Pear is a less favorable target company as compared to other potential target companies or (ii) the terms of the Business Combination are less favorable to stockholders than the liquidation of the Trust Account. See “Risk Factors—THMA directors and officers may have interests in the Business Combination different from the interests of THMA stockholders.” on page 70 of this proxy statement/prospectus.

The THMA Board was aware of and considered these interests to the extent such interests existed at the time, among other matters, in approving the Business Combination Agreement and in recommending that the Business Combination be approved by the stockholders of THMA. See “The Business Combination—Interests of THMA’s Directors and Officers in the Business Combination” beginning on page 268 of this proxy statement/prospectus.

 

Q:

WHAT DO I NEED TO DO NOW?

 

A:

THMA urges you to read carefully and consider the information contained in this proxy statement/prospectus, including the Annexes attached hereto and the other documents referred to herein, and to consider how the Merger will affect you as a stockholder and/or warrant holder of THMA. Stockholders should consult, and rely solely upon, their respective tax and/or financial advisor for assistance on how the Merger may affect their individual situation. Stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card.

 

Q:

WHAT HAPPENS IF I SELL MY THMA CLASS A COMMON SHARES BEFORE THE SPECIAL MEETING?

 

A:

The THMA Record Date for the Special Meeting is earlier than the date that the Business Combination is expected to be completed. If you transfer your THMA Class A Common Shares after the THMA Record Date, but before the Special Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Special Meeting. However, you will not be able to seek redemption of your THMA Class A Common Shares because you will no longer be able to tender them prior to the Special Meeting in accordance with the provisions described herein. If you transferred your THMA Class A Common Shares prior to the THMA Record Date, you have no right to vote those shares at the Special Meeting or redeem those shares for a pro rata portion of the proceeds held in the Trust Account.

 

Q:

HOW DO I VOTE?

 

A:

If you are a holder of record of THMA Common Shares on the THMA Record Date, you may vote in person (which would include presence at a virtual meeting) at the Special Meeting or by submitting a proxy for the

 

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  Special Meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the meeting and vote in person (which would include presence at a virtual meeting), obtain a proxy from your broker, bank or nominee.

 

Q:

IF MY SHARES ARE HELD IN “STREET NAME” BY A BROKER, BANK OR OTHER NOMINEE, WILL MY BROKER, BANK OR OTHER NOMINEE VOTE MY SHARES FOR ME?

 

A:

If your shares are held in “street name” in a stock brokerage account or by a broker, bank or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank or other nominee. Please note that you may not vote shares held in “street name” by returning a proxy card directly to THMA or by voting in person (which would include presence at a virtual meeting) at the Special Meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank or other nominee.

Under the rules of the Nasdaq, brokers who hold shares in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not permitted to exercise their voting discretion with respect to the approval of matters that the Nasdaq determines to be “non-routine” without specific instructions from the beneficial owner. It is expected that all proposals to be voted on at the Special Meeting are “non-routine” matters. Broker non-votes occur when a broker or nominee is not instructed by the beneficial owner of shares to vote on a particular proposal for which the broker does not have discretionary voting power.

If you are a THMA stockholder holding your shares in “street name” and you do not instruct your broker, bank or other nominee on how to vote your shares, your broker, bank or other nominee will not vote your shares on the Business Combination Proposal, the Charter Approval Proposal, the Governance Proposals, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal or the Adjournment Proposal. Such broker non-votes will be the equivalent of a vote “AGAINST” the Charter Approval Proposal, but will have no effect on the vote count for such other proposals.

 

Q:

WHAT IF I ATTEND THE SPECIAL MEETING AND ABSTAIN OR DO NOT VOTE?

 

A:

For purposes of the Special Meeting, an abstention occurs when a stockholder attends the meeting in person (which would include presence at a virtual meeting) and does not vote or returns a proxy with an “abstain” vote.

If you are a THMA stockholder that attends the Special Meeting virtually and fails to vote on the Charter Approval Proposal, your failure to vote will have the same effect as a vote “AGAINST” such proposal.

If you are a THMA stockholder that attends the Special Meeting virtually and fails to vote on the Business Combination Proposal, the Governance Proposals, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal, your failure to vote will have no effect on the Business Combination Proposal, the Governance Proposals, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal or the Adjournment Proposal, as applicable.

 

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Q:

WHAT WILL HAPPEN IF I RETURN MY PROXY CARD WITHOUT INDICATING HOW TO VOTE?

 

A:

If you sign and return your proxy card without indicating how to vote on any particular proposal, the common stock represented by your proxy will be voted “FOR” each of the proposals presented at the Special Meeting.

 

Q:

MAY I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD?

 

A:

Yes. You may change your vote at any time before your proxy is exercised by doing any one of the following:

 

   

send another proxy card with a later date;

 

   

notify THMA’s secretary in writing before the Special Meeting that you have revoked your proxy; or

 

   

attend the Special Meeting and vote electronically by visiting and entering the control number found on your proxy card, instruction form or notice you previously received.

If you are a stockholder of record of THMA and you choose to send a written notice or to mail a new proxy, you must submit your notice of revocation or your new proxy to Morrow Sodali at the address listed below, and it must be received at any time before the vote is taken at the THMA Special Meeting. Any proxy that you submitted may also be revoked by submitting a new proxy prior to the Special Meeting or by voting online at the THMA Special Meeting. Simply attending the THMA Special Meeting will not revoke your proxy. If you have instructed a broker, bank or other nominee to vote your THMA Common Shares, you must follow the directions you receive from your broker, bank or other nominee in order to change or revoke your vote.

 

Q:

WHAT HAPPENS IF I FAIL TO TAKE ANY ACTION WITH RESPECT TO THE SPECIAL MEETING?

 

A:

If you fail to take any action with respect to the Special Meeting and the Merger is approved by stockholders and consummated, you will become a stockholder of the Post-Combination Company. Failure to take any action with respect to the Special Meeting will not affect your ability to exercise your redemption rights. If you fail to take any action with respect to the Special Meeting and the Merger is not approved, you will continue to be a stockholder and/or warrant holder of THMA while THMA searches for another target business with which to complete a business combination.

 

Q:

WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS?

 

A:

Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your THMA shares.

 

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Q:

WHO CAN HELP ANSWER MY QUESTIONS?

 

A:

If you have questions about the Merger or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact:

Morrow Sodali LLC

470 West Avenue

Stamford CT 06902

Individuals call toll-free (800) 662-5200

Banks and brokers call (203) 658-9400

Email: THMA.info@investor.morrowsodali.com

You may also obtain additional information about THMA from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.” If you are a holder of Public Shares and you intend to seek redemption of your Public Shares, you will need to deliver your stock (either physically or electronically) to THMA’s transfer agent at the address below prior to the vote at the Special Meeting. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company

1 State Street 30th Floor

New York, New York 10004

Attn: Mark Zimkind

Email: mzimkind@continentalstock.com

 

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SUMMARY

This summary highlights selected information included in this proxy statement/prospectus and does not contain all of the information that may be important to you. You should read this entire document and its annexes and the other documents to which we refer before you decide how to vote. Each item in this summary includes a page reference directing you to a more complete description of that item.

The Business Combination Agreement and the Business Combination (pages 249 and 276)

The terms and conditions of the Business Combination are contained in the Business Combination Agreement, which is attached as Annex A to this proxy statement/prospectus. We encourage you to read the Business Combination Agreement carefully, as it is the legal document that governs the Business Combination.

If the Business Combination Agreement is approved and adopted and the Business Combination is subsequently completed, Merger Sub will merge with and into Pear with Pear surviving the Merger as a wholly-owned subsidiary of THMA.

Merger Consideration (page 276)

In connection with the Business Combination, (i) holders of Pear Common Shares, Pear Preferred Shares and Pear Vested In-the-Money Options will receive aggregate upfront consideration of $1,200,000,000, payable in an aggregate of 120,000,000 THMA Class A Common Shares at a price of $10.00 per share and (ii) holders of Pear Common Shares and Pear Preferred Shares will receive the contingent right to receive up to 12,394,625 Earn Out Shares. The Earn Out Shares are payable in three equal tranches of 4,131,875 shares, each tied to a separate earn out milestone. The Earn Out Shares will be allocated pro rata to holders of Pear Common Shares and Pear Preferred Shares (on an as-converted basis) immediately prior to the consummation of the Business Combination as set forth in the Consideration Schedule (as defined below) which shall be delivered by Pear to THMA at least two Business Days prior to the Closing. Neither holders of Pear Vested In-the-Money Options nor holders of Pear Warrants immediately prior to the Effective Time will be eligible to receive Earn Out Shares. The following table sets forth an estimate of (x) the Per Share Upfront Consideration expected to be allocated to holders of Pear Common Shares, Pear Preferred Shares, Pear Vested In-the-Money Options and Pear Warrants and (y) the allocation of the Earn Out Shares among the holders of Pear Common Shares and Pear Preferred Shares, each based on the assumption that, since the execution of the Business Combination Agreement, Pear has not issued any additional equity (including pursuant to the exercise of options, warrants or other securities exchangeable or exercisable for equity of Pear).

 

     
      Per Share
Upfront
Consideration
   Earn Out
Shares

Holders of Pear Common Shares

   17,165,000    1,882,943

Holders of Pear Preferred Shares

   95,808,000    10,511,682

Holders of Pear Vested-In-the-Money Options

   5,797,000    None

Holders of Pear Warrants

   1,230,000    None

TOTAL

   120,000,000    12,394,625

Under the terms of the Business Combination Agreement, at the Effective Time:

 

  (i)

Each Pear Common Share issued and outstanding as of immediately prior to the Effective Time (excluding shares owned by Pear as treasury stock or dissenting shares) will be cancelled and converted into (x) the right to receive the Per Share Upfront Consideration and (y) the contingent right to receive

 

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  Earn Out Shares as set forth in a Consideration Schedule (as defined below). The “Per Share Upfront Consideration” is equal to such number of THMA Class A Common Shares equal to (i) $1,200,000,000 divided by $10.00 divided by (ii) the total number of Pear Common Shares outstanding immediately prior to the Effective Time, expressed on an as-exercised and as-converted to Pear Common Share basis (including any Pear Common Shares underlying Pear Vested In-the-Money Options or Pear Preferred Shares).

 

  (ii)

Each Pear Preferred Share issued and outstanding as of immediately prior to the Effective Time will be cancelled and converted into the right to receive Per Share Consideration in respect of such number of Pear Common Shares as set forth on a Consideration Schedule.

 

  (iii)

Each Pear In-the-Money Option will be cancelled in exchange for an option to purchase a number of THMA Class A Common Shares as set forth on the Consideration Schedule at an exercise price as set forth on such Consideration Schedule. All vested options to purchase Pear Common Shares are currently considered “in-the-money” with an average exercise price of $1.19, which is based on the implied value of each Pear Common Share from the exchange ratio used to compute the Per Share Upfront Consideration in the Merger. The exchange ratio applicable to such shares is defined as (i) $1.2 billion (the “Equity Value”), divided by (ii) $10.00, divided by (iii) the number of issued and outstanding shares of Pear common stock, on a fully diluted and as-converted basis.

 

  (iv)

Each Pear Warrant outstanding as of immediately prior to the Effective Time will be converted into a warrant to acquire a number of THMA Class A Common Shares in an amount and at an exercise price and subject to such terms and conditions, in each case, as set forth on the Consideration Schedule. The holders of all Pear Warrants that are currently outstanding have entered into agreements that require the automatic exercise of such Pear Warrants such that no Pear Warrants will be outstanding as of immediately prior to the Effective Time and as such no Pear Warrants will be converted into warrants to acquire THMA Class A Common Shares. Subject to certain exceptions, such terms and conditions will be the same terms and conditions as were applicable to the Pear Warrant immediately prior to the Effective Time.

The number of THMA Class A Common Shares to be issued to Pear stockholders in respect of their Pear Common Shares and their Pear Preferred Shares, together with the number of THMA Class A Common Shares that will underlie the Rollover Options issued to holders of Pear Vested In-the-Money Options, will be equal to 120,000,000.

Following the consummation of the Business Combination, when permitted by SEC rules, the Post-Combination Company intends to file a registration statement on Form S-8 with the SEC providing for the registration of (i) the Post-Combination Common Stock that will underlie the Rollover Options issued to holders of Pear-In-the-Money Options that are unvested as of immediately prior to the Effective Time and (ii) that are reserved for issuance under the 2021 Plan or 2021 ESPP.

Assuming that (a) no holders of THMA Class A Common Shares elect to have their Public Shares redeemed, (b) there are no other issuances of equity interests of THMA, (c) no Earn Out Shares are issued and (d) all Pear Vested In-the-Money Options remain unexercised as of immediately prior to the Effective Time, (i) the total number of THMA Class A Common Shares to be issued to Pear equityholders at the Effective Time is approximately 113,040,552, (ii) Pear equityholders as of immediately prior to the Effective Time will hold, in the aggregate, approximately 71.2% of the issued and outstanding THMA Class A Common Shares immediately following the Effective Time and (iii) THMA stockholders as of immediately prior to the Effective Time will hold, in the aggregate, approximately 20% of the issued and outstanding THMA Class A Common Shares immediately following the Effective Time.

Earn Out Consideration. Subject to certain exceptions, during the period between the date that is 90 days following the Closing and the fifth anniversary of the Closing, THMA will issue to holders of Pear Common

 

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Shares and holders of Pear Preferred Shares as of immediately prior to the Effective Time (the “Earn Out Eligible Pear Equityholders”) up to 12,394,625 additional THMA Class A Common Shares in the aggregate in three equal tranches of 4,131,875 Earn Out Shares, respectively, upon the occurrence of Triggering Event I, Triggering Event II and Triggering Event III, respectively. “Triggering Event I” will be considered achieved when the volume weighted average price of THMA Class A Common Shares on Nasdaq is greater than or equal to $12.50 for any 20 trading days within a 30 trading day period. “Triggering Event II” will be considered achieved when the volume weighted average price of THMA Class A Common Shares on Nasdaq is greater than or equal to $15.00 for any 20 trading days within a 30 trading day period. “Triggering Event III” will be considered achieved when the volume weighted average price of THMA Class A Common Shares on Nasdaq is greater than or equal to $17.50 for any 20 trading days within a 30 trading day period.

If, during the during the period between the date that is 90 days following the Closing and the fifth anniversary of the Closing, there is a Change of Control Transaction (as defined in the Business Combination Agreement) with respect to THMA (or a successor or parent company thereof), then immediately prior to the consummation of such Change of Control Transaction, (a) all of the Triggering Events shall have been deemed to occur, (b) THMA shall notify in writing the Earn Out Eligible Pear Equityholders that it intends to issue all of the Earn Out Shares to the Earn Out Eligible Pear Equityholders, (c) unless the Earn Out Eligible Pear Equityholder has provided written notification to THMA within ten (10) Business Days following the receipt of such notice by the Earn Out Eligible Pear Equityholder that such Earn Out Eligible Pear Equityholder is required to file a notification pursuant to the HSR Act with respect to such Earn Out Shares, THMA shall issue to the Earn Out Eligible Pear Equityholders an aggregate amount of 12,394,625 Earn Out Shares less the number of Earn Out Shares previously issued, if any, and (d) following such issuance, no further Earn Out Shares shall be issuable.

Fractional Shares. No fractional THMA Class A Common Shares will be issued by virtue of the Business Combination or the other transactions contemplated by the Business Combination Agreement. Each person who would otherwise be entitled to a fraction of a THMA Class A Common Share (after aggregating all fractional THMA Class A Common Shares that otherwise would be received by such holder) will instead have the number of THMA Class A Common Shares issued to such person rounded down in the aggregate to the nearest whole THMA Class A Common Share, and will be entitled to receive cash, without interest, rounded to the nearest cent, equal to the product of (a) the amount of the fractional share interest in a THMA Class A Common Share to which such holder otherwise would have been entitled multiplied by (b) $10.00.

Ownership of the Post-Combination Company

As of the date of this proxy statement/prospectus, there are 34,500,000 THMA Common Shares issued and outstanding, including 27,600,000 THMA Class A Common Shares and 6,900,000 THMA Class B Common Shares, each of which will be converted into one THMA Class A Common Share at the Closing. As of the date of this proxy statement/prospectus, there are an aggregate of 9,200,000 Public Warrants outstanding. Each Public Warrant entitles the holder thereof to purchase one THMA Class A Common Share. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination and assuming no redemptions), assuming that (i) each THMA Class B Common Share is converted into one THMA Class A Common Share and (ii) each outstanding Public Warrant is exercised and one THMA Class A Common Share is issued as a result of such exercise, the THMA fully-diluted stock capital would consist of 43,700,000 THMA Class A Common Shares.

As of immediately following the Closing, (i) assuming no Public Shares are redeemed, (ii) assuming there are no other issuances of equity interests of THMA, (iii) without taking into account any THMA warrants that will remain outstanding immediately following the Closing and may be exercised at a later date or the Earn Out Shares and (iv) assuming that all Pear Vested In-the-Money Options remain unexercised as of immediately prior to the Effective Time, the expected beneficial ownership of the Post-Combination Company will be as follows:

 

   

Current THMA Public Stockholders will own 27,600,000 THMA Class A Common Shares, representing approximately 17.4% of the total THMA Class A Common Shares outstanding;

 

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The Initial Stockholders will own 5,630,400 vested THMA Class A Common Shares (without taking into account an additional 1,269,600 THMA Class A Common Shares subject to vesting requirements pursuant to the Sponsor Agreement), representing approximately 3.5% of the total THMA Class A Common Shares outstanding;

 

   

The Subscribers will own 10,280,000 THMA Class A Common Shares, representing approximately 6.5% of the total THMA Class A Common Shares outstanding;

 

   

The Anchor Investor will own 2,300,000 THMA Class A Common Shares, representing approximately 1.4% of the total THMA Class A Common Shares outstanding; and

 

   

The current Pear equityholders will own 113,040,552 THMA Class A Common Shares on a fully diluted net exercise basis, representing approximately 71.2% of the total THMA Class A Common Shares outstanding.

As of immediately following the Closing, (i) 19,040,185 THMA Class A Common Shares are redeemed (representing the estimated maximum number of THMA Class A Common Shares that may be redeemed without resulting in the failure to satisfy the Minimum Cash Condition (as defined under “The Business Combination Agreement—Conditions to the Business Combination”)), (ii) assuming there are no other issuances of equity interests of THMA, (iii) without taking into account any THMA warrants that will remain outstanding immediately following the Closing and may be exercised at a later date or the Earn Out Shares and (iv) assuming that all Pear Vested In-the-Money Options remain unexercised as of immediately prior to the Effective Time, the expected beneficial ownership of the Post-Combination Company will be as follows:

 

   

Current THMA Public Stockholders will own 8,559,815 THMA Class A Common Shares, representing approximately 6.1% of the total THMA Class A Common Shares outstanding;

 

   

The Initial Stockholders will own 5,630,400 vested THMA Class A Common Shares (without taking into account an additional 1,269,600 THMA Class A Common Shares subject to vesting requirements pursuant to the Sponsor Agreement), representing approximately 4.0% of the total THMA Class A Common Shares outstanding;

 

   

The Subscribers will own 10,280,000 THMA Class A Common Shares, representing approximately 7.4% of the total THMA Class A Common Shares outstanding;

 

   

The Anchor Investor will own 2,300,000 THMA Class A Common Shares, representing approximately 1.6% of the total THMA Class A Common Shares outstanding; and

 

   

The current Pear equityholders will own 113,040,552 THMA Class A Common Shares on a fully diluted net exercise basis, representing approximately 80.9% of the total THMA Class A Common Shares outstanding.

Please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

Recommendation of the THMA Board of Directors (page 258)

The THMA Board has unanimously determined that the Business Combination, on the terms and conditions set forth in the Business Combination Agreement, is advisable and in the best interests of THMA and its stockholders and has directed that the Proposals set forth in this proxy statement/prospectus be submitted to its stockholders for approval at the Special Meeting on the date and at the time and place set forth in this proxy statement/prospectus. The THMA Board unanimously recommends that THMA’s stockholders vote “FOR” the Business Combination Proposal, “FOR” the Charter Approval Proposal, “FOR” the Governance Proposals, “FOR” the Director Election Proposal, “FOR” the Nasdaq Proposal, “FOR” the Incentive Plan Proposal, “FOR” the Employee Stock Purchase Plan Proposal and “FOR” the Adjournment Proposal, if presented. See

 

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The Business Combination—Recommendation of the THMA Board of Directors and Reasons for the Business Combination” beginning on page 258.

THMA’s Special Meeting of Stockholders (page 94)

The Special Meeting in lieu of the 2021 annual meeting of stockholders of THMA will be held on November 23, 2021, at 9:00 a.m., prevailing Eastern time, in virtual format at https://www.cstproxy.com/thimblepoint/2021. At the Special Meeting, THMA stockholders will be asked to vote on the Business Combination Proposal, the Charter Approval Proposal, the Governance Proposals, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and if necessary, the Adjournment Proposal to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Approval Proposal, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal.

Stockholders will be entitled to vote or direct votes to be cast at the Special Meeting if they owned THMA Common Shares at the close of business on October 18, 2021, which is the record date for the Special Meeting. Stockholders are entitled to one vote for each THMA Common Share owned at the close of business on the THMA Record Date. If stockholders’ shares are held in “street name” or are in a margin or similar account, stockholders should contact their broker, bank or other nominee to ensure that votes related to the shares they beneficially own are properly counted. On the THMA Record Date, there were 34,500,000 THMA Common Shares outstanding, of which 27,600,000 were Public Shares and 6,900,000 were Founder Shares.

A quorum of THMA stockholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting if a majority of the voting power of all outstanding shares of capital stock of THMA entitled to vote at the Special Meeting as of the THMA Record Date is represented in person (which would include presence at a virtual meeting) or by proxy. Abstentions and broker non-votes will be counted as present for the purpose of determining a quorum. The Initial Stockholders, who currently own 20% of the issued and outstanding THMA Common Shares, will count towards this quorum. As of the THMA Record Date, 17,250,001 THMA Common Shares would be required to achieve a quorum.

THMA has entered the Sponsor Agreement with the Sponsor and THMA’s directors and Advisors, pursuant to which each agreed to vote any THMA Common Shares owned by them in favor of each of the Proposals presented at the Special Meeting. The Proposals presented at the Special Meeting will require the following votes:

The approval of each of the Business Combination Proposal, the Governance Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal, if presented, requires the affirmative vote (in person or by proxy) of the holders of a majority of the THMA Class A Common Shares and THMA Class B Common Shares entitled to vote and actually cast thereon at the Special Meeting, voting together as a single class. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to each of the Business Combination Proposal, the Governance Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal or the Adjournment Proposal, if presented, will have no effect on the Business Combination Proposal, the Governance Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal or the Adjournment Proposal.

The approval of the Charter Approval Proposal requires the affirmative vote (in person or by proxy) of (i) the holders of a majority of the Founder Shares then outstanding, voting separately as a single class and (ii) the holders of a majority of the THMA Class A Common Shares and THMA Class B Common Shares then outstanding and entitled to vote thereon, voting together as a single class. The parties have also agreed to

 

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condition the Charter Approval Proposal on the affirmative vote (in person or by proxy) of the holders of a majority of the THMA Class A Common Shares then outstanding and entitled to vote thereon, voting separately as a single class. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Charter Approval Proposal, will have the same effect as a vote “AGAINST” such proposal.

Directors are elected by a plurality of all of the votes cast by the stockholders present in person (which would include presence at a virtual meeting) or represented by proxy at the Special Meeting and entitled to vote thereon. This means that the seven director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to election of directors, will have no effect on the election of directors.

Consummation of the Business Combination is conditioned on the approval of the Business Combination Proposal, the Charter Approval Proposal, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal at the Special Meeting, subject to the terms of the Business Combination Agreement. If the Business Combination Proposal is not approved, the other proposals (except the Adjournment Proposal) will not be presented to the stockholders for a vote.

THMA’s Directors and Executive Officers Have Financial Interests in the Business Combination (page 268)

Certain of THMA’s executive officers and certain non-employee directors may have interests in the Merger that may be different from, or in addition to, the interests of THMA stockholders generally. These interests include, among other things:

 

   

If the Business Combination with Pear or another business combination is not consummated within the Combination Window, THMA will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Public Shares for cash and, subject to the approval of its remaining stockholders and the THMA Board, dissolving and liquidating. In such event, the 6,900,000 Founder Shares held by THMA’s Initial Stockholders, including 180,000 Founder Shares held by THMA’s independent directors and 180,000 Founder Shares held by THMA’s Advisors, which were acquired by the Sponsor for an aggregate purchase price of $25,000 prior to the Initial Public Offering, would be worthless because THMA’s Initial Stockholders are not entitled to participate in any redemption or distribution with respect to such shares. The Founder Shares held by the Sponsor had an aggregate market value of $65,073,000 based upon the closing price of $9.95 per THMA Class A Common Share on the Nasdaq on October 22, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The 180,000 Founder Shares held by THMA’s independent directors had an aggregate market value of $1,791,000 based upon the closing price of $9.95 per THMA Class A Common Share on the Nasdaq on October 22, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The 180,000 Founder Shares held by THMA’s Advisors had an aggregate market value of $1,791,000 based upon the closing price of $9.95 per THMA Class A Common Share on the Nasdaq on October 22, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. In addition, given the differential in the purchase price that our Sponsor paid for the Founder Shares as compared to the price of the units sold in the Initial Public Offering and the substantial number of shares of THMA Class A common stock that our Sponsor will receive upon conversion of the Founder Shares in connection with the Business Combination, our Sponsor and the other Initial Stockholders may earn a positive rate of return on their investment even if the common stock of the Post-Combination Company trades below the price initially paid for the units in the Initial Public Offering and the public stockholders experience a negative rate of return following the completion of the Business Combination.

 

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The Sponsor purchased an aggregate of 5,013,333 Private Placement Warrants from THMA for an aggregate purchase price of $7,520,000 (or $1.50 per warrant). These purchases took place in a private placement simultaneously with the consummation of the Initial Public Offering. A portion of the proceeds THMA received from these purchases were placed in the Trust Account. The Private Placement Warrants had an aggregate market value of $4,361,600 based upon the closing price of $0.87 per public warrant on the Nasdaq on October 22, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The Private Placement Warrants would become worthless if THMA does not consummate a business combination within the Combination Window.

 

   

Following the Closing, THMA will continue to indemnify THMA’s existing directors and officers and will maintain a directors’ and officers’ liability insurance policy.

 

   

No compensation of any kind, including finder’s and consulting fees, is paid to our Sponsor, officers and directors or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination, except for reimbursement for 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. From the date of the Initial Public Offering until the date of the Business Combination Agreement, there have been no reimbursable out-of-pocket expenses incurred in connection with the Business Combination.

 

   

Our Chief Executive Officer and director, Elon Boms, is a Managing Director of the Pritzker Vlock Family Office and a manager of the Anchor Investor. Our Chief Operating Officer and director, Steven Benson is a Venture Partner with the Pritzker Vlock Family Office. Our Chief Financial Officer, Joseph Iannotta is the Controller of the Pritzker Vlock Family Office. Messrs Boms, Benson and Iannotta have led and assisted in, respectively, the evaluation of our business combination targets, including Pear, and the negotiation of our Business Combination with Pear.

 

   

The Anchor Investor, an affiliate of the Pritzker Vlock Family Office, has entered into the Amended Forward Purchase Agreement with us, pursuant to which the Anchor Investor has agreed to purchase 2,300,000 THMA Class A Common Shares for a purchase price of $10.00 per share and at an aggregate purchase price of $23,000,000 (which amount may be increased under certain circumstances as described under “Other Agreements—Sponsor Agreement”).

 

   

An entity affiliated with the Pritzker Vlock Family Office holds an indirect economic interest in the Sponsor and the Anchor Investor.

 

   

The Sponsor and THMA’s directors, Advisors and officers have agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares held by them if THMA fails to complete the Business Combination during the Combination Window (as defined below). See “Information about THMA—Redemption of Public Shares and Liquidation if no Business Combination” on page 129 of this proxy statement/prospectus.

The THMA Board was aware of and considered these interests to the extent such interests existed at the time, among other matters, in reaching the determination to approve the terms of the Business Combination and in recommending to THMA’s stockholders that they vote to approve the Business Combination. For a detailed discussion of the special interests that THMA’s directors and executive officers may have in the Business Combination, please see the section entitled “The Business Combination—Interests of THMA’s Directors and Executive Officers in the Business Combination” beginning on page 268.

Pear’s Directors and Executive Officers Have Financial Interests in the Business Combination (page 272)

Certain of Pear’s executive officers and directors may have financial interests in the Business Combination that may be different from, or in addition to, the interests of Pear stockholders. The Pear board of directors was aware of and considered these interests, among other matters, in reaching the determination to approve the terms

 

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of the Business Combination. For a detailed discussion of the special interests that Pear’s directors and executive officers may have in the Business Combination, please see the section entitled “The Business Combination—Interests of Pear’s Directors and Executive Officers in the Business Combination” beginning on page 272.

Regulatory Approvals Required for the Business Combination (page 273)

Completion of the Business Combination is subject to approval under the HSR Act. Each of Pear and THMA has agreed to use their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary or advisable to consummate and make effective as promptly as reasonably practicable the transactions contemplated by the Business Combination Agreement and to obtain, file with or deliver to, as applicable, any notice, authorization, qualification, registration, filing, notification, waiver, order, consent, permit or approval of any governmental entity or other person necessary, proper or advisable to consummate the transactions contemplated by the Business Combination Agreement or the Ancillary Agreements.

THMA and Pear filed Notification and Report Forms with the Antitrust Division and the FTC on July 2, 2021, and the 30-day waiting period expired at 11:59 p.m., New York City time, on August 5, 2021. The regulatory approvals to which completion of the Business Combination is subject are described in more detail in the section entitled “Regulatory Approvals Required for the Business Combination beginning on page 273.

Appraisal Rights (page 336)

Holders of THMA Common Shares are not entitled to appraisal rights in connection with the Business Combination under Delaware law.

Conditions to the Business Combination (page 289)

Conditions to Each Party’s Obligations. The respective obligations of each of THMA, Pear and Merger Sub to consummate the Merger are subject to the satisfaction or, if permitted by applicable law, the waiver of the following conditions:

 

   

the applicable waiting period (and any extensions thereof) under the HSR Act relating to the transactions contemplated by the Business Combination Agreement will have expired or been terminated;

 

   

no governmental order or law issued by any court or other governmental entity restraining, prohibiting or making illegal the consummation of the transactions contemplated by the Business Combination Agreement will be pending or in effect;

 

   

the registration statement of which this proxy statement/prospectus forms a part will have become effective under the Securities Act, no stop order suspending the effectiveness of the registration statement will have been issued by the SEC and remain in effect and no proceedings seeking such a stop order will have been threatened or initiated by the SEC and remain pending;

 

   

after giving effect to the transactions contemplated by the Business Combination Agreement, THMA will have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) immediately after the Effective Time;

 

   

the requisite approval by THMA stockholders of the Required Proposals will have been obtained; and

 

   

the requisite approval of Pear stockholders of the Business Combination will have been obtained.

Conditions to Obligations of THMA and Merger Sub. The obligation of THMA and Merger Sub to consummate the Merger are also subject to the satisfaction or, if permitted by applicable law, the waiver by THMA of the following conditions:

 

   

each of the representations and warranties of Pear related to organization, good standing and qualification, corporate authority, approval and fairness, absence of certain changes since

 

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December 31, 2020 and brokers and finders must be true and correct in all material respects as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty must be true and correct in all material respects as of such earlier date);

 

   

the representations and warranties of Pear related to Pear’s capital structure must be true and correct, except for de minimis inaccuracies, as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty must be true and correct in all respects (except for de minimis inaccuracies) as of such earlier date);

 

   

all other representations and warranties of Pear must be true and correct (without giving effect to any limitation as to “materiality” or “Pear Material Adverse Effect” or any similar limitation set forth therein) in all respects as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty must be true and correct in all respects as of such earlier date), where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, reasonably be expected to have a Pear Material Adverse Effect;

 

   

Pear will have performed or complied in all material respects with the covenants and agreements required to be performed or complied with by it under the Business Combination Agreement at or prior to the Closing;

 

   

since the date of the Business Combination Agreement, no Pear Material Adverse Effect has occurred; and

 

   

Pear must have delivered a certificate duly executed by an authorized officer of Pear, dated as of the Closing Date, to the effect that the first five conditions in this list are satisfied, in a form and substance reasonably satisfactory to THMA, and copies of the Registration Rights Agreement duly executed by Pear’s stockholders.

Conditions to Obligations of Pear. The obligation of Pear to consummate the Merger are also subject to the satisfaction or, if permitted by applicable law, the waiver by Pear of the following conditions:

 

   

THMA must have cash at the Closing (including cash contained in the Trust Account, plus other cash and cash equivalents of THMA, plus the cash proceeds delivered to THMA in connection with the consummation of the PIPE Transaction and the Forward Purchase, less the aggregate amount of cash proceeds that will be required to satisfy the redemption of any Public Shares, less the repayment of the $1.0 million THMA’s Promissory note - related party and any unpaid expenses of THMA in connection with the transactions contemplated by the Business Combination Agreement) of no less than $200 million;

 

   

each of the representations and warranties of THMA and Merger Sub related to organization, good standing and qualification, corporate authority and approval and brokers and finders must be true and correct in all material respects as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty must be true and correct in all material respects as of such earlier date);

 

   

the representations and warranties of THMA and Merger Sub related to THMA’s capital structure must be true and correct, except for de minimis inaccuracies, as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty must be true and correct in all respects (except for de minimis inaccuracies) as of such earlier date);

 

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all other representations and warranties of THMA and Merger Sub must be true and correct (without giving effect to any limitation as to “materiality” or “THMA Material Adverse Effect” or any similar limitation set forth therein) in all respects as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty must be true and correct in all respects as of such earlier date), where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, reasonably be expected to have a THMA Material Adverse Effect;

 

   

THMA and Merger Sub will have performed or complied in all material respects with the covenants and agreements required to be performed or complied with by it under the Business Combination Agreement at or prior to the Closing;

 

   

the THMA Class A Common Shares to be issued in connection with the Business Combination must have been approved for listing on the Nasdaq;

 

   

the Proposed Charter and the Proposed Bylaws will have been duly adopted by THMA’s stockholders;

 

   

the Post-Combination Company Board will consist of seven directors and be comprised of certain individuals determined in accordance with the Business Combination Agreement; and

 

   

THMA must have delivered a certificate duly executed by an authorized officer of THMA, dated as of the Closing Date, to the effect that the second, third, fourth and fifth conditions in this list are satisfied, in a form and substance reasonably satisfactory to Pear and copies of the Registration Rights Agreement duly executed by THMA and the Sponsor.

No Solicitation (page 284)

Pear. From the date of the Business Combination Agreement to the earlier of the Closing or the termination of the Business Combination Agreement in accordance with its terms, Pear has agreed, and has agreed to cause its subsidiaries, not to (i) solicit, initiate, knowingly encourage (including by means of furnishing or disclosing information), knowingly facilitate, discuss or negotiate, directly or indirectly, any inquiry, proposal or offer (written or oral) with respect to (x) a transaction or series of related transactions under which any third party, directly or indirectly, acquires Pear or any of its controlled affiliates, or acquires 25% or more of the assets or businesses of Pear or any of its controlled affiliates measured by consolidated net revenues, net income or total assets, or (y) a transaction or series of related transactions involving any equity or similar investment in Pear or any of its controlled affiliates (any such transaction, a “Pear Acquisition Proposal”), (ii) furnish or disclose any non-public information to any person in connection with, or that would reasonably be expected to lead to, a Pear Acquisition Proposal, (iii) enter into any contract or other arrangement or understanding regarding a Pear Acquisition Proposal; (iv) prepare or take any steps in connection with a public offering of any equity securities of Pear or its subsidiaries or (v) otherwise cooperate in any way, or assist or participate in, or knowingly facilitate or encourage any effort or attempt by any person to do or seek to do any of the items set forth above.

THMA. From the date of the Business Combination Agreement to the earlier of the Closing or the termination of the Business Combination Agreement in accordance with its terms, THMA has agreed not to (i) solicit, initiate, knowingly encourage (including by means of furnishing or disclosing information), knowingly facilitate, discuss or negotiate, directly or indirectly, any inquiry, proposal or offer (written or oral) with respect to (x) a transaction or series of related transactions under which THMA acquires any third party, engages in a business combination with any third party or acquires all or a material portion of the assets or businesses of any third party, or (y) any equity, debt or similar investment in THMA (any such transaction, a “THMA Acquisition Proposal”), (ii) furnish or disclose any non-public information to any person in connection with, or that would reasonably be expected to lead to, a THMA Acquisition Proposal, (iii) enter into any contract or other arrangement or understanding regarding a THMA Acquisition Proposal, (iv) prepare or take any steps in

 

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connection with an offering of any securities of THMA or its subsidiaries or (v) otherwise cooperate in any way with, or assist or participate in, or knowingly facilitate or encourage any effort or attempt by any person to do or seek to do any of the items set forth above.

Termination (page 291)

The Business Combination Agreement may be terminated at any time prior to the Closing, whether before or after adoption of the Business Combination Agreement by Pear’s stockholders or approval of the Required Proposals.

Mutual Termination Rights

The Business Combination Agreement may be terminated and the transactions contemplated thereby may be abandoned at any time prior to the Closing:

 

   

by written consent of THMA and Pear;

 

   

by either Pear or THMA, if the Merger is not consummated by December 21, 2021 or, in the event that the registration statement of which this proxy statement/prospectus forms a part has not become effective by November 11, 2021 and all other conditions to the consummation of the Merger have been satisfied (other than (x) the Effective Registration Statement Condition, the THMA Stockholder Approval Condition, the Nasdaq Listing Condition, the Post-Combination Charter and Bylaws Condition and the Post-Combination Company Board Condition and (y) those conditions that by their nature are to be satisfied at the Closing), March 21, 2022; provided that the right to terminate the Business Combination Agreement as described in this bullet point will not be available to THMA or Pear if THMA’s or Pear’s, as applicable, breach of any of its covenants or obligations under the Business Combination Agreement has proximately caused the failure of a condition to the consummation of the Merger;

 

   

by either Pear or THMA, if any governmental entity has issued an order or taken any other action permanently enjoining, restraining or otherwise prohibiting the consummation of the transactions contemplated by the Business Combination Agreement and such order or other action has become final and nonappealable; provided, that the right to terminate the Business Combination Agreement as described in this paragraph will not be available to any party that has materially breached its obligations under the Business Combination Agreement in any manner that proximately contributed to such order becoming final and non-appealable; or

 

   

by either Pear or THMA, if a special meeting of THMA’s stockholders has been held (including any adjournment or postponement thereof) and has concluded, and THMA’s stockholders have duly voted on the Required Proposals and did not approve all of the Required Proposals.

Pear Termination Rights

The Business Combination Agreement may be terminated and the transactions contemplated thereby may be abandoned at any time prior to the Closing if any of the representations or warranties of THMA and Merger Sub are not true and correct or if THMA or Merger Sub has failed to perform any covenant or agreement set forth in the Business Combination Agreement such that the conditions described in the second, third, fourth and fifth bullet points under the heading “—Conditions to the Business Combination—Conditions to the Obligations of Pear” could not be satisfied and the breach or breaches causing such representations or warranties not to be true and correct, or the failures to perform any covenant or agreement, as applicable, cannot be cured or, if curable, is not cured within the earlier of (i) 30 days after written notice thereof is delivered to THMA by Pear and (ii) the Termination Date; provided, however, that the right to terminate the Business Combination Agreement described

 

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in this paragraph will not be available to Pear if it is then in breach of the Business Combination Agreement so as to prevent any of the conditions described in the first four bullet points under the heading “—Conditions to the Business Combination—Conditions to the Obligations of THMA and Merger Sub” from being satisfied.

THMA Termination Rights

The Business Combination Agreement may be terminated and the transactions contemplated thereby may be abandoned at any time prior to the Closing if:

 

   

any of the representations or warranties of Pear are not true and correct or if Pear has failed to perform any covenant or agreement set forth in the Business Combination Agreement such that the conditions described in the first four bullet points under the heading “—Conditions to the Business Combination—Conditions to the Obligations of THMA and Merger” could not be satisfied and the breach or breaches causing such representations or warranties not to be true and correct, or the failures to perform any covenant or agreement, as applicable, cannot be cured or, if curable, is not cured within the earlier of (i) 30 days after written notice thereof is delivered to Pear by THMA and (ii) the Termination Date; provided, however, that the right to terminate the Business Combination Agreement described in this paragraph will not be available to THMA if it is then in breach of the Business Combination Agreement so as to prevent any of the conditions described the second, third, fourth and fifth bullet points under the heading “—Conditions to the Business Combination—Conditions to the Obligations of Pear” from being satisfied; or

 

   

Pear does not deliver a written consent approving and adopting the Business Combination Agreement and the transactions contemplated thereby that is duly executed by Pear’s stockholders holding at least the requisite number of issued and outstanding Pear Common Shares and Pear Preferred Shares required to approve and adopt such matters in accordance with the DGCL and Pear’s organizational documents.

Effect of Termination

In the event of termination of the Business Combination Agreement pursuant to the termination provisions described above, the Business Combination Agreement will become void with no liability on the part of any party, except that (a) such termination will affect any liability on the part of any party for any willful breach of any covenant or agreement set forth in the Business Combination Agreement prior to its termination or for fraud and (b) certain provisions, including those relating to waiver of claims by Pear against the Trust Account, will survive the termination of the Business Combination Agreement.

None of the parties to the Business Combination Agreement is required to pay a termination fee or reimburse any other party for its expenses as a result of a termination of the Business Combination Agreement.

Other Agreements (page 294)

Sponsor Agreement

In connection with the execution of the Business Combination Agreement and pursuant to the terms of a Sponsor Agreement entered into among Pear, THMA, the Sponsor and THMA’s directors, Advisors and officers, a copy of which is attached to this proxy statement/prospectus as Annex E, the Sponsor and THMA’s directors, Advisors and officers have agreed to vote any Public Shares and Founder Shares held by them in favor of each of the Proposals presented at the Special Meeting. As of the date of this proxy statement/prospectus, the Sponsor, THMA’s directors, Advisors and officers and their permitted transferees own at least 20% of the outstanding THMA Common Shares entitled to vote thereon. The quorum and voting thresholds at the Special Meeting and

 

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the Sponsor Agreement may make it more likely that THMA will consummate the Business Combination. In addition, pursuant to the terms of the Sponsor Agreement, the Sponsor and THMA’s directors, Advisors and officers have agreed to waive their redemption rights with respect to any Founder Shares and any Public Shares held by them in connection with the completion of a business combination, have agreed not to transfer any Public Shares and Founder Shares held by them for a certain period of time following the Business Combination, and have agreed to subject the Founder Shares held by the Sponsor as of the Closing to certain performance-based vesting provisions. See “Other Agreements—Sponsor Agreement.”

Pear Stockholder Support Agreements

Immediately following the execution of the Business Combination Agreement, certain equityholders of Pear representing the requisite votes necessary to approve the Merger entered into Pear Stockholder Support Agreements with THMA and Pear, pursuant to which each Supporting Pear Equityholder agreed to, among other things, (a) vote all of its Pear Common Shares and Pear Preferred Shares (or any securities convertible into or exercisable or exchangeable for Pear Common Shares and Pear Preferred Shares) in favor of the approval and adoption of the Business Combination Agreement, the Ancillary Agreements to which Pear is or will be a party and the transactions contemplated thereby (including the Merger) and (b) be bound by certain other covenants and agreements related to the Merger. See “Other Agreements—Pear Stockholder Support Agreements.”

Pear Lock-Up Agreements

Immediately following the execution of the Business Combination Agreement, certain of the Supporting Pear Equityholders entered into the Lock-Up Agreements with THMA, pursuant to which, among other things, each Supporting Pear Equityholder agreed not to sell or otherwise dispose of any THMA Class A Common Shares or any other equity securities of THMA convertible into or exercisable or exchangeable for THMA Class A Common Shares held by any of them for a period of 180 days after the Closing Date other than pursuant to certain exceptions described therein. See “Other Agreements—Pear Stockholder Support Agreements.”

Subscription Agreements

In connection with the execution of the Business Combination Agreement, THMA entered into Subscription Agreements with the Subscribers pursuant to which the Subscribers have agreed to purchase, and THMA has agreed to sell to the Subscribers, an aggregate of 10,280,000 shares of THMA Class A Common Shares, for a purchase price of $10.00 per share and at an aggregate purchase price of $102,800,000. The PIPE Transaction is expected to close immediately prior to the closing of the Business Combination on the Closing Date. The consummation of the PIPE Transaction is contingent upon, among other customary closing conditions, the satisfaction or waiver of all conditions precedent to the closing of the Business Combination set forth in the Business Combination Agreement and the substantially concurrent consummation of the Business Combination. See “Other Agreements—Subscription Agreements.

If the 10,280,000 THMA Class A Common Shares to be issued to the Subscribers simultaneously with the consummation of the Business Combination were currently outstanding, such shares would have an aggregate market value of $102,286,000 based upon the closing price of $9.95 per Public Share on the Nasdaq on October 22, 2021 the most recent practicable date prior to the date of this proxy statement/prospectus.

Registration Rights Agreement

The Business Combination Agreement contemplates that, at the Closing, THMA, the Sponsor, certain stockholders of THMA and certain former stockholders of Pear will enter into an Amended and Restated Registration Rights Agreement, a copy of which is attached to this proxy statement/prospectus as Annex D,

 

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pursuant to which, among other things, the Sponsor, the other THMA stockholders party thereto and the Pear stockholders party thereto (i) will agree not to effect any sale or distribution of any of their equity securities of THMA for a period of 180 days after the Closing Date other than pursuant to certain exceptions described therein and (ii) will be granted certain registration rights with respect to their THMA Class A Common Shares. See “Other Agreements—Registration Rights Agreement.

Proposed Charter Amendment

Pursuant to the terms of the Business Combination Agreement, in connection with the consummation of the Business Combination, THMA will amend the Current Charter to (a) increase the number of authorized shares of THMA’s capital stock, par value $0.0001 per share, from 221,000,000 shares, consisting of (i) 220,000,000 THMA Class A Common Shares and 20,000,000 shares of THMA Class B Common Shares, and (ii) 1,000,000 shares of preferred stock, to 700,000,000 shares, consisting of (i) 690,000,000 THMA Class A Common Shares and (ii) 10,000,000 shares of preferred stock, (b) eliminate certain provisions in its Current Charter relating to the Class B common stock, the initial business combination and other matters relating to THMA’s status as a blank-check company that will no longer be applicable to THMA following the Closing, and (c) approve and adopt any other changes contained in the Proposed Charter. In addition, THMA will amend the Current Charter to change its name to “Pear Holdings Corp.”

For more information, see the section entitled “Proposal Number 2—The Charter Approval Proposal.”

Amended and Restated Bylaws

Pursuant to the terms of the Business Combination Agreement, in connection with the consummation of the Business Combination, THMA will amend and restate its bylaws to be in the form of attached hereto as Annex C (the “Proposed Bylaws”).

THMA Nasdaq Listing

The THMA Class A Common Shares are listed on Nasdaq under the symbol “THMA.” Following the Business Combination, the Class A common stock of the Post-Combination Company (including the Class A common stock issuable in the Business Combination) will be listed on Nasdaq under the symbol “PEAR.”

Comparison of Stockholders’ Rights (page 303)

Following the Business Combination, the rights of Pear stockholders who become stockholders of the Post-Combination Company in the Business Combination will no longer be governed by Pear’s charter and Pear’s bylaws and instead will be governed by the Proposed Charter and the Proposed Bylaws. See “Comparison of Stockholders’ Rights” beginning on page 303.

Summary Risk Factors

You should consider all the information contained in this proxy statement/prospectus in deciding how to vote for the proposals presented in this proxy statement/prospectus. In particular, you should consider the risk factors described under “Risk Factors” beginning on page 29. Some of these risks that relate to Pear include, but are not limited to:

Risks relating to Pear’s business and industry, including that:

 

   

The failure of Pear’s prescription digital therapeutics to achieve and maintain market acceptance and adoption by patients and physicians would cause Pear’s business, financial condition and results of operation to be materially and adversely affected.

 

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The insurance coverage and reimbursement status of novel products, such as prescription digital therapeutics, is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for Pear’s products would substantially impair Pear’s ability to generate revenue.

 

   

The market for prescription digital therapeutics is new, rapidly evolving, and increasingly competitive, as the healthcare industry in the United States is undergoing significant structural change, which makes it difficult to forecast demand for Pear’s products. As a result, all projections included herein are subject to change.

 

   

Pear’s future depends on the continued contributions of its senior management team and its ability to attract and retain other highly qualified personnel; in particular, Corey McCann, its President and Chief Executive Officer, and Christopher Guiffre, its Chief Financial Officer and Chief Operating Officer, are critical to its future vision and strategic direction.

 

   

Pear’s products are made available via the Apple Store and the Google Play Store and supported by third-party infrastructure. If Pear’s ability to access those markets or access necessary third-party infrastructure was stopped or otherwise restricted or limited, it would materially and adversely affect Pear’s business.

 

   

Pear faces competition and new products may emerge that provide different or better alternatives for treatment of the conditions that Pear’s products are authorized to treat. Many of its current and future competitors have or will have significantly more resources.

Risks relating to Pear’s financial position, including that:

 

   

Pear has a history of significant losses, anticipates increasing expenses in the future, and may not be able to achieve or maintain profitability.

 

   

Due to the resources required for the development of Pear’s pipeline, and depending on its ability to access capital, Pear will have to prioritize the development of certain product candidates over others. Pear may fail to expend its limited resources on product candidates that may have been more profitable or for which there is a greater likelihood of success, which would cause Pear’s business, financial condition and results of operations to be materially and adversely affected.

 

   

Pear will need substantial additional funding, and if it is unable to raise capital when needed or on terms favorable to Pear, Pear’s business, financial condition and results of operation could be materially and adversely affected.

Risks relating to Pear’s intellectual property and technology, including that:

 

   

Limitations on Pear’s ability to maintain or obtain patent protection and/or the patent rights relating to Pear’s products and product candidates may limit Pear’s ability to prevent third parties from competing against Pear.

 

   

Pear is party to and may, in the future, enter into collaborations, in-licensing arrangements, joint ventures, or strategic alliances with third parties that may not result in the development of commercially viable products or the generation of significant or any future revenues.

 

   

Pear in-licenses patents and content from third parties to develop its products and product candidates. If Pear had a dispute with a third-party licensor, it could materially and adversely affect Pear’s ability to commercialize the product or product candidate affected by the dispute.

Risks relating to Pear’s products, including that:

 

   

If Pear is not able to develop and release new products, or successful enhancements, new features and modifications to Pear’s existing products, Pear’s business, financial condition and results of operations could be materially and adversely affected.

 

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Clinical trials of any of Pear’s products or product candidates may fail to produce results necessary to support regulatory clearance or authorization.

 

   

Interim, “topline” and preliminary data from clinical trials of Pear’s products or product candidates may change as more patient data becomes available and are subject to confirmation, audit, and verification procedures that could result in material changes in the final data.

Risks relating to Pear’s regulatory compliance and legal matters, including that:

 

   

Pear operates in a highly regulated industry and is subject to a wide range of federal, state and local laws, rules and regulations, including U.S. Food and Drug Administration (“FDA”) regulatory requirements and laws pertaining to fraud and abuse in healthcare, that affect nearly all aspects of our operations. Failure to comply with these laws, rules and regulations, or to obtain and maintain required licenses, could subject Pear to enforcement actions, including substantial civil and criminal penalties, and might require Pear to recall or withdraw a product from the market or cease operations. Any of the foregoing could materially and adversely affect its business, financial condition and results of operations.

 

   

Pear is subject to data privacy and security laws and regulations governing Pear’s collection, use, disclosure, or storage of personally identifiable information, including protected health information and payment card data, which may impose restrictions on Pear and Pear’s operations. Any actual or perceived noncompliance with such laws and regulations may result in penalties, regulatory action, loss of business or unfavorable publicity.

 

   

Security breaches, ransomware attacks and other disruptions to Pear’s information technology structure could compromise Pear’s information, disrupt its business and expose Pear to significant liability, which would cause Pear’s business and reputation to suffer and it may be unable to maintain and scale the technology underlying its offerings.

 

   

Pear’s commercialization efforts to date have focused almost exclusively on the U.S. Pear’s ability to enter other foreign markets will depend, among other things, on its ability to navigate various regulatory regimes with which it does not have experience, which could delay or prevent the growth of Pear’s operations outside of the U.S.

 

   

The regulatory framework for digital health products is constantly evolving. Increasingly stringent regulatory requirements could create barriers to Pear’s development and introduction of new products. Conversely, in the event that regulatory requirements are lowered, competitors could potentially enter the prescription digital therapeutic market and compete against the Company more easily. Either of the foregoing could materially harm the Company’s business.

 

   

Pear’s products may face competition from digital health products that are marketed without regulatory clearance, authorization, or approval. Regulators have broad discretion in determining whether to enforce regulatory requirements, and may decide not to remove uncleared or unapproved products that compete with Pear’s products, which could materially and adversely impact Pear’s business.

 

   

Premarket clearances, authorizations, and approvals for new or significantly modified devices could be denied or significantly delayed.

Risks relating to Pear’s financial reporting, including that:

 

   

If Pear fails to maintain an effective system of internal control over financial reporting, it may not be able to accurately report our financial results or prevent fraud. As a result, investors may lose confidence in the accuracy of its financial reports, which would harm our business and the trading price of our common stock. Pear’s management will be required to evaluate the effectiveness of its internal control over financial reporting.

 

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Pear’s management has identified certain internal control deficiencies, which constitute material weaknesses. If it fails to maintain an effective system of disclosure controls and internal control over financial reporting, its ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

Material U.S. Federal Income Tax Consequences (page 298)

For a discussion summarizing the material U.S. federal income tax consequences of the exercise of Redemption Rights, please see “Material U.S. Federal Income Tax Considerations.”

Information about THMA (page 127)

THMA is a blank check company formed 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. The THMA Class A Common Shares, Units and Public Warrants are currently listed on Nasdaq under the symbols “THMA”, “THMA.U” and “THMA.W,” respectively. The mailing address of THMA’s principal executive office is 195 Church Street, 15th Floor, New Haven, Connecticut 06510 and the telephone number of THMA’s principal executive office is (203) 680-8543.

Information about Pear (page 157)

Pear is a commercial-stage healthcare company pioneering a new class of software-based medicines, sometimes referred to as Prescription Digital Therapeutics, which use software to treat diseases directly. PDTs are software applications authorized by FDA that are intended to treat disease. PDTs are designed to be prescribed by clinicians, reimbursed by third-party payors, and used by patients to improve clinical outcomes as part of a patient’s care, similar to FDA approved medications and medical devices. PDTs are authorized to deliver evidence-based mechanisms-of-action, such as cognitive behavioral therapy, contingency management, and exposure therapy, that the patient engages with on their mobile device and may be used alone or in combination with medications. The value of Pear’s FDA-authorized PDTs is supported by evidence demonstrating safety and clinical effectiveness in randomized control trials, and collected data on PDT usage and clinical outcomes in real-world data, and health economic value. Our vision is to advance healthcare through the widespread use of PDTs, and to be the one-stop shop for PDTs offered both by Pear and by other organizations that may choose to host their products on our commercial platform. See “Information About Pear.”

Pear is a privately-held Delaware corporation. The mailing address of Pear’s principal executive office is 200 State Street, Boston, Massachusetts 02109 and the telephone number of Pear’s principal executive office is (617) 932-7108.

 

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SUMMARY HISTORICAL FINANCIAL DATA FOR THMA

The summary selected historical statements of operations data of THMA for the period from December 1, 2020 (inception) through December 31, 2020 and the balance sheet data as of December 31, 2020 are derived from THMA’s audited annual financial statements included elsewhere in this proxy statement/prospectus. The summary selected historical condensed statements of operations data of THMA for the six months ended June 30, 2021 and the condensed balance sheet data as of June 30, 2021 are derived from THMA’s unaudited interim financial statements included elsewhere in this proxy statement/prospectus. You should read the following summary financial information in conjunction with the section entitled “THMA Management’s Discussion and Analysis of Financial Condition and Results of Operations” and THMA’s financial statements and related notes appearing elsewhere in this proxy statement/prospectus.

We have neither engaged in any operations nor generated any revenue to date. Our only activities from inception through June 30, 2021 were organizational activities and those necessary to complete our Initial Public Offering and identifying a target company for a business combination. We do not expect to generate any operating revenue until after the consummation of the Business Combination.

 

     Six Months Ended
June 30, 2021
(Unaudited)
    Period from
December 1, 2020
(inception)
through
December 31, 2020

(Audited)
 

Condensed Statement of Operations:

    

Operating and formation costs

   $ 2,974,830     $ 2,177  
  

 

 

   

 

 

 

Loss from operations

     (2,974,830     (2,177
  

 

 

   

 

 

 

Other income:

    

Interest earned on marketable securities held in Trust Account

     15,739       —    

Change in fair value of warrants

     (4,406,133     —    

Change in fair value of promissory note

    
11,600
 
    —    

Unrealized gain on marketable securities held in Trust Account

     4,595       —    
  

 

 

   

 

 

 

Other expense, net

     (4,374,199     —    
  

 

 

   

 

 

 

Loss before (provision for) benefit from income taxes

     (7,349,029     —    

(Provision for) benefit from income taxes

     —         —    

Net loss

   $ (7,349,029     —    
  

 

 

   

 

 

 

Basic and diluted weighted average shares outstanding, THMA Class A common stock subject to possible redemption

     27,600,000       —    
  

 

 

   

 

 

 

Basic and diluted net loss per share, THMA Class A common stock subject to possible redemption

   $ 0.00     $ 0.00  
  

 

 

   

 

 

 

Basic and diluted weighted average shares outstanding, Non-redeemable common stock

     6,725,967       6,000,000  

Basic and diluted net loss per share, Non-redeemable common stock

   $ (1.09   $ —    
  

 

 

   

 

 

 

 

     June 30, 2021
(Unaudited)
    December 31, 2020
(Audited)
 

Balance Sheet Data:

    

Cash

   $ 1,345,945     $ —    

Total Assets

     277,782,674       310,450  

Total Liabilities

     33,250,310       287,627  

THMA Class A common stock subject to possible redemption 27,600,000 shares at June 30, 2021 (at redemption value of $10 per share)

     276,000,000       —    

Total Stockholders’ (Deficit) Equity

     (31,467,636     22,823  

 

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SUMMARY HISTORICAL FINANCIAL DATA FOR PEAR

The following selected historical consolidated financial information for Pear set forth below should be read in conjunction with “Pear’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Pear’s historical consolidated financial statements and the related notes included elsewhere in this proxy statement/prospectus.

The selected historical consolidated financial information presented below for the years ended December 31, 2020 and 2019 have been derived from Pear’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus.

The selected financial data as of June 30, 2021, and for the six months ended June 30, 2021 and 2020 have been derived from Pear’s unaudited condensed consolidated financial statements included elsewhere in this proxy statement/prospectus. The unaudited financial data presented have been prepared on a basis consistent with Pear’s audited consolidated financial statements. In the opinion of Pear’s management, such unaudited financial data reflect all adjustments, consisting only of normal and recurring adjustments necessary for a fair presentation of the results for those periods. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year or any future period.

 

     Six Months Ended June 30,     Years Ended December 31,  
     2021     2020     2020     2019  

(in thousands, except per share amounts)

   (Unaudited)     (Unaudited)         (Audited)             (Audited)      

Statement of Operations Data:

        

Total revenue

   $ 1,577     $ 9,274     $ 9,384     $ 32,562  

Total cost and operating expenses

     44,677       38,281       86,028       64,165  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (43,100     (29,007     (76,644     (31,603

Other income (expenses):

        

Interest and other (expense) income, net

     (2,044     115       (1,767     1,416  

Change in estimated fair value of warrant liabilities

     (5,397     (20     (795     (1

Loss on issuance of convertible preferred stock

     (2,053     —         (16,819     —    

Amortization of deferred gain on note payable

     —         —         —         544  

(Loss) gain on extinguishment of debt

     —         (998     (998     20,310  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (52,594   $ (29,910   $ (97,023   $ (9,334
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss on repurchase of convertible preferred stock

   $ —       $ —       $ (11,053   $ —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to common shareholders

   $ (52,594   $ (29,910   $ (108,076   $ (9,334
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share—basic and diluted

     $(4.64     $(2.00     $(7.32     $(0.63
  

 

 

   

 

 

   

 

 

   

 

 

 

 

     June 30,      December 31,  
     2021      2020      2019  

(in thousands)

   (Unaudited)          (Audited)              (Audited)      

Balance Sheet Data:

        

Cash and cash equivalents

   $ 92,219      $ 110,900      $ 27,415  

Working capital, net (1)

     60,408        85,371        89,877  

Total assets

     111,363        132,366        109,692  

Short-term debt, net (2)

     26,654        26,345        4,444  

 

(1) 

Working capital, net is defined as current assets less current liabilities.

(2) 

Due to the substantial doubt about our ability to continue operating as a going concern and the material adverse change clause in the loan agreement with our lender, the amounts outstanding as of June 30, 2021 and December 31, 2020 have been classified as current in the consolidated financial statements. The lender has not invoked the material adverse change clause as of the date of issuance of these financial statements.

 

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     June 30,     December 31,  
     2021     2020     2019  

(in thousands)

   (Unaudited)         (Audited)             (Audited)      

Total liabilities

   $ 53,166     $ 45,250     $ 30,908  

Convertible preferred stock

     291,392       269,422       144,827  

Total stockholders’ deficit

     (233,195     (182,306     (66,043
      

Statement of Cash Flows Data:

      

Net cash used in operating activities

   $ (43,866   $ (67,894   $ (36,596

Net cash provided by (used in) investing activities

     5,503       58,925       (40,563

Net cash provided by financing activities

     19,682       91,703       12,656  

 

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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following summary unaudited pro forma combined financial information (the “summary pro forma data”) presents the combination of the financial information of THMA and Pear, adjusted to give effect to the consummation of the Merger, the PIPE Transaction and the Forward Purchase (collectively, the “Transactions”). Under both the no redemption and the maximum redemption scenario, the Merger will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with U.S. GAAP. Under this method of accounting, THMA will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Merger will be treated as the equivalent of Pear issuing stock for the net assets of THMA, accompanied by a recapitalization. The net assets of THMA will be stated at historical cost, with no goodwill or other intangible assets recorded. The summary unaudited pro forma condensed combined balance sheet data as of June 30, 2021 gives effect to the Transactions as if they had occurred on June 30, 2021. The summary unaudited pro forma condensed combined statements of operations data for the year ended December 31, 2020 and for the six months ended June 30, 2021 give effect to the Transactions as if they had occurred on January 1, 2020.

The summary pro forma data have been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed combined financial information (the “pro forma financial statements”) of THMA appearing elsewhere in this proxy statement/prospectus and the accompanying notes to the pro forma financial statements. The pro forma condensed combined financial statements are based upon, and should be read in conjunction with, the historical financial statements and related notes of THMA and Pear for the applicable periods included in this proxy statement/prospectus.

The summary pro forma data have been presented for informational purposes only and are not necessarily indicative of what Pear’s and THMA’s financial position or results of operations actually would have been had the Transactions been completed as of the dates indicated. In addition, the summary pro forma data do not purport to project the future financial position or operating results of the Post-Combination Company.

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below:

 

   

No Redemption: This scenario assumes that no THMA Class A Common Shares are redeemed by Public Stockholders; and

 

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Maximum Redemption: This scenario assumes that 19,040,185 THMA Class A Common Shares are redeemed for an aggregate payment of approximately $190.4 million (based on an estimated per share redemption price of approximately $10.00 per share) from the Trust Account. The Business Combination Agreement includes as a condition to Pear’s obligation to consummate the Merger that, at the Closing, THMA will have a minimum of $200.0 million in cash. This $200.0 million includes the sum of all cash contained in the Trust Account, all other cash and cash equivalents of THMA, and cash received in connection with the PIPE Transaction and the Amended Forward Purchase Agreement, less the aggregate amount of cash proceeds that will be required to satisfy the redemption of any Public Shares, less the repayment of the $1.0 million THMA’s Promissory note - related party and any unpaid expenses of THMA in connection with the transactions contemplated by the Business Combination Agreement. The number of shares redeemed under the Maximum Redemption scenario reflects the estimated maximum number of redemptions that could occur without a failure to satisfy this minimum cash condition.

 

     Combined Pro Forma  
     Six Months Ended
June 30, 2021
 

(in thousands, except share and per share amounts)

   Assuming
No
Redemptions
    Assuming
Maximum
Redemptions
 

Summary Unaudited Pro Forma Combined Statement of Operations Data:

    

Loss from operations

   $ (46,089   $ (46,089

Net loss

   $ (59,977   $ (59,977

Loss per share (basic and diluted) attributable to Class A common stockholders

     ($0.38     ($0.43

Weighted average Class A common shares outstanding

     158,850,952       139,810,767  

 

     Combined Pro Forma  
     Year Ended December 31, 2020  

(in thousands, except share and per share amounts)

   Assuming
No
Redemptions
    Assuming
Maximum
Redemptions
 

Summary Unaudited Pro Forma Combined Statement of Operations Data:

    

Loss from operations

   $ (79,968   $ (79,968

Net loss

   $ (100,346   $ (100,346

Loss per share (basic and diluted) attributable to Class A common stockholders

     ($0.63     ($0.72

Weighted average Class A common shares outstanding

     158,850,952       139,810,767  

 

     Combined Pro Forma  
     June 30, 2021  

(in thousands)

   Assuming
No
Redemptions
     Assuming
Maximum
Redemptions
 

Summary Unaudited Pro Forma Combined Balance Sheet Data:

     

Total assets

   $ 481,962      $ 291,546  

Debt obligation

   $ 26,654      $ 26,654  

Total liabilities

   $ 182,720      $ 182,720  

Total stockholders’ equity

   $ 299,242      $ 108,826  

 

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UNAUDITED HISTORICAL COMPARATIVE AND PRO FORMA COMPARATIVE PER SHARE DATA OF THMA AND PEAR

The following table sets forth summary historical comparative share and unit information for THMA and

Pear and unaudited pro forma combined per share information of THMA after giving effect to the Transactions,

assuming two redemption scenarios as follows:

 

   

No Redemptions: This scenario assumes that no THMA Class A Common Shares are redeemed by Public Stockholders; and

 

   

Maximum Redemption: This scenario assumes that 19,040,185 THMA Class A Common Shares are redeemed for an aggregate payment of approximately $190.4 million (based on an estimated per share redemption price of approximately $10.00 per share) from the Trust Account. The Business Combination Agreement includes as a condition to Pear’s obligation to consummate the Merger that, at the Closing, THMA will have a minimum of $200.0 million in cash. This $200.0 million includes the sum of all cash contained in the Trust Account, all other cash and cash equivalents of THMA, and cash received in connection with the PIPE Transaction and the Amended Forward Purchase Agreement, less the aggregate amount of cash proceeds that will be required to satisfy the redemption of any Public Shares, less the repayment of the $1.0 million THMA’s Promissory note - related party and any unpaid expenses of THMA in connection with the transactions contemplated by the Business Combination Agreement. The number of shares redeemed under the Maximum Redemption scenario reflects the estimated maximum number of redemptions that could occur without a failure to satisfy this minimum cash condition.

The unaudited pro forma book value information reflects the Transactions as if they had occurred on June 30, 2021. The weighted average shares outstanding and net earnings per share information reflect the Transactions as if they had occurred on January 1, 2020. This information is only a summary and should be read together with the summary historical financial information included elsewhere in this proxy statement/prospectus, and the historical financial statements of THMA and Pear and related notes that are included elsewhere in this proxy statement/prospectus. The unaudited pro forma combined per share information of THMA and Pear is derived from, and should be read in conjunction with, the unaudited pro forma combined financial information and related notes included elsewhere in this proxy statement/prospectus. The unaudited pro forma combined earnings per share information below does not purport to represent the earnings per share would have occurred had the companies been combined during the periods presented, nor earnings per share that for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of THMA and Pear would have been had the companies been combined during the periods presented:

 

    Historical     Pro Forma Combined  

(in thousands, except share and per share amounts)

  Thimble
Point
Acquisition
Corp.
    Pear
Therapeutics,
Inc.
    Assuming
No
Redemptions
    Assuming
Maximum
Redemptions
 

As of and for the Six Months Ended June 30, 2021(1)

       

Book value per share(2)

  ($ 0.91   ($ 3.06   $ 1.88     $ 0.78  

Weighted average common shares outstanding—basic and diluted

    n/a       11,341,935       158,850,952       139,810,767  

Weighted average shares outstanding of Class A—basic and diluted

    27,600,000       n/a       n/a       n/a  

Weighted average shares outstanding of Class B—basic and diluted

    6,725,967       n/a       n/a       n/a  

Net loss per common share—basic and diluted

    n/a     ($ 4.64   ($ 0.38   ($ 0.43

Net income per Class A share—basic and diluted

  $ —         n/a       n/a       n/a  

Net income per Class B share—basic and diluted

  ($ 1.09     n/a       n/a       n/a  

 

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(1)

There was no cash dividends for either THMA or Pear in the period presented.

(2)

Historical book value per share for THMA and Pear is calculated as permanent equity divided by the total number of outstanding shares classified in permanent equity. Pro forma book value per share is calculated as pro forma total stockholders’ equity divided by the total shares of the Post-Combination Company immediately after the Transactions under each scenario.

 

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MARKET PRICE AND DIVIDEND INFORMATION

THMA

The THMA Class A Common Shares, Units and Public Warrants are traded on the Nasdaq under the symbols “THMA,” “THMA.U” and “THMA.W,” respectively.

The closing price of the THMA Class A Common Shares, Units and Public Warrants on June 21, 2021, the last trading day before announcement of the execution of the Business Combination Agreement, was $9.70, $9.98 and $0.98, respectively. As of October 18, 2021, the THMA Record Date, the most recent closing price for each THMA Class A Common Share, Unit and Public Warrant was $9.94, $10.21 and $0.88, respectively.

Holders of the THMA Class A Common Shares, Units and Public Warrants should obtain current market quotations for their securities. The market price of THMA’s securities could vary at any time before the Business Combination.

Holders

As of October 18, 2021, there were one holder of record of THMA’s Units, one holder of record of THMA Class A Common Shares, nine holders of record of THMA Class B Common Shares and two holders of record of Public Warrants. The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose Units, Public Shares and Public Warrants are held of record by banks, brokers and other financial institutions.

Dividend Policy

THMA has not paid any cash dividends on its common stock to date and does not intend to pay cash dividends prior to the completion of the Business Combination. The payment of cash dividends in the future will be dependent upon the Post-Combination Company’s revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of the Business Combination. The payment of any cash dividends subsequent to the Business Combination will be within the discretion of the Post-Combination Company Board at such time. The Post-Combination Company’s ability to declare dividends may also be limited by restrictive covenants pursuant to any debt financing agreements.

Pear

Historical market price information for Pear’s capital stock is not provided because there is no public market for Pear’s capital stock. See “Pear’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Pear has never declared or paid cash dividends on its common stock and currently intends to retain all available funds and any future earnings to fund its business, and it does not anticipate paying any cash dividends in the foreseeable future.

 

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FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus includes forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial, of THMA and Pear. These statements are based on the beliefs and assumptions of the management of THMA and Pear. Although THMA and Pear believe that their respective plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, neither THMA nor Pear can assure you that either will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward- looking statements. These statements may be preceded by, followed by or include the words “believes”, “estimates”, “expects”, “projects”, “forecasts”, “may”, “might”, “will”, “should”, “seeks”, “plans”, “scheduled”, “possible”, “anticipates”, “intends”, “aims”, “works”, “focuses”, “aspires”, “strives” or “sets out” or similar expressions.

Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements which speak only as of the date hereof. You should understand that the following important factors, in addition to those discussed under the heading “Risk Factors” and elsewhere in this proxy statement/prospectus, could affect the future results of THMA and Pear prior to the Business Combination, and the Post-Combination Company following the Business Combination, and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements in this proxy statement/prospectus. Forward-looking statements in this proxy statement/prospectus may include, for example, statements about:

 

   

our ability to complete the Business Combination with Pear or, if we do not consummate such Business Combination, any other initial business combination;

 

   

satisfaction or waiver of the conditions to the Business Combination including, among others: (i) the approval by our stockholders of the Required Proposals necessary to consummate the Business Combination being obtained; (ii) the applicable waiting period under the HSR Act relating to the Business Combination Agreement having expired or been terminated; and (iii) THMA having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) after giving effect to the transactions contemplated by the Business Combination Agreement and the PIPE Transaction;

 

   

the occurrence of any event, change or other circumstances, including the outcome of any legal proceedings that may be instituted against THMA and Pear following the announcement of the Business Combination Agreement and the transactions contemplated therein, that could give rise to the termination of the Business Combination Agreement;

 

   

the projected financial information, growth rate and market opportunity of the Post-Combination Company;

 

   

the ability to obtain and/or maintain the listing of the Post-Combination Company Common Stock on the Nasdaq Stock Market, and the potential liquidity and trading of such securities;

 

   

the risk that the proposed Business Combination disrupts current plans and operations of Pear as a result of the announcement and consummation of the proposed Business Combination;

 

   

the ability to recognize the anticipated benefits of the proposed Business Combination, which may be affected by, among other things, competition, and the ability of the Post-Combination Company to grow and manage growth profitably and retain its key employees;

 

   

costs related to the proposed Business Combination;

 

   

our ability to raise financing in the future, if and when needed;

 

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our success in retaining or recruiting, or changes required in, our officers, key employees or directors following the completion of the Business Combination;

 

   

our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving the Business Combination;

 

   

Pear’s prescription digital therapeutics’ ability to achieve and maintain market acceptance and adoption by patients and physicians;

 

   

Pear’s ability to obtain or maintain adequate insurance coverage and reimbursement for Pear’s products;

 

   

Pear’s ability to accurately forecast demand for Pear’s products;

 

   

Pear’s ability to attract and retain its senior management and other highly qualified personnel (in particular, Corey McCann, its President and Chief Executive Officer);

 

   

Pear’s ability to maintain access for its products via the Apple Store and the Google Play Store;

 

   

Pear’s ability to achieve or maintain profitability;

 

   

Pear’s ability to maintain or obtain patent protection and/or the patent rights relating to Pear’s products and Pear’s ability to prevent third parties from competing against Pear;

 

   

Pear’s ability to successfully commercialize its products;

 

   

Pear’s ability to obtain and maintain regulatory approval for Pear’s product candidates, and any related restrictions or limitations of an approved product candidate;

 

   

Pear’s ability to obtain funding for its operations, including funding necessary to complete further development, approval and, if approved, commercialization of Pear’s product candidates;

 

   

the period over which Pear anticipates its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements;

 

   

Pear’s ability to identify, in-license or acquire additional product candidates;

 

   

Pear’s ability to successfully protect against security breaches, ransomware attacks and other disruptions to Pear’s information technology structure;

 

   

the impact of applicable laws and regulations, whether in the United States or foreign countries, and any changes thereof;

 

   

Pear’s ability to successfully compete against other companies developing similar products to Pear’s current and future product offerings;

 

   

Pear’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

 

   

Pear’s financial performance;

 

   

the effect of COVID-19 on the foregoing, including our ability to consummate the Business Combination due to the continuing uncertainty resulting from the COVID-19 pandemic; and

 

   

other factors detailed under the section entitled “Risk Factors.”

These and other factors that could cause actual results to differ from those implied by the forward-looking statements in this proxy statement/prospectus are more fully described under the heading “Risk Factors” and elsewhere in this proxy statement/prospectus. The risks described under the heading “Risk Factors” are not exhaustive. Other sections of this proxy statement/prospectus describe additional factors that could adversely affect the business, financial condition or results of operations of THMA and Pear prior to the Business Combination, and the Post-Combination Company following the Business Combination. New risk factors emerge

 

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from time to time and it is not possible to predict all such risk factors, nor can THMA or Pear assess the impact of all such risk factors on the business of THMA and Pear prior to the Business Combination, and the Post-Combination Company following the Business Combination, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to THMA or Pear or persons acting on their behalf are expressly qualified in their entirety by the foregoing cautionary statements. THMA and Pear prior to the Business Combination, and the Post-Combination Company following the Business Combination, undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

In addition, statements of belief and similar statements reflect the beliefs and opinions of THMA or Pear, as applicable, on the relevant subject. These statements are based upon information available to THMA or Pear, as applicable, as of the date of this proxy statement/prospectus, and while such party believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and statements should not be read to indicate that THMA or Pear, as applicable, has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

 

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RISK FACTORS

These risk factors are not exhaustive and investors are encouraged to perform their own investigation with respect to the business, prospects, financial condition and operating results of THMA and Pear and the business, prospects, financial condition and operating results of the Post-Combination Company following the completion of the Business Combination. You should carefully consider the following risk factors in addition to the other information included in this proxy statement/prospectus, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements,” before deciding how to vote your THMA Class A Common Shares. THMA and Pear may face additional risks and uncertainties that are not presently known to them, or that they currently deem immaterial, which may also impair their or the Post-Combination Company’s respective business, prospects, financial condition or operating results. The following discussion should be read in conjunction with the financial statements of THMA and Pear and the notes to the financial statements included therein.

Risks Related to Pear’s Business and Industry

Unless the context otherwise requires, for purposes of this section, the terms “we,” “us,” “the Company,” “Pear” or “our company” refer to Pear and its subsidiaries prior to the Business Combination or the Post-Combination Company from and after the Business Combination.

The failure of the Company’s prescription digital therapeutics to achieve and maintain market acceptance and adoption by patients and physicians would cause the Company’s business, financial condition and results of operation to be materially and adversely affected.

Our current business strategy is highly dependent on our prescription digital therapeutics, or PDTs, achieving and maintaining broad market acceptance by patients and physicians. Market acceptance and adoption of our PDTs depends on educating people with chronic conditions, as well as self-insured employers, commercial and government payors, health plans and physicians and other government entities, as to the distinct features, therapeutic benefits, cost savings, and other advantages of our PDTs as compared to competitive products or other currently available methodologies. If we are not successful in demonstrating to existing or potential patients and prescribers the benefits of our products, or if we are not able to achieve the support of patients, healthcare providers and payors for our products, our sales may decline or we may fail to increase our sales in line with our forecasts.

Achieving and maintaining market acceptance of our products could be negatively impacted by many factors, including:

 

   

the failure of reSET, reSET-O and Somryst to achieve wide acceptance among people with substance use disorder, opioid use disorder and chronic insomnia, self-insured employers, commercial and government payors, health plans, physicians and other government entities, and key opinion leaders in the treatment community;

 

   

lack of additional evidence or peer-reviewed publication of clinical or real world evidence supporting the effectiveness, safety, cost-savings or other advantages of our products over competitive products or other currently available methodologies;

 

   

perceived risks associated with the use of our products or similar products or technologies generally;

 

   

our ability to secure and maintain U.S. Food and Drug Administration and other regulatory clearance, authorization or approval for our products;

 

   

the introduction of competitive products and the rate of acceptance of those products as compared to our products; and

 

   

results of clinical, real world and health economics and outcomes research (HEOR) studies relating to chronic condition products or similar competitive products.

 

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In addition, our products may be perceived by patients and healthcare providers to be more complicated or less effective than traditional approaches, and people may be unwilling to change their current health regimens. Moreover, we believe that healthcare providers tend to be slow to change their medical treatment practices because of perceived liability risks arising from the use of new products and the uncertainty of third-party reimbursement. Accordingly, healthcare providers may not recommend our products until there is sufficient evidence to convince them to alter their current approach.

The insurance coverage and reimbursement status of novel products, such as prescription digital therapeutics, is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for the Company’s products would substantially impair the Company’s ability to generate revenue.

In the United States, patients generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors is critical to the ability of patients to afford treatments and new product acceptance. Our ability to successfully commercialize our products will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. The availability of coverage and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford treatments. Sales of products, and of product candidates that we may identify, will depend substantially on the extent to which the costs to users of such products will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If coverage and adequate reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our products. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to achieve profitability.

There is also significant uncertainty related to, and there may be significant delays in obtaining, the insurance coverage and reimbursement of newly cleared, authorized, or approved products and coverage may be more limited than the purposes for which the device is cleared, authorized, or approved by the FDA or comparable foreign regulatory authorities. In the United States, the principal decisions about reimbursement for new medicines or medical devices are typically made by the Centers for Medicare & Medicaid Services (“CMS”), an agency within the U.S. Department of Health and Human Services (“HHS”). FDA clearance or authorization provides no assurance of coverage or reimbursement by any payor. CMS decides whether and to what extent a new medicine or medical device will be covered and reimbursed under Medicare, and private payors tend to follow CMS to a substantial degree.

Factors payors consider in determining reimbursement are based on whether the product is:

 

   

a covered benefit under its health plan;

 

   

safe, effective and medically necessary;

 

   

supported by robust clinical data from well-controlled clinical research;

 

   

appropriate for the specific patient;

 

   

cost-effective; and

 

   

neither experimental nor investigational.

Each payor determines whether or not it will provide coverage for a treatment, what amount it will pay the manufacturer for the treatment and on what tier of its formulary the treatment will be placed. The position of a treatment on a payor’s list of covered drugs, biological products, and medical devices, or formulary, generally

 

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determines the co-payment that a patient will need to make to obtain the treatment and can strongly influence the adoption of such treatment by patients and physicians. Patients who are prescribed treatments for their conditions and providers prescribing such services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our products.

Moreover, eligibility for coverage and reimbursement does not imply that a product will be paid for in all cases or at a rate that covers our costs, including research, development, intellectual property, manufacture, marketing, sale and distribution expenses. Interim reimbursement levels for new products, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the use of the product and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost products and may be incorporated into existing payments for other services. Net prices for products may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors, by any future laws limiting prices and by any future relaxation of laws that presently restrict imports of products from countries where they may be sold at lower prices than in the United States.

Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular drugs or devices. We cannot be sure that coverage and reimbursement will be available for all products that we commercialize and, if reimbursement is available, what the level of reimbursement will be. Inadequate coverage and reimbursement may impact the demand for, or the price of, any product for which we obtain marketing approval. If coverage and adequate reimbursement are not available, or are available only at limited levels, we may not be able to successfully commercialize our products.

In addition, in some foreign countries, the proposed pricing for a prescription device must be approved before it may be lawfully marketed. The requirements governing medical product pricing vary widely from country to country. For example, the European Union provides options for its Member States to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost effectiveness of a particular product candidate to currently available therapies. A Member State may approve a specific price for the medicinal products or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceuticals or medical devices will allow favorable reimbursement and pricing arrangements for any of our products. Historically, products launched in the European Union do not follow price structures of the United States and generally prices tend to be significantly lower. While the Company is not currently marketing or selling its products in any country other than the United States, including the European Union or any of its Member States, in the event that the Company chooses to do so in the future, it will need to comply with such requirements.

The market for prescription digital therapeutics is new, rapidly evolving, and increasingly competitive, as the healthcare industry in the United States is undergoing significant structural change, which makes it difficult to forecast demand for the Company’s products. As a result, all projections included herein are subject to change.

The market for our PDTs is new and rapidly evolving, and it is uncertain whether it will achieve and sustain high levels of demand and market adoption. Our future financial performance will depend on growth in this market and on our ability to adapt to emerging demands of our customers. It is difficult to predict the future growth rate and size of our target market. Negative publicity concerning our products or the PDT market as a whole could limit market acceptance of our products. If patients and healthcare providers do not perceive the benefits of PDTs, then our market may not develop at all, or it may develop more slowly than we expect. Our success will depend to a substantial extent on the willingness of healthcare providers to prescribe our products, the extent to which coverage and adequate reimbursement for these products and related treatments will be

 

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available from government health administration authorities, private health insurers and other organizations and our ability to demonstrate the value of our products to existing and potential patients and prescribers. Similarly, negative publicity regarding patient confidentiality and privacy in the context of technology-enabled healthcare or concerns experienced by our competitors could limit market acceptance of PDTs.

The healthcare industry in the United States is undergoing significant structural change and is rapidly evolving. We believe demand for our products has been driven in large part by rapidly growing costs in the traditional healthcare system, the movement toward patient-centricity and personalized healthcare, and advances in technology. Widespread acceptance of personalized healthcare is critical to our future growth and success. A reduction in the growth of personalized healthcare could reduce the demand for our PDTs and result in a lower revenue growth rate or decreased revenue.

If our assumptions regarding these uncertainties are incorrect or change in reaction to changes in our markets, or if we do not manage or address these risks successfully, our results of operations could differ materially from our expectations, and our business could suffer.

The Company’s future depends on the continued contributions of its senior management team and its ability to attract and retain other highly qualified personnel; in particular, Corey McCann, our President and Chief Executive Officer, and Christopher Guiffre, our Chief Financial Officer and Chief Operating Officer, are critical to our future vision and strategic direction.

Our success depends in large part on our ability to attract and retain high-quality management in sales, market access, product development, software engineering, marketing, operations, finance and support functions, especially in the Boston area and the San Francisco Bay area. We compete for qualified technical personnel with other life sciences and information technology companies. Competition for qualified employees is intense in our industry, particularly for software engineers, and the loss of even a few qualified employees, or an inability to attract, train, retain and motivate additional highly skilled employees required for the planned expansion of our business could harm our operating results and impair our ability to grow. The loss of one or more of our key employees, and any failure to have in place and execute an effective succession plan for key executives, could seriously harm our business.

As we continue to grow, we may be unable to continue to attract or retain the personnel we need to maintain our competitive position. To attract, train and retain key personnel, we use various measures, including competitive compensation and benefit packages (including an equity incentive program), which may require significant investment. These measures may not be enough to attract and retain the personnel we require to operate our business effectively and efficiently.

Moreover, if the perceived value of our equity awards declines, it may materially and adversely affect our ability to attract and retain key employees. If we do not maintain the necessary personnel to accomplish our business objectives, we may experience staffing constraints that materially and adversely affect our ability to support our programs and operations.

Many of our employees may receive proceeds from sales of our equity in the public markets, which may reduce their motivation to continue to work for us.

In addition, our future also depends on the continued contributions of our senior management team and other key personnel, each of whom would be difficult to replace. In particular, Corey McCann, our President and Chief Executive Officer, and Christopher Guiffre, our Chief Financial Officer and Chief Operating Officer, are critical to our future vision and strategic direction. We rely on our executive team in the areas of operations, research and development, commercial, and general and administrative functions. Although we have entered into employment agreements or offer letters with our key employees, these agreements have no specific duration and constitute at-will employment, and we do not maintain key person life insurance for some of our key employees.

 

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In addition, from time to time, there may be changes in our senior management team that may be disruptive to our business. If our senior management team, including any new hires that we may make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business, results of operations and financial condition could be harmed.

A limited number of healthcare insurers have agreed to reimburse purchases of the Company’s products, and there is no assurance that additional healthcare insurers will agree to reimburse purchases of the Company’s products in the future.

To date, a limited number of healthcare insurers have agreed to reimburse purchases of reSET, reSET-O and Somryst. We depend upon revenue from sales of reSET, reSET-O and Somryst, and in turn on reimbursement from third-party payors for such products. The amount that we receive in payment for our products may be materially and adversely affected by factors we do not control, including federal or state regulatory or legislative changes, and cost-containment decisions and changes in reimbursement schedules of third-party payors. Any reduction or elimination of these payments could have a material adverse effect on our business, prospects, results of operations and financial condition.

Additionally, the reimbursement process is complex and can involve lengthy delays. Also, third-party payors may reject, in whole or in part, requests for reimbursement based on determinations that certain amounts are not reimbursable under plan coverage, that services provided were not medically necessary, that additional supporting documentation is necessary, or for other reasons. Retroactive adjustments by third-party payors may be difficult or cost-prohibitive to appeal, and such changes could materially reduce the actual amount we receive. Delays and uncertainties in the reimbursement process may be out of our control and may materially and adversely affect our business, prospects, results of operations and financial condition.

The Company’s products are made available via the Apple Store and the Google Play Store and supported by third-party infrastructure. If the Company’s ability to access those markets or access necessary third-party infrastructure was stopped or otherwise restricted or limited, it would materially and adversely affect the Company’s business.

Our PDTs are exclusively accessed through and depend on the Apple App Store and the Google Play Store. Both Apple and Google have broad discretion to make changes to their operating systems or payment services or change the manner in which their mobile operating systems function and their respective terms and conditions applicable to the distribution of our PDTs and to interpret their respective terms and conditions in ways that may limit, eliminate or otherwise interfere with our products, our ability to distribute our products through their stores, our ability to update our products, including to make bug fixes or other feature updates or upgrades, the features we provide, the manner in which we market our products and our ability to access native functionality or other aspects of mobile devices. To the extent either or both of them do so, our business, financial condition and results of operations would be materially and adversely affected.

There is no guarantee that the third-party infrastructure that currently supports our PDTs will continue to support them or, if it does not, that others alternatives will be available. We will continue to be dependent on third-party mobile operating systems, technologies, networks and standards that we do not control, such as the Android and iOS operating systems, and any changes, bugs, technical or regulatory issues in such systems, our current relationships with carriers or future relationships with mobile manufacturers, or in their terms of service or policies that degrade our PDTs’ functionality, reduce or eliminate our ability to distribute our PDTs, limit our ability to deliver high quality PDTs, or impose fees or other charges related to delivering our offerings, could adversely affect our product usage and revenue.

 

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The Company faces competition and new products may emerge that provide different or better alternatives for treatment of the conditions that the Company’s products are authorized to treat. Many of our current and future competitors have or will have significantly more resources.

Our ability to achieve our strategic objectives will depend, among other things, on our ability to develop and commercialize products for the treatment of chronic conditions that are effective and safe, offer distinct features, are easy-to-use, provide measurable and meaningful cost savings to payors, and are more appealing than available alternatives. Our competitors, as well as a number of other companies, within and outside the healthcare industry, are pursuing new delivery devices, delivery technologies, sensing technologies, procedures, drugs, and other therapies for the monitoring and treatment of chronic conditions. Any technological breakthroughs in monitoring, treatment or prevention could reduce the potential market for our products, which would significantly reduce our sales.

The introduction by competitors of products that are or claim to be superior to our products may create market confusion, which may make it difficult for potential customers to differentiate the benefits of our products over competitive products. In addition, the entry of new PDTs to the market which treat the same or similar chronic conditions to our products may lead some of our competitors to employ pricing strategies that could materially and adversely affect the pricing of our products. If a competitor develops a product that competes with or is perceived to be superior to our products, or if a competitor employs strategies that place downward pressure on pricing within our industry, our sales may decline significantly or may not increase in line with our forecasts, either of which would materially and adversely affect our business, financial condition and results of operations.

While our market is in an early stage of development, it is evolving rapidly and becoming increasingly competitive, and we expect it to attract increased competition. We currently face competition from a range of companies. Our competitors include both enterprise companies who are focused on or may enter the healthcare industry, including initiatives and partnerships launched by these large companies, and from private companies that offer solutions for specific chronic conditions. We compete with pharmaceutical and biotechnology companies that are developing treatments for addiction and insomnia, including Alkermes and their product Vivitrol, Orexo and their product Zubsolv, Sandoz and their product Suboxone, Braeburn and their product Brixadi, Pfizer and their product Halcion, Merck and their product Belsomra, Sunovion and their product Lunesta and Sanofi and their product Ambien. In the digital health space we compete with companies that have created non-regulated products to treat addiction and insomnia such as Dynamicare, CBT4CBT and Orexo and their product Modia, and Big Health and their product Sleepio, Pzizz, and Calm. These companies, which may offer their solutions at lower prices, are continuing to develop additional products and becoming more sophisticated and effective. Competition from wellness apps, which are not authorized by the FDA but may attract consumers for other reasons, and from other parties will result in continued pricing pressures, which are likely to lead to price declines in certain product segments, which could negatively impact our sales, profitability and market share. Our ability to compete effectively depends on our ability to distinguish our company and our solution from our competitors and their products, and includes factors such as:

 

   

FDA authorization;

 

   

effectiveness and safety;

 

   

robust and well-controlled clinical research;

 

   

long-term outcomes;

 

   

ease of use and convenience;

 

   

price;

 

   

greater name and brand recognition;

 

   

information security standards;

 

   

greater market penetration;

 

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larger sales forces;

 

   

larger marketing budgets;

 

   

access to significantly greater financial, human, technical and other resources;

 

   

breadth, depth, and effectiveness of offerings;

 

   

FDA compliance, quality, and reliability of solutions; and

 

   

healthcare provider, government agency and insurance carrier acceptance.

Some of our competitors may have, or new competitors or alliances may emerge that have, greater name and brand recognition, greater market share, a larger customer base, more widely adopted proprietary technologies, greater marketing expertise, larger sales forces, or significantly greater resources than we do and may be able to offer solutions competitive with ours at a more attractive price than we can. Further, our current or potential competitors may be acquired by third parties with greater available resources. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements and may have the ability to initiate or withstand substantial price competition. In addition, our competitors may in the future establish cooperative relationships with vendors of complementary products, technologies or services to increase the availability of their solutions in the marketplace. Our competitors could also be better positioned to serve certain segments of our market, which could create additional price pressure. In light of these factors, even if our products are more effective than those of our competitors, current or potential customers may accept competitive products in lieu of purchasing our products. If we are unable to successfully compete, our business, financial condition, and results of operations could be materially and adversely affected.

Acquisitions and strategic alliances could distract management and expose the Company to financial, execution and operational risks that could have a detrimental effect on our business.

We intend to continue to pursue acquisitions or licenses of technology to, among other things, expand the number of products we provide as well as the features within those products. We cannot guarantee that we will identify suitable candidates for acquisition or licensing, that the transactions will be completed on acceptable terms, or that we will be able to integrate newly acquired or licensed technology into our existing business. The acquisition and integration of another technology would divert management attention from other business activities, including our core business. This diversion, together with other difficulties we may incur in integrating newly acquired or licensed technology, could have a material adverse effect on our business, financial condition and results of operations. In addition, we may borrow money or issue capital stock to finance such transactions. Such borrowings might not be available on terms as favorable to us as our current borrowing terms and may increase our leverage, and the issuance of capital stock (or securities exchangeable therefore) could dilute the interests of our stockholders.

We have experienced rapid growth since inception which may not be indicative of our future growth and, if we continue to grow rapidly, we may not be able to manage our growth effectively.

Since launching reSET in 2019, we have experienced rapid growth and we continue to rapidly and significantly expand our operations. For example, our full-time employee headcount has grown from 9 employees as of December 31, 2018 to 173 employees as of December 31, 2020. This expansion increases the complexity of our business and places significant strain on our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions. We may not be able to manage growth effectively, which could damage our reputation, limit our growth, and negatively affect our operating results.

The growth and expansion of our business creates significant challenges for our management, operational and financial resources. In the event of continued growth of our operations or in the number of our third-party

 

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relationships, our information technology systems and our internal controls and procedures may not be adequate to support our operations. To effectively manage our growth, we must continue to improve our operational, financial and management processes and systems and to effectively expand, train and manage our employee base. As our organization continues to grow and we are required to implement more complex organizational management structures, we may find it increasingly difficult to maintain the benefits of our corporate culture, including our ability to quickly develop and launch new and innovative products. This could negatively affect our business performance.

We continue to experience growth in our headcount and operations, which will continue to place significant demands on our management and our operational and financial infrastructure. As we continue to grow, we must effectively integrate, develop and motivate a large number of new employees, and we must maintain the beneficial aspects of our corporate culture. To attract top talent, we have had to offer, and believe we will need to continue to offer, highly competitive compensation packages before we can validate the productivity of those employees. In addition, fluctuations in the price of our common stock may make it more difficult or costly to use equity compensation to motivate, incentivize and retain our employees. We face significant competition for talent from other healthcare, technology and high-growth companies, which include both large enterprises and privately-held companies. We may not be able to hire new employees quickly enough to meet our needs. If we fail to effectively manage our hiring needs and successfully integrate our new hires, our efficiency and ability to meet our forecasts and our employee morale, productivity and retention could suffer, and our business, results of operations and financial condition could be materially and adversely affected.

If we cannot maintain our corporate culture, we could lose the innovation, collaboration and focus on the mission that contribute to our business.

We believe that our culture has been and will continue to be a critical contributor to our success. We expect to continue to hire aggressively as we expand, and we believe our corporate culture has been crucial in our success and our ability to attract highly skilled personnel. If we do not continue to develop our corporate culture or maintain and preserve our core values as we grow and evolve both in the United States and internationally, we may be unable to foster the innovation, curiosity, creativity, focus on execution, teamwork and the facilitation of critical knowledge transfer and knowledge sharing we believe we need to support our growth. Moreover, liquidity available to our employee equityholders following the Business Combination, could lead to disparities of wealth among our employees, which could adversely impact relations among employees and our culture in general. Our anticipated headcount growth and our status as a public company may result in a change to our corporate culture, which could harm our business.

The COVID-19 pandemic has had and continues to have an adverse impact on the Company’s business, operations, and the markets and communities in which it operates.

In March 2020, the World Health Organization declared COVID-19 a global pandemic. This pandemic, which has continued to spread, and the related adverse public health developments, including orders to shelter-in-place, travel restrictions, and mandated business closures, have adversely affected workforces, organizations, governments, customers, economies, and financial markets globally, leading to an economic downturn and increased market volatility. It has also disrupted the normal operations of many businesses, including ours. This outbreak, as well as intensified measures undertaken to contain the spread of COVID-19, could decrease healthcare industry spending for our products, adversely affect demand for our products, affect the ability of our sales team to travel to potential customers and the ability of our professional services teams to conduct in-person services and trainings, impact expected spending from new customers, negatively impact collections of accounts receivable, and harm our business, results of operations, and financial condition.

Further, the sales cycle for a new customer of our products could lengthen, resulting in a potentially longer delay between increasing operating expenses and the generation of corresponding revenue, if any. We cannot predict with any certainty whether and to what degree the disruption caused by the COVID-19 pandemic and

 

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reactions thereto will continue and expect to face difficulty accurately predicting our internal financial forecasts. The pandemic also presents challenges as the majority of our workforce is currently working remotely and shifting to assisting new and existing customers who are also generally working remotely. It is not possible for us to predict the duration or magnitude of the adverse results of the outbreak and its effects on our business, results of operations, or financial condition at this time.

Risks Related to Pear’s Financial Position

Unless the context otherwise requires, for purposes of this section, the terms “we,” “us,” “the Company,” “Pear” or “our company” refer to Pear and its subsidiaries prior to the Business Combination or the Post-Combination Company from and after the Business Combination.

The Company has a history of significant losses, anticipates increasing expenses in the future, and may not be able to achieve or maintain profitability.

We have incurred significant net losses since our inception. We incurred net losses of $52.6 million and $29.9 million for the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021, we had an accumulated deficit of $235.4 million. We expect to incur significant losses and negative cash flow from operations for the foreseeable future as we invest significant additional funds towards developing our pipeline of product candidates, working to achieve and maintain market acceptance by physicians and patients, expanding our marketing channels and operations, growing and enhancing our platform offering of products, and making the necessary investments in our human capital to scale our business. Based on our recurring losses and expectations to incur significant expenses and negative cash flow for the foreseeable future, our independent registered public accounting firm has included an explanatory paragraph in its report on our financial statements as of and for the years ended December 31, 2020 and December 31, 2019 expressing substantial doubt about our ability to continue as a going concern (without giving effect to the anticipated net proceeds from the Business Combination, including the PIPE Transaction and the Forward Purchase).

Further, we will invest in planned clinical trials and future clinical trials. These investments may be more costly than we expect, and if we do not achieve the benefits anticipated from these investments, or if the realization of these benefits is delayed, they may not result in increased revenue or growth in our business. We also expect our operating costs to increase as a result of becoming a public company and will continue to increase as we grow our business. These efforts may prove more expensive than we currently anticipate, and our expenses may exceed revenues for the foreseeable future and we may not achieve profitability.

To date, we have financed our operations principally from the sale of our convertible preferred stock, payments received in connection with collaboration agreements and proceeds from borrowings under a credit facility. Historically the revenue from product sales and collaboration agreements have not covered the full cost of our operations. Our cash flow from operations was negative for the years ended December 31, 2020 and 2019. We may not generate positive cash flow from operations or achieve profitability for the foreseeable future. Our limited operating history may make it difficult for you to evaluate our current business and future prospects. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.

Given our limited operating history, our ability to achieve revenues sufficient to cover our operating costs may not be achieved. If we are not able to scale and grow the business to achieve significant product sales, it would materially and adversely affect our business, financial condition and results of operations. Our failure to achieve or maintain profitability would negatively impact the value of our common stock.

 

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Due to the resources required for the development of the Company’s pipeline, and depending on its ability to access capital, the Company will have to prioritize the development of certain product candidates over others. The Company may fail to expend its limited resources on product candidates that may have been more profitable or for which there is a greater likelihood of success, which would cause the Company’s business, financial condition and results of operations to be materially and adversely affected.

The Company currently has three FDA-authorized or cleared products, reSET, reSET-O and Somryst, as well as several other product candidates that are at various stages of development. The Company seeks to maintain a process of prioritization and resource allocation to maintain an optimal balance between aggressively pursuing its more advanced clinical-stage product candidates and ensuring the development of new product candidates.

Due to the significant resources required for the development of the Company’s product candidates, the Company must decide which product candidates to pursue and advance and the amount of resources to allocate to each. The Company’s decisions concerning the allocation of research, development, collaboration, management and financial resources toward particular product candidates or therapeutic areas may not lead to the development of any viable commercial products and may divert resources away from better opportunities or cause the Company to relinquish valuable rights to such product candidates through collaboration, licensing, or other royalty arrangements in cases in which it would have been advantageous for the Company to invest additional resources to retain sole development and commercialization rights. If the Company makes incorrect determinations regarding the viability or market potential of any of the Company’s product candidates or misreads trends in the healthcare industry, its business, financial condition and results of operations would be materially and adversely affected.

The Company will need substantial additional funding, and if it is unable to raise capital when needed or on terms favorable to the Company, the Company’s business, financial condition and results of operation could be materially and adversely affected.

The Company has consumed substantial amounts of capital to date, and we expect to incur net losses over the next several years as we continue to develop our business, direct market our products and make investments in our human capital in order to scale up our business. The Company expects to continue to spend substantial amounts to continue the development of the Company’s pipeline of product candidates, to complete its currently planned clinical trials and future clinical trials, to achieve and maintain market acceptance by physicians and patients, expand its marketing channels and operations, grow and enhance its platform offering of products, and make the necessary investments in human capital to scale its business. Other unanticipated costs may arise in the course of its development efforts. If the Company is able to gain marketing clearance, authorization, or approval for additional product candidates, the Company will require significant additional amounts of funding in order to launch and commercialize such additional product candidates. The Company cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of any product candidate it develops and may need substantial additional funding after consummation of this transaction to complete the development and commercialization of the Company’s existing and any future product candidates. The Company’s future need for additional funding depends on many factors, including:

 

   

the scope, progress, results and costs of researching and developing its current product candidates, as well as other additional product candidates the Company may develop and pursue in the future;

 

   

the timing of, and the costs involved in, obtaining marketing clearance, authorization, or approvals for the Company’s product candidates and any other additional product candidates the Company may develop and pursue in the future;

 

   

the number of future product candidates that the Company may pursue and their development requirements;

 

   

the costs of commercialization activities for the Company’s product candidates, including the costs and timing of establishing product sales, marketing, and distribution capabilities;

 

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revenue received from commercial sales of the Company’s current products and, subject to receipt of regulatory clearance, authorization, or approval, revenue, if any, received from commercial sales of the Company’s product candidates;

 

   

the extent to which the Company in-licenses or acquires rights to other products, product candidates or technologies;

 

   

the Company’s investment in its human capital required to grow the business and the associated costs as the Company expands its research and development and establishes a commercial infrastructure;

 

   

the costs of preparing, filing and prosecuting patent applications, maintaining and protecting the Company’s intellectual property rights, including enforcing and defending intellectual property-related claims; and

 

   

the costs of operating as a public company.

The Company cannot be certain that additional funding will be available on acceptable terms, or at all. If the Company is unable to raise additional capital in sufficient amounts or on terms acceptable to the Company, the Company may have to significantly delay, reduce or terminate its product development programs or plans for commercialization. Further, if the Company raises additional capital in the form of capital stock (or securities exchangeable therefore), such issuances could dilute the interests of our stockholders.

The Company does not currently have any commitments for future funding beyond the consummation of the Business Combination. The Company believes that following the consummation of the Business Combination (including the consummation of the transactions contemplated by the Subscription Agreements and the Amended Forward Purchase Agreement) and assuming no Public Shares are redeemed, it will be able to fund its operating expenses and capital expenditure requirements into 2024. The Company’s estimate may prove to be wrong, and the Company could use its available capital resources sooner than expected. Further, changing circumstances, some of which are beyond its control, could cause the Company to consume capital significantly faster than anticipated, and the Company may need to seek additional funds sooner than planned. If adequate funds are not available on acceptable terms, we may not be able to successfully execute our business plan or continue our business.

Risks Related to Pear’s Intellectual Property and Technology

Unless the context otherwise requires, for purposes of this section, the terms “we,” “us,” “the Company,” “Pear” or “our company” refer to Pear and its subsidiaries prior to the Business Combination or the Post-Combination Company from and after the Business Combination.

Limitations on the Company’s ability to maintain or obtain patent protection and/or the patent rights relating to the Company’s products and product candidates may limit the Company’s ability to prevent third parties from competing against the Company.

Our success depends, in part, on our ability to obtain and maintain patent protection (including utility patents and design patents) for our products and product features, including back-end architecture and graphical user interfaces. Our success further depends on our ability to obtain copyright registrations for our products’ source code; to obtain and maintain trademark protection for our product names and other key marks; to preserve our trade secrets and know-how; and to operate without infringing the intellectual property rights of others.

We cannot assure investors that we will continue to innovate and file new patent applications, or that if filed any future patent applications will result in granted patents. We cannot assure you that any of our currently pending patent applications will result in issued patents, that any current or future patents will not be challenged, invalidated or circumvented, that the scope of any of our patents will exclude competitors, or that the patent rights granted to us will provide us any competitive advantage or protect our products. The patent position of

 

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PDT companies, including ours, is generally uncertain and involves complex legal and factual considerations and, therefore, validity and enforceability cannot be predicted with certainty. Patents may be challenged, deemed unenforceable, invalidated or circumvented. We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that our proprietary technologies and any future products are covered by valid and enforceable patents and/or copyrights or are effectively maintained as trade secrets.

Any patents we have obtained or do obtain may be challenged in the United States Patent and Trademark Office (“USPTO”) or in federal courts, and may be invalidated or otherwise found unenforceable. Both the patent application process and the process of managing patent disputes can be time-consuming and expensive. If we (either alone or with a patent licensor or co-owner, as the case may require) were to initiate legal proceedings against a third party to enforce a patent related to one of our products, the defendant in such litigation could counterclaim that our (or our licensors’) patent is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace, as are validity challenges by the defendant against the subject patent or other patents before the USPTO. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness or non-enablement, failure to meet the written description requirement, indefiniteness, and/or failure to claim patent-eligible subject matter. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent intentionally withheld material information from the USPTO, or made a misleading statement, during prosecution, or otherwise committed fraud on the USPTO. Additional grounds for an unenforceability assertion include an allegation of misuse or anticompetitive use of patent rights, and an allegation of incorrect inventorship with deceptive intent. Third parties may also raise similar claims before the USPTO even outside the context of litigation. The outcome is unpredictable following legal assertions of invalidity and unenforceability. With respect to the validity question, for example, we cannot be certain that no invalidating prior art existed of which we (or a patent licensor or co-owner) and the patent examiner were unaware during prosecution. These assertions may also be based on information known to us or the USPTO. If a defendant or third party were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the claims of the challenged patent. Such a loss of patent protection would or could have a material adverse impact on our business.

The standards that the USPTO (and foreign equivalents) use to grant patents are not always applied predictably or uniformly and can change. There is also no uniform, worldwide policy regarding the subject matter and scope of claims granted or allowable in utility patents. Accordingly, we do not know the degree of future protection for our proprietary rights or the breadth of claims that will be allowed in any patents issued to us (or to a patent licensor) or to others.

There can be no assurance that our technology will not be found in the future to infringe upon the rights of others or be infringed upon by others. Moreover, patent applications are in some cases maintained in secrecy until patents are issued. The publication of discoveries in the scientific or patent literature frequently occurs substantially later than the date(s) on which the underlying discoveries were made and patent applications were filed. Because patents can take many years to issue, there may be currently pending applications of which we are unaware that may later result in issued patents that our products or product candidates infringe. For example, pending applications may exist that provide support or can be amended to provide support for a claim that results in an issued patent that our products infringe. In such a case, others may assert infringement claims against us, and should we be found to infringe upon their patents or otherwise impermissibly utilize their intellectual property, we might be subject to injunctive relief and/or forced to pay damages, potentially including treble damages, if we are found to have willfully infringed such parties’ patent rights. In addition to any damages we might have to pay, we may be required to obtain licenses from the holders of this intellectual property. We may fail to obtain any of these licenses of intellectual property rights on commercially reasonable terms (and even if we are able to obtain a license, it may be non-exclusive, in which case our competitors would potentially have access to the same technologies licensed to us as non-exclusive licensees). In that event, we may be required to expend significant time and resources to develop or license replacement technology. If we are unable to do so, we may be unable to develop or commercialize the affected products or product candidates, which could

 

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materially harm our business, and the third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation. Conversely, we may not always be able to successfully pursue our claims against others that infringe intellectual property rights in our technology. Thus, the proprietary nature of our technology or technology licensed by us may not provide adequate protection against competitors.

In addition to patents, we rely on copyrights to protect our products’ source code. We also rely on trademarks to differentiate our products from those of others and to protect the recognition of our company and products in the marketplace. We also rely on trade secrets, know-how, and proprietary knowledge that we seek to protect, in part, through confidentiality agreements with employees, consultants and others. We cannot assure you, however, that our proprietary information will not be shared or accessed without authorization, that our confidentiality agreements will not be breached, that we will have adequate remedies for any breach, or that our trade secrets will not otherwise become known to or independently developed by competitors.

Accusations of infringement of third-party intellectual property rights could materially and adversely affect our business.

There has been substantial litigation in the areas in which we operate regarding intellectual property rights, and we may be sued for infringement from time to time in the future. Also, in some instances, we have agreed to indemnify third parties for expenses and liability resulting from claimed intellectual property infringement. From time to time, we may receive requests for indemnification in connection with allegations of intellectual property infringement and we may choose, or be required, to assume the defense and/or reimburse third parties for their expenses, settlement and/or liability. We cannot assure you that we will be able to settle any future claims or, if we are able to settle any such claims, that the settlement will be on terms favorable to us. Our broad range of technology may increase the likelihood that third parties will claim that we infringe their intellectual property rights.

We may in the future receive notices of allegations of infringement, misappropriation or misuse of other parties’ proprietary rights. Furthermore, regardless of their merits, accusations and litigation of this nature may require significant time and expense to defend, may negatively affect customer relationships, may divert management’s attention away from other aspects of our operations and, upon resolution, may have a material adverse effect on our business, results of operations, financial condition, and cash flows.

Certain technology necessary for us to provide our solutions may, in fact, be patented by other parties either now or in the future. If such technology were validly patented by a third party, we may have to negotiate a license for the use of that technology. We may not be able to negotiate such a license at a price that is acceptable to us or at all. The existence of such a patent, or our inability to negotiate a license for any such technology on acceptable terms, could force us to cease using the technology and cease offering products incorporating the technology, which could materially and adversely affect our business and results of operations.

If we, or any of our products, were found to be infringing on the intellectual property rights of any third party, we could be subject to liability for such infringement, which could be material. We could also be prohibited from using or selling certain products, prohibited from using certain processes, or required to redesign certain products, each of which could have a material adverse effect on our business and results of operations.

These and other outcomes may: result in the loss of a substantial number of existing customers or prohibit the acquisition of new customers; cause us to pay license fees for intellectual property we are deemed to have infringed; cause us to incur costs and devote valuable technical resources to redesigning our products; cause our cost of product revenues to increase; cause us to accelerate expenditures to preserve existing revenues; materially and adversely affect our brand in the marketplace and cause a substantial loss of goodwill; cause us to change our business methods or products; and require us to cease certain business operations or offering certain products or features.

 

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Confidentiality and intellectual property assignment agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information.

We depend heavily upon confidentiality agreements with our officers, employees, consultants and subcontractors to maintain the proprietary nature of our technology. These measures may not afford us complete or even sufficient protection, and may not afford an adequate remedy in the event of an unauthorized disclosure of confidential information. If we fail to protect and/or maintain our intellectual property, third parties may be able to compete more effectively against us, we may lose our technological or competitive advantage, and/or we may incur substantial litigation costs in our attempts to recover or restrict use of our intellectual property. In addition, others may independently develop technology similar to ours, otherwise avoiding the confidentiality agreements, or produce patents that would materially and adversely affect our business, prospects, financial condition and results of operations.

The Company is party to and may, in the future, enter into collaborations, in-licensing arrangements, joint ventures, or strategic alliances with third parties that may not result in the development of commercially viable products or the generation of significant or any future revenues.

In the ordinary course of our business, we may enter into collaborations, in-licensing arrangements, joint ventures, or strategic alliances to develop new PDTs and to pursue new markets. Proposing, negotiating, and implementing collaborations, in-licensing arrangements, joint ventures, and strategic alliances may be a lengthy and complex process. Other companies, including those with substantially greater financial, marketing, sales, technology or other business resources, may compete with us for these opportunities or arrangements. We may not identify, secure or complete any such transactions or arrangements in a timely manner, on a cost-effective basis, on acceptable terms, or at all. We have limited institutional knowledge and experience with respect to these business development activities, and we may also not realize the anticipated benefits of any such transaction or arrangement. In particular, these collaborations may not result in the development of products that achieve commercial success or result in significant revenues and could be terminated prior to developing any products.

Additionally, we may not be in a position to exercise sole decision-making authority regarding the transaction or arrangement, which could create the potential risk of creating impasses on decisions, and our collaborators may have economic or business interests or goals that are, or that may become, inconsistent with our business interests or goals. It is possible that conflicts may arise with our collaborators, such as conflicts concerning the achievement of performance milestones, or the interpretation of significant terms under any agreement, such as those related to financial obligations or the ownership or control of intellectual property developed during the collaboration. If any conflicts arise with our current or future collaborators, they may act in their self-interest, which may be adverse to our best interest, and they may breach their obligations to us. In addition, we have limited control over the amount and timing of resources that our current collaborators or any future collaborators devote to our collaborators’ or our future products. Disputes between us and our collaborators may result in litigation or arbitration which would increase our expenses and divert the attention of our management. Further, these transactions and arrangements are contractual in nature and may be terminated or dissolved under the terms of the applicable agreements and, in such event, we may not continue to have rights to the products relating to such transaction or arrangement or may need to purchase such rights at a premium.

The Company in-licenses patents and content from third parties to develop its products and product candidates. If the Company had a dispute with a third-party licensor, it could materially and adversely affect the Company’s ability to commercialize the product or product candidate affected by the dispute.

Licensing intellectual property involves complex legal, business and scientific issues. Disputes may arise between us and our licensors regarding intellectual property subject to a license agreement, including:

 

   

the scope of rights granted under the license agreement and other interpretation-related issues;

 

   

amount of royalty payments under the license agreement;

 

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whether and to what extent our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;

 

   

our right to sublicense patent and other rights to collaborators and other third parties;

 

   

our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our products, and what activities satisfy those diligence obligations; and

 

   

the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our collaborators.

If disputes over licensed intellectual property prevent or impair our ability to maintain the licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product, or the dispute may have an adverse effect on our results of operation.

The Company’s products utilize third-party open source software components, which may pose particular risks to its proprietary software, technologies, products and services in a manner that could negatively affect its business.

We have chosen, and we may choose in the future, to use open source software in our products. We use various software composition tools, including Veracode and Snyk, which are designed to monitor risks related to licenses and vulnerabilities related to open-source software. Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code. Some open source licenses may contain requirements that we make available source code for modifications or derivative works we create based upon the type of open source software we use. If we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of our proprietary software to the public. This would allow our competitors to create similar products with less development effort and time and ultimately could result in a loss of product sales.

Although we intend to monitor any use of open source software to avoid subjecting our products to conditions we do not intend, the terms of many open source licenses have not been interpreted by U.S. courts, and there is a risk that any such licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to commercialize our products. Moreover, there is no assurance that our processes for controlling our use of open source software in our products will be effective. If we are held to have breached the terms of an open source software license, we could be required to seek licenses from third parties to continue offering our products on terms that are not economically feasible, to re-engineer our products, to discontinue the sale of our products if re-engineering could not be accomplished on a timely basis, or to make generally available, in source code form, our proprietary code, any of which could materially and adversely affect our business, operating results and financial condition.

Risks Relating to Pear’s Products

Unless the context otherwise requires, for purposes of this section, the terms “we,” “us,” “the Company,” “Pear” or “our company” refer to Pear and its subsidiaries prior to the Business Combination or the Post-Combination Company from and after the Business Combination.

The Company’s products may cause undesirable side effects or have other properties that could limit their commercial potential.

If we or others identify undesirable side effects directly or indirectly caused by our products, a number of potentially significant negative consequences could result, including:

 

   

regulatory authorities may withdraw clearance, authorization, or approvals of such product;

 

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regulatory authorities may require additional warnings on the product’s label;

 

   

we may be required to issue safety communications to patients or healthcare providers that outline the risks of such side effects;

 

   

we could be sued and held liable for harm caused to patients; and

 

   

our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of the particular product or product candidate and, as a result of negative impacts to our reputation, our other products or product candidates and could significantly harm our business, results of operations and prospects.

If the Company is not able to develop and release new products, or successful enhancements, new features and modifications to the Company’s existing products, the Company’s business, financial condition and results of operations could be materially and adversely affected.

We expect that the PDT market, as with many technology markets, will be characterized by rapid technological change, frequent new product and service introductions and enhancements, changing customer demands, and evolving industry standards. As an initial matter, a significant portion of our market may not have access to smartphones or other technology necessary to utilize our PDTs. In addition, the introduction of products and services embodying new technologies could quickly make existing products and services obsolete and unmarketable. Additionally, changes in laws and regulations could impact the usefulness of our products and could necessitate changes or modifications to our products to accommodate such changes. We invest substantial resources in researching and developing new products and enhancing our existing products by incorporating additional features, improving functionality, and adding other improvements to meet our patients’ evolving needs. The success of any enhancements or improvements to our products or any new products depends on several factors, including regulatory review timelines, timely completion, competitive pricing, adequate quality testing, integration with new and existing technologies in our products and third-party collaborators’ technologies and overall market acceptance. We may not succeed in developing, marketing and delivering on a timely and cost-effective basis enhancements or improvements to our products or any new products that respond to continued changes in market demands or new customer requirements, and any enhancements or improvements to our products or any new products may not achieve market acceptance. Since developing our products is complex, the timetable for the release of new products and enhancements to existing products is difficult to predict, and we may not offer new products and updates as rapidly as our users require or expect. Any new products that we develop or acquire may not be introduced in a timely or cost-effective manner, may contain errors or defects, or may not achieve the broad market acceptance necessary to generate significant or any revenue.

The introduction of new products and products by competitors, the development of entirely new technologies to replace existing offerings or shifts in healthcare benefits trends could make our products obsolete or materially and adversely affect our business, financial condition and results of operations. We may experience difficulties with software development, industry standards, design or marketing that could delay or prevent our development, introduction or implementation of new products, enhancements, additional features or capabilities. If patients and healthcare providers do not widely adopt our products, we may not be able to realize a return on our investment. If we do not accurately anticipate patient demand or we are unable to develop, license or acquire new features and capabilities on a timely and cost-effective basis, or if such enhancements do not achieve market acceptance, it could result in adverse publicity, loss of revenue or market acceptance or claims by patients or healthcare providers brought against us, each of which could have a material and adverse effect on our reputation, business, results of operations and financial condition.

Clinical trials of any of the Company’s products or product candidates may fail to produce results necessary to support regulatory clearance or authorization.

We incur substantial expense for, and devote significant time to, clinical trials but cannot be certain that the trials will ever result in commercial gains. We may experience significant setbacks in clinical trials, even after

 

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earlier clinical trials showed promising results, and failure can occur at any time during the clinical development process. Any of our products may malfunction or may produce undesirable adverse effects that could cause us, institutional review boards (“IRBs”) or regulatory authorities to interrupt, delay or halt clinical trials. We, IRBs, the FDA, or another regulatory authority may suspend or terminate clinical trials at any time to avoid exposing trial participants to unacceptable health risks. Our clinical trials may produce negative or inconclusive results or may demonstrate a lack of effect of our product candidates. Additionally, the FDA may disagree with our interpretation of the data from our pilot studies and clinical trials, or may find the clinical trial design, conduct or results inadequate to demonstrate safety or effectiveness, and may require us to pursue additional clinical trials, which could further delay the clearance or authorization of our product candidates. If we are unable to demonstrate the safety and effectiveness of product candidates in our clinical trials, we will be unable to obtain the regulatory clearances or authorizations we need to commercialize new products.

In addition to the extent that additional information regarding products being studied in clinical trials could translate to currently cleared or authorized products, such as information on new side effects, those results may impact existing clearances and authorizations, and required contraindications, warnings or precautions in product labeling.

Interim, “topline” and preliminary data from clinical trials of the Company’s products or product candidates may change as more patient data becomes available and are subject to confirmation, audit, and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose preliminary or topline data from our pilot studies and clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. We also make assumptions, estimations, calculations, and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the topline or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, topline data should be viewed with caution until the final data are available. From time to time, we may also disclose interim data from our clinical trials. Interim or preliminary data from clinical trials are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment and treatment continues and more patient data become available or as patients from our clinical trials continue other treatments for their disease. Adverse differences between preliminary or interim data and final data could significantly harm our business prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our common stock following the Business Combination.

Further, third parties, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the potential of the particular program, the likelihood of marketing authorization or clearance or commercialization of the particular product candidate, the commercial success of any product for which we may have already obtained authorization or clearance, and our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is derived from information that is typically extensive, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure.

If the interim, topline, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain clearance, authorization, or approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition.

 

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Risks Related to Pear’s Regulatory Compliance and Legal Matters

Unless the context otherwise requires, for purposes of this section, the terms “we,” “us,” “the Company,” “Pear” or “our company” refer to Pear and its subsidiaries prior to the Business Combination or the Post-Combination Company from and after the Business Combination.

We operate in a highly regulated industry and are subject to a wide range of federal, state and local laws, rules and regulations, including FDA regulatory requirements and laws pertaining to fraud and abuse in healthcare, that affect nearly all aspects of our operations. Failure to comply with these laws, rules and regulations, or to obtain and maintain required licenses, could subject the Company to enforcement actions, including substantial civil and criminal penalties, and might require the Company to recall or withdraw a product from the market or cease operations. Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.

We and our products are subject to extensive regulation in the United States, including by the FDA. The regulations to which we are subject are complex. The FDA regulates, among other things, with respect to medical devices: design, development and manufacturing; testing, labeling, content and language of instructions for use; clinical trials; product safety; medical device cybersecurity; pre-market clearance, authorization, and approval; establishment registration and device listing; marketing, sales and distribution; complaint handling; record keeping procedures; advertising and promotion; recalls and field safety corrective actions; post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury; post-market studies; and product import and export. The FDA monitors compliance with these applicable regulatory requirements through periodic unannounced inspections as well as various other channels, such as reviewing post-market surveillance and recall reports, monitoring advertising and promotional practices on-line and at trade shows, and reviewing trade complaints submitted by competitors or other third parties. We do not know whether we will pass any future inspections for FDA compliance, or whether the FDA might identify compliance concern(s) through other channels of information. Failure to comply with applicable regulations could jeopardize our ability to sell our products and result in enforcement-related actions such as: FDA Form 483s; untitled or warning letters; clinical holds on research; fines; injunctions; civil penalties; termination of distribution; recalls or seizures of products; delays in the introduction of products into the market; total or partial suspension of production; refusal to grant future clearances, authorizations, or approvals; withdrawals or suspensions of current clearances or marketing authorizations, resulting in prohibitions on the sale and distribution of our products; and in the most serious cases, criminal penalties. Any of these sanctions could result in higher than anticipated costs or lower than anticipated sales and have a material adverse effect on our reputation, business, financial condition and results of operations.

The FDA and the Federal Trade Commission (“FTC”) also regulate the advertising and promotion of our products to ensure that the claims we make are consistent with our regulatory authorizations, that there is adequate and reasonable data to substantiate the claims and that our promotional labeling and advertising is neither false nor misleading. If the FDA or FTC determines that any of our advertising or promotional claims are false, misleading, not substantiated or not permissible, we may be subject to enforcement actions, including untitled or warning letters, and we may be required to revise our promotional claims and make other corrections or restitutions. We also may be subject to fines, or other regulatory, civil, or criminal sanctions.

Additional federal and state healthcare laws and regulations that may affect our ability to conduct business include, without limitation:

 

   

the federal Anti-Kickback Statute, which prohibits, among other things, any person from knowingly and willfully offering, soliciting, receiving or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs, such as CMS programs;

 

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the federal civil false claims and civil monetary penalties laws, including, without limitation, the federal False Claims Act, which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, false claims, or knowingly using false statements, to obtain payment from the federal government;

 

   

federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

 

   

the federal Civil Monetary Penalties Law prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier;

 

   

the federal Physician Payment Sunshine Act, or Open Payments, created under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act of 2010, or collectively the Affordable Care Act (“ACA”), and its implementing regulations, which requires manufacturers of drugs, medical devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to CMS information related to payments or other transfers of value made to licensed physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

 

   

Health Insurance Portability Administration and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act, and its implementing regulations, which impose certain requirements relating to the privacy, security and transmission of protected health information (“PHI”), on certain healthcare providers, health plans and healthcare clearinghouses, and their business associates that access or otherwise process individually identifiable health information on their behalf; HIPAA also created criminal liability for knowingly and willfully falsifying or concealing a material fact or making a materially false statement in connection with the delivery of or payment for healthcare benefits, items or services;

 

   

medical device regulations pursuant to the federal Food, Drug and Cosmetic Act which require, among other things, pre-market clearance, authorization, or approval; compliant labeling; medical device adverse event reporting; establishment registration and device listing; reporting of corrections and removals; and quality system requirements;

 

   

state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and are in addition to requirements under HIPAA, thus complicating compliance efforts; and

 

   

state laws governing the corporate practice of medicine and other healthcare professions and related fee-splitting laws.

Our employees, consultants and commercial collaborators may engage in misconduct or other improper activities, including non-compliance with such regulatory standards and requirements.

Because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions, it is possible that some of our activities could be subject to challenge under one or more of such laws. Any action brought against us for violations of these laws or regulations, even if successfully defended, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. We may be subject to private “qui tam” actions brought by individual whistleblowers on behalf of the federal or state governments, with potential liability under the federal False Claims Act including mandatory treble damages and significant per-claim penalties.

 

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Although we have adopted policies and procedures designed to comply with these laws and regulations and conduct internal reviews of our compliance with these laws, our compliance is also subject to governmental review. The growth of our business and sales organization including future expansion outside of the United States may increase the potential of violating these laws or our internal policies and procedures. The risk of our being found in violation of these or other laws and regulations is further increased by the fact that many have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Any action brought against us for violation of these or other laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. If our operations are found to be in violation of any of the federal, state and foreign laws described above or any other current or future fraud and abuse or other healthcare laws and regulations that apply to us, we may be subject to penalties, including significant criminal, civil and administrative penalties, damages and fines, disgorgement, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, imprisonment for individuals and exclusion from participation in government programs, such as Medicare and Medicaid, as well as contractual damages and reputational harm. We could also be required to curtail or cease our operations. Any of the foregoing consequences could seriously harm our business, financial condition and results of operations.

The Company will incur significant liability if it is determined that it is promoting any “off-label” uses of its products.

Although our products are marketed for the specific therapeutic uses for which the devices were designed and our personnel are trained not to promote our products for uses outside of the FDA-cleared or authorized indications for use, known as “off-label uses,” we cannot, however, prevent a physician from using our products in ways, when in the physician’s independent professional medical judgment, he or she deems it appropriate. There may be increased risk of harm to patients if primary care physicians attempt to use our products off-label. Furthermore, the use of our products for indications other than those authorized, cleared, or approved by the FDA or authorized by any foreign regulatory body may not effectively treat such conditions, which could harm our reputation in the marketplace among primary care physicians and patients.

If the FDA or any foreign regulatory body determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance or imposition of an untitled letter or warning letter, injunction, seizure, civil fine or criminal penalties. It is also possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as false claims laws, based on our off-label promotion having caused submission of false (non-reimbursable) claims, for any products for which we obtain government reimbursement, if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations. In addition, certain jurisdictions have “all payor” false claims act laws that extend penalties for false claims beyond those submitted to government programs.

In addition, physicians may misuse our products with their patients if they are not adequately trained, potentially leading to injury and an increased risk of product liability. If our products are misused, we may become subject to costly litigation by our patients or their patients. As described above, product liability claims could divert management’s attention from our core business, be expensive to defend and result in sizeable damage awards against us that may not be covered by insurance.

The Company faces potential product liability exposure, and, if claims brought against the Company are successful, the Company could incur substantial liabilities.

Our business exposes us to potential product liability claims that are inherent in the design, manufacture, testing and sale of medical devices. We could become the subject of product liability lawsuits alleging that

 

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component failures, manufacturing flaws, design defects or inadequate disclosure of product-related risks or product-related information resulted in an unsafe condition, injury or death to patients. In addition, the misuse of our products, or the failure of patients to adhere to operating guidelines, could cause significant harm to patients, including death, which could result in product liability claims. Product liability lawsuits and claims, safety alerts or product recalls, with or without merit, could cause us to incur substantial costs, and could place a significant strain on our financial resources, divert the attention of management from our core business, harm our reputation and materially and adversely affect our ability to attract and retain patients, any of which could have a material adverse effect on our business, financial condition and results of operations.

Although we maintain third-party product liability insurance coverage, it is possible that claims against us may exceed the coverage limits of our insurance policies. Even if any product liability loss is covered by an insurance policy, these policies typically have substantial deductibles for which we are responsible. Product liability claims in excess of applicable insurance coverage could have a material adverse effect on our business, financial condition and results of operations. In addition, any product liability claim brought against us, with or without merit, could result in an increase of our product liability insurance premiums. Insurance coverage varies in cost and can be difficult to obtain, and we cannot guarantee that we will be able to obtain insurance coverage in the future on terms acceptable to us or at all.

Additionally, from time to time we may enter into agreements pursuant to which we indemnify third parties for certain claims relating to our products. These indemnification obligations may require us to pay significant sums of money for claims that are covered by these indemnification obligations. We are not currently subject to any product liability claims; however, any future product liability claims against us, regardless of their merit, may result in negative publicity about us that could ultimately harm our reputation and could have a material adverse effect on our business, financial condition and results of operations.

Healthcare reform and other governmental and private payor initiatives may have an adverse effect upon, and could prevent, the Company’s products’ or product candidates’ commercial success.

In the United States and in certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the healthcare system that could impact our ability to sell our products profitably, such as the ACA.

Since its enactment, there have been numerous judicial, administrative, executive, and legislative challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future. For example, various portions of the ACA are currently undergoing legal and constitutional challenges in the United States Supreme Court. Additionally, the former Trump administration issued various Executive Orders which eliminated cost-sharing subsidies and various provisions that would impose a fiscal burden on states or a cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices and Congress has introduced several pieces of legislation aimed at significantly revising or repealing the ACA. Further, on December 20, 2019, the Further Consolidated Appropriations Act (H.R. 1865), which repeals the Cadillac tax, the health insurance provider tax, and the medical device excise tax, was signed into law. It is unclear whether the ACA will be overturned, repealed, replaced, or further amended. We cannot predict what affect further changes to the ACA would have on our business, especially under the Biden administration.

Other legislative changes have been proposed and adopted in the United States since the ACA was enacted. In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year, and, due to subsequent legislative amendments, will remain in effect through 2030 unless additional congressional action is taken. Pursuant to the

 

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Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), as well as subsequent legislation, these reductions were suspended from May 1, 2020 through March 31, 2021 due to the COVID-19 pandemic. Proposed legislation, if passed, would extend this suspension until the end of the pandemic.

There has been increasing legislative and enforcement interest in the United States with respect to prescription-pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. The HHS has already started the process of soliciting feedback on some of these measures and, at the same time, is immediately implementing others under its existing authority. It is unclear what effect such legislative and enforcement interest may have on prescription devices. Further, it is unclear whether the Biden administration will challenge, reverse, revoke or otherwise modify the prior administration’s executive and administrative actions.

We expect that these and other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any cleared, authorized, or approved device, which could have an adverse effect on patients for our products or product candidates. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.

There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels in the United States directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products. Such reforms could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we may obtain regulatory clearance, authorization, or approval and that may affect our overall financial condition and ability to develop product candidates. If we or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our current or any future product candidates we may develop may lose any regulatory clearance, authorization, or approval that may have been obtained and we may not achieve or sustain profitability.

The Company is subject to data privacy and security laws and regulations governing the Company’s collection, use, disclosure, or storage of personally identifiable information, including protected health information and payment card data, which may impose restrictions on the Company and the Company’s operations. Any actual or perceived noncompliance with such laws and regulations may result in penalties, regulatory action, loss of business or unfavorable publicity.

Numerous federal and state laws and regulations govern the collection, use, disclosure, storage and transmission of personally identifiable information (“PII”), including PHI, and information related to treatment for substance use disorders. These laws and regulations, including their interpretation by governmental agencies, are subject to frequent change and could have a negative impact on our business. In addition, in the future, industry requirements or guidance, contractual obligations, and/or legislation at both the federal and the state level may limit, forbid or regulate the use or transmission of health information outside of the United States.

These varying interpretations can create complex compliance issues for us and our partners and potentially expose us to additional expense, adverse publicity and liability, any of which could materially and adversely affect our business.

Federal and state consumer protection laws are increasingly being applied by the FTC and states’ attorneys general to regulate the collection, use, storage and disclosure of PII, through websites or otherwise, and to regulate the presentation of website content.

 

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In addition, other laws, such as the Confidentiality of Substance Use Disorder Patient Records regulations at 42 C.F.R. Part 2, limit the potential use of in substance use disorder treatment-related data in non-treatment-based setting, such as administrative or criminal hearings related to the patient, and include associated restrictions on disclosure of information.

The security measures that we and our third-party vendors and subcontractors have in place to ensure compliance with privacy and data protection laws may not protect our facilities and systems from security breaches, acts of vandalism or theft, computer viruses, misplaced or lost data, programming and human errors or other similar events. Even though we provide for appropriate protections through our agreements with our third-party vendors, we still have limited control over their actions and practices. A breach of privacy or security of PII or PHI may result in an enforcement action, including criminal and civil liability, against us. We are not able to predict the extent of the impact such incidents may have on our business. Enforcement actions against us could be costly and could interrupt regular operations, which may materially and adversely affect our business. While we have not received any notices of violation of the applicable privacy and data protection laws and believe we are in compliance with such laws, there can be no assurance that we will not receive such notices in the future.

There is ongoing concern from privacy advocates, regulators and others regarding data privacy and security issues, and the number of jurisdictions with data privacy and security laws has been increasing. Also, there are ongoing public policy discussions regarding whether the standards for de-identification, anonymization or pseudonymization of health information are sufficient, and the risk of re-identification sufficiently small, to adequately protect patient privacy. We expect there will continue to be new proposed and amended laws, regulations and industry standards concerning privacy, data protection and information security in the United States, such as the California Consumer Privacy Act (“CCPA”), which went into effect on January 1, 2020 and has been amended several times. Further, a new California privacy law, the California Privacy Rights Act (“CPRA”), was passed by California voters on November 3, 2020, and in March 2021, Virginia passed a new privacy law, the Consumer Data Protection Act (“VCDPA”), similar to the CPRA. The CPRA will create additional obligations with respect to processing and storing personal information and the VCDPA is scheduled to take effect on January 1, 2023 (with certain provisions of the CPRA having retroactive effect to January 1, 2022). In addition New York’s Stop Hacks and Improve Electronic Data Security Act (“SHIELD Act”), requires any person or business owning or licensing computerized data that includes the private information of a resident of New York to implement and maintain reasonable safeguards to protect the security, confidentiality and integrity of the private information. Other U.S. states also are considering omnibus privacy legislation and industry organizations regularly adopt and advocate for new standards in these areas. While the CCPA and CPRA contain exceptions for certain activities involving PHI under HIPAA, we cannot yet determine the impact the CCPA, CPRA, VCDPA or other such future laws, regulations and standards may have on our business.

Future laws, regulations, standards, obligations, amendments, and changes in the interpretation of existing laws, regulations, standards and obligations could impair our or our customers’ ability to collect, use or disclose information relating to patients or consumers, including information derived therefrom, which could decrease demand for our products, increase our costs and impair our ability to maintain and grow our customer base and increase our revenue. Accordingly, we may find it necessary or desirable to fundamentally change our business activities and practices or to expend significant resources to modify our software or platform and otherwise adapt to these changes.

Further, our patients may expect us to comply with more stringent privacy and data security requirements than those imposed by laws, regulations or self-regulatory requirements, and we may be obligated contractually to comply with additional or different standards relating to our handling or protection of data.

Any failure or perceived failure by us to comply with federal or state laws or regulations, industry standards or other legal obligations, or any actual or suspected privacy or security incident, whether or not resulting in unauthorized access to, or acquisition, release or transfer of PII or other data, may result in governmental enforcement actions and prosecutions, private litigation, fines and penalties or adverse publicity and could cause

 

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our customers to lose trust in us, which could have an adverse effect on our reputation and business. We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to develop new products could be limited. Any of these developments could harm our business, financial condition and results of operations. Privacy and data security concerns, whether valid or not valid, may inhibit retention of our products by existing customer or adoption of our products by new customers.

Security breaches, ransomware attacks and other disruptions to the Company’s information technology structure could compromise the Company’s information, disrupt its business and expose the Company to significant liability, which would cause the Company’s business and reputation to suffer and we may be unable to maintain and scale the technology underlying our offerings.

In the ordinary course of our business, we collect, store, use and disclose sensitive data, including PHI and other types of PII. We also process and store, and use additional third parties to process and store, sensitive information including intellectual property and other proprietary business information, including that of our patients. Patient information is encrypted but not always de-identified. We manage and maintain our platform and data utilizing a combination of managed data center systems and cloud-based computing center systems.

We are highly dependent on information technology networks and systems, including the internet, to securely process, transmit and store this critical information. Security breaches of this infrastructure, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, and employee or contractor error, negligence or malfeasance, can create system disruptions, shutdowns or unauthorized disclosure or modifications of confidential information, causing member PHI and other PII to be accessed or acquired without authorization or to become publicly available. We utilize third-party service providers for important aspects of the collection, storage and transmission of customer, user and patient information, and other confidential and sensitive information, and therefore rely on third parties to manage functions that have material cybersecurity risks. Because of the sensitivity of the PHI, other PII, and other confidential information we and our service providers collect, store, transmit, and otherwise process, the security of our technology platform and other aspects of our services, including those provided or facilitated by our third-party service providers, are important to our operations and business strategy. We take certain administrative, physical and technological safeguards to address these risks, such as by requiring outsourcing subcontractors who handle customer, user and patient information for us to enter into agreements that contractually obligate those subcontractors to use reasonable efforts to safeguard PHI, other PII, and other sensitive information. Measures taken to protect our systems, those of our subcontractors, or the PHI, other PII, or other sensitive data we or our subcontractors process or maintain, may not adequately protect us from the risks associated with the collection, storage and transmission of such information. Although we take steps to help protect confidential and other sensitive information from unauthorized access or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers or viruses, failures or breaches due to third-party action, employee negligence or error, malfeasance or other disruptions.

A security breach or privacy violation that leads to disclosure or unauthorized use or modification of, or that prevents access to or otherwise impacts the confidentiality, security, or integrity of, member information, including PHI or other PII, or other sensitive information we or our subcontractors maintain or otherwise process, could harm our reputation, compel us to comply with breach notification laws, cause us to incur significant costs for remediation, fines, penalties, notification to individuals and for measures intended to repair or replace systems or technology and to prevent future occurrences, potential increases in insurance premiums, and require us to verify the accuracy of database contents, resulting in increased costs or loss of revenue. If we are unable to prevent such security breaches or privacy violations or implement satisfactory remedial measures, or if it is perceived that we have been unable to do so, our operations could be disrupted, we may be unable to provide access to our platform, and could suffer a loss of customers or users or a decrease in the use of our platform, and we may suffer loss of reputation, adverse impacts on customer, user and investor confidence, financial loss, governmental investigations or other actions, regulatory or contractual penalties, and other claims and liability. In addition, security breaches and other inappropriate access to, or acquisition or processing of, information can be

 

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difficult to detect, and any delay in identifying such incidents or in providing any notification of such incidents may lead to increased harm.

Any such breach or interruption of our systems, or those of any of our third-party information technology partners, could compromise our networks or data security processes and sensitive information could be inaccessible or could be accessed by unauthorized parties, publicly disclosed, lost or stolen. Any such interruption in access, improper access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws and regulations that protect the privacy of member information or other personal information, such as HIPAA, the CCPA, other state data breach laws and regulatory penalties. Unauthorized access, loss or dissemination could also disrupt our operations, including our ability to perform our services, provide member assistance services, conduct research and development activities, collect, process, and prepare company financial information, provide information about our current and future solutions and engage in other user and clinician education and outreach efforts. Any such breach could also result in the compromise of our trade secrets and other proprietary information, which could materially and adversely affect our business and competitive position. While we maintain insurance covering certain security and privacy damages and claim expenses, we may not carry insurance or maintain coverage sufficient to compensate for all liability and in any event, insurance coverage would not address the reputational damage that could result from a security incident.

The Company’s patient service center uses text and voice calls to communicate with healthcare providers, patients and prospective patients, and the Company is subject to various marketing and advertising laws including the Telephone Consumer Protection Act. If the Company fails to comply with applicable laws, including the TCPA, it may be subject to significant liabilities.

Our patient service center uses short message service (“SMS”), text messages and telephone calls to communicate with healthcare providers, patients and prospective patients. The actual or perceived improper sending of text messages or the making of telephone calls may subject us to potential risks, including liabilities or claims relating to consumer protection laws. Numerous class-action suits under federal and state laws have been filed in recent years against companies who conduct SMS texting programs or make unwanted telephone calls, with many resulting in multi-million-dollar settlements to the plaintiffs. Any future such litigation against us could be costly and time-consuming to defend. For example, the Telephone Consumer Protections Act of 1991 (“TCPA”), a federal statute that protects consumers from unwanted telephone calls, faxes, and text messages, restricts telemarketing and the use of automated SMS text messages without proper consent. Additionally, state regulators may determine that telephone calls to our patients are subject to state telemarketing regulations. Federal or state regulatory authorities or private litigants may claim that the notices and disclosures we provide, form of consents we obtain, or our SMS texting practices are not adequate or violate applicable law. This may in the future result in civil claims against us. The scope and interpretation of the laws that are or may be applicable to the delivery of text messages are continuously evolving and developing. If we do not comply with these laws or regulations or if we become liable under these laws or regulations, we could face direct liability, could be required to change some portions of our business model, could face negative publicity, and our business, financial condition, and results of operations could be materially and adversely affected. Even an unsuccessful challenge of our SMS texting or telephone calling practices by our customers, regulatory authorities, or other third parties could result in negative publicity and could require a costly response from and defense by us.

The Company may be subject to governmental investigation, litigation and other proceedings, including intellectual property disputes, which are costly to defend and could materially harm the Company’s business and results of operations.

We may be party to government investigations, lawsuits and legal proceedings in the normal course of business. These matters are often expensive and disruptive to normal business operations. We may face allegations, lawsuits and regulatory inquiries, audits and investigations regarding data privacy, security, labor and employment, consumer protection and intellectual property infringement, including claims related to privacy, patents, publicity, trademarks, copyrights and other rights. A portion of the technologies we use incorporates

 

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open source software, and we may face claims claiming ownership of open source software or patents related to that software, rights to our intellectual property or breach of open source license terms, including a demand to release material portions of our source code or otherwise seeking to enforce the terms of the applicable open source license. We may also face allegations or litigation related to our acquisitions, securities issuances or business practices, including public disclosures about our business. Litigation and regulatory proceedings, and particularly the patent infringement and class action matters we could face, may be protracted and expensive, and the results are difficult to predict. Certain of these matters may include speculative claims for substantial or indeterminate amounts of damages and include claims for injunctive relief. Additionally, our litigation costs could be significant. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our solution or require us to stop offering certain features, all of which could negatively impact our business. We may also become subject to periodic audits, which would likely increase our regulatory compliance costs and may require us to change our business practices, which could negatively impact our results of operations. Managing legal proceedings, litigation and audits, even if we achieve favorable outcomes, is time-consuming and diverts management’s attention from our business.

The results of regulatory proceedings, litigation, claims, and audits cannot be predicted with certainty, and determining reserves for pending litigation and other legal, regulatory and audit matters requires significant judgment. There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our reputation, business, financial condition, results of operations and the market price of our common stock following the Business Combination.

The Company’s commercialization efforts to date have focused almost exclusively on the U.S. The Company’s ability to enter other foreign markets will depend, among other things, on its ability to navigate various regulatory regimes with which it does not have experience, which could delay or prevent the growth of the Company’s operations outside of the U.S.

To date, our commercialization efforts have focused almost exclusively on the United States. Expanding our business to attract customers in countries other than the United States is an element of our long-term business strategy. Our ability to continue to expand our business and to attract talented employees and customers in various international markets will require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, cultures, customs, legal systems, alternative dispute resolution systems, regulatory systems and commercial infrastructures. Entering new international markets will be expensive, our ability to successfully gain market acceptance in any particular market is uncertain and the distraction of our senior management team could harm our business, financial condition and results of operation.

Sales of our products outside of the United States are subject to foreign regulatory requirements that vary widely from country to country. In addition, the FDA regulates exports of medical devices from the United States. While the regulations of some countries may not impose barriers to marketing and selling our products or only require notification, others require that we obtain the marketing authorization of a specified regulatory body. Complying with foreign regulatory requirements, including obtaining registrations or marketing authorizations, can be expensive and time-consuming, and we may not receive regulatory authorizations, clearances or approvals in each country in which we may plan to market our products or we may be unable to do so on a timely basis. The time required to obtain registrations or marketing authorizations, if required by other countries, may be longer than that required for FDA clearance, authorization, or approval, and requirements for such registrations and marketing authorizations may significantly differ from FDA requirements. If we modify our products, we may need to apply for additional regulatory authorizations before we are permitted to sell the modified product. In addition, we may not continue to meet the quality and safety standards required to maintain the authorizations that we have received. If we are unable to maintain our authorizations in a particular country, we will no longer be able to sell the applicable product in that country. Regulatory de novo classification, clearance or approval by

 

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the FDA does not ensure registration or marketing authorization by regulatory authorities in other countries, and registration or marketing authorization by one or more foreign regulatory authorities does not ensure registration or marketing authorization by regulatory authorities in other foreign countries or by the FDA. A failure or delay in obtaining registration or marketing authorization in one country may have a negative effect on the regulatory process in others.

Doing business internationally involves a number of additional risks, including:

 

   

multiple, conflicting and changing laws and regulations such as tax laws, privacy and data protection laws and regulations, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses;

 

   

requirements to maintain data and the processing of that data on servers located within the United States or in such countries;

 

   

protecting and enforcing our intellectual property rights;

 

   

converting our products as well as the accompanying instructional and marketing materials to conform to the language and customs of different countries;

 

   

complexities associated with managing multiple payor reimbursement regimes, and government payors;

 

   

competition from companies with significant market share in our market and with a better understanding of user preferences;

 

   

financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the effect of local and regional financial pressures on demand and payment for our products and services and exposure to foreign currency exchange rate fluctuations;

 

   

natural disasters, political and economic instability, including wars, terrorism, political unrest, outbreak of disease (including the recent coronavirus outbreak), boycotts, curtailment of trade, and other market restrictions; and

 

   

regulatory and compliance risks that relate to maintaining accurate information and control over activities subject to regulation under the U.S. Foreign Corrupt Practices Act (the “FCPA”), and comparable laws and regulations in other countries.

These risks and uncertainties may impact the Company’s ability to enter foreign markets, which could delay or prevent the growth of the Company’s operations outside of the United States, and have a material adverse effect on our business, prospects, results of operations and financial condition.

The regulatory framework for digital health products is constantly evolving. Increasingly stringent regulatory requirements could create barriers to the Company’s development and introduction of new products. Conversely, in the event that regulatory requirements are lowered, competitors could potentially enter the prescription digital therapeutic market and compete against the Company more easily. Either of the foregoing could materially harm the Company’s business.

Our PDTs are novel and represent a new category of therapeutics for which the regulatory framework continues to evolve. Our ability to develop and introduce new products will depend, in part, on our ability to comply with these complex requirements, which include regulations related to product design, development and manufacturing; testing, labeling, content and language of instructions for use; clinical trials; product safety; pre market clearance, authorization, and approval; establishment registration and device listing; and marketing, sales and distribution. If, however, the regulatory framework for digital health products simplifies and the requirements that we and others are required to comply with are lowered, it could result in the increased competition and the introduction by competitors of products that are or claim to be superior to our products. For

 

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example, due to the COVID-19 public health emergency, the FDA issued, “Enforcement Policy for Digital Health Devices For Treating Psychiatric Disorders During the Coronavirus Disease 2019 (COVID-19) Public Health Emergency,” which allows for marketing of certain digital therapeutics without premarket clearance, authorization, or approval so long as certain criteria are met. Similarly, competitors using our products as predicates for 510(k)s may successfully argue that they should be required to submit substantially less data to support approval of their product than was required for our products based on FDA’s growing familiarity with the technology. As a result, we are subject to risks related to the developing regulatory landscape applicable to our PDTs that could have a material adverse effect on our business and results of operations.

The Company’s products may face competition from digital health products that are marketed without regulatory clearance, authorization, or approval. Regulators have broad discretion in determining whether to enforce regulatory requirements, and may decide not to remove uncleared or unapproved products that compete with the Company’s products, which could materially and adversely impact the Company’s business.

Our PDTs, reSET, reSET-O and Somryst have been authorized or cleared by the FDA after completion of clinical trials and related regulatory review. The FDA and other regulators have broad discretion in determining whether to enforce these requirements, however, which could result in uncleared or unapproved products entering the marketplace. If uncleared or unapproved products are allowed to compete with our products, we will face increased competition from parties who have fewer barriers to enter our industry. This increased competition could have a material, adverse effect on our business, results of operations and financial condition.

Premarket clearances, authorizations, and approvals for new or significantly modified devices could be denied or significantly delayed.

Under FDA regulations, unless exempt, a new medical device may only be commercially distributed after it has received 510(k) clearance, is authorized through the de novo classification process, or is the subject of a premarket approval (“PMA”). The FDA will clear marketing of a medical device through the 510(k) process if it is demonstrated that the new product is substantially equivalent to another legally marketed product not subject to a PMA. Sometimes, premarket submissions must be supported by clinical data. Our ability to enroll patients in clinical trials could be impacted by the COVID-19 outbreak, as many patients are electing or being asked to delay procedures at this time. The PMA process typically is more costly, lengthy and stringent than the 510(k) process and usually requires more substantial clinical studies.

The FDA may not authorize marketing via de novo classification or clear our 510(k) applications on a timely basis or at all. For example, the COVID-19 outbreak could affect the FDA’s ability to review applications or supplements. Such delays or refusals, regardless of the cause, could have a material adverse effect on our business, financial condition, and results of operations. The FDA may also change its clearance and authorization policies, adopt additional regulations or revise existing regulations, or take other actions which may prevent or delay authorization or clearance of our products.

Material modifications to our devices may require new 510(k) clearance, de novo classification, PMA approval, or PMA supplement approval, or may require us to cease marketing or recall the modified devices until clearances, authorizations, or approvals are obtained.

Material modifications to the intended use or technological characteristics of our devices may require new 510(k) clearance, de novo classification, PMA approval, or PMA supplement approval, or may require us to cease marketing or recall the modified devices until clearances, authorizations, or approvals are obtained. Any modification to a 510(k)-cleared device that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, design, or manufacture, requires a new 510(k) clearance or, possibly, a de novo or a PMA. The FDA requires every manufacturer to make and document this determination in the first instance. A manufacturer may determine that a modification could not significantly affect safety or effectiveness and does not represent a major change in its intended use, so that no new 510(k) clearance is

 

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necessary. The FDA may review any manufacturer’s decision and may not agree with our decisions regarding whether new clearances, authorization, or approvals are necessary. The FDA may also on its own initiative determine that a new clearance, authorization, or approval is required.

We have modified some of our cleared and authorized devices and have determined based on our review and interpretation of the applicable FDA guidance that in certain instances new 510(k) clearances are not required. If the FDA disagrees with our determination and requires us to submit new 510(k) clearances for modifications to our previously cleared or authorized products for which we have concluded that new clearances are unnecessary, we may be required to cease marketing or to recall the modified product until we obtain clearance, authorization, or approval. In these circumstances, we may be subject to significant enforcement actions, regulatory fines, or penalties, which could require us to redesign our products and harm our operating results.

Products may be subject to product recalls. A recall of our products, either voluntarily or at the direction of the FDA or another governmental authority, or the discovery of serious safety issues with our products, could materially and adversely affect us.

The FDA and similar foreign governmental authorities have the authority to require the recall of commercialized products in the event of material deficiencies or defects in their design or manufacture or in the event that a product poses an unacceptable risk to health.

The FDA’s authority to require a recall for medical devices must be based on a finding that there is reasonable probability that the device would cause serious injury or death. We may also decide to voluntarily recall our products. A government-mandated or voluntary recall could occur as a result of an unacceptable risk to health, component failures, malfunctions, manufacturing errors, design or labeling defects or other deficiencies and issues. On March 20, 2021, we initiated a voluntary correction of reSET and reSET-O due to a software defect related to contingency management. This recall was reportable to the FDA and is in-process. Recalls of any of our products would divert managerial and financial resources and could materially and adversely affect our reputation and business, which could impair our ability to produce our products in a cost-effective and timely manner in order to meet our customers’ demands. We may also be subject to liability claims, be required to bear other costs, or take other actions that could materially and adversely affect our business, results of operations and financial condition.

Companies are required to maintain certain records of recalls and corrections, even if they are not reportable to the FDA. We may initiate voluntary recalls or corrections for our products in the future that we determine do not require notification of the FDA. If the FDA disagrees with our determinations, they could require us to report those actions as recalls and we may be subject to enforcement action.

We are required to report certain malfunctions, deaths, and serious injuries associated with our products, which can result in voluntary corrective actions or agency enforcement actions.

Under the FDA’s medical device reporting regulations, we are required to report to the FDA when information from any source suggests that our product may have caused or contributed to a death or serious injury or that our product has malfunctioned and, if the malfunction were to recur, would likely cause or contribute to death or serious injury. We have not been required to make any such reports to date. If we fail to report these events to the FDA within the required timeframes, or at all, the FDA could take enforcement action against us.

Any adverse event involving our products, whether in the United States or abroad, could result in future voluntary corrective actions, such as recalls, including corrections or customer notifications, or agency action, such as inspection or enforcement actions. If malfunctions do occur, we may be unable to correct the malfunctions adequately or prevent further malfunctions, in which case we may need to cease manufacture and

 

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distribution of the affected products, initiate voluntary recalls, and redesign the products. Regulatory authorities may also take actions against us, such as ordering recalls, imposing fines, or seizing the affected products. Any corrective action, whether voluntary or involuntary, will require the dedication of our time and capital, distract management from operating our business, and may harm our reputation and financial results.

If we fail to comply with the FDA’s Quality System Regulation (“QSR”), or any applicable foreign equivalent, our operations could be interrupted, and our potential product sales and operating results could suffer.

We are required to comply with the FDA’s QSR, which delineates, among other things, the design controls, document controls, purchasing controls, identification and traceability, production and process controls, acceptance activities, nonconforming product requirements, corrective and preventive action requirements, labeling and packaging controls, handling, storage, distribution and installation requirements, complaint handling, records requirements, servicing requirements, and statistical techniques potentially applicable to the production of our medical devices. We are also subject to the regulations of foreign jurisdictions if we market products overseas.

The FDA enforces the QSR through periodic and announced or unannounced inspections of manufacturing facilities. Our facilities have been inspected by the FDA and other regulatory authorities, and we anticipate that we will be subject to additional future inspections. If our facilities or processes are found to be in non-compliance or fail to take satisfactory corrective action in response to adverse QSR inspectional findings, the FDA could take legal or regulatory enforcement actions against us and/or our products, including but not limited to the cessation of sales or the initiation of a recall of distributed products, which could impair our ability to produce our products in a cost-effective and timely manner in order to meet our customers’ demands. We may also be required to bear other costs or take other actions that may have a negative impact on our future sales and our ability to generate profits.

The FDA’s and other comparable non-U.S. regulatory agencies’ statutes, regulations, policies or interpretations may change, and additional government regulation or statutes may be enacted, which could increase regulatory requirements, or delay, suspend, prevent marketing of any cleared, authorized, or approved products or necessitate the recall of distributed products. We cannot predict the likelihood, nature or extent of adverse governmental regulation that might arise from future legislative or administrative action, either in the United States or abroad.

The medical device industry has been under heightened FDA scrutiny as the subject of government investigations and enforcement actions. If our operations and activities are found to be in violation of any FDA laws or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines and other legal and/or agency enforcement actions. Any penalties, damages, fines, or curtailment or restructuring of our operations or activities could materially and adversely affect our ability to operate our business and our financial results. The risk of us being found in violation of FDA laws is increased by the fact that many of these laws are broad and their provisions are open to a variety of interpretations. Any action against us for violation of these laws, even if we successfully defend ourselves against that action and its underlying allegations, could cause us to incur significant legal expenses and divert management’s attention from the operation of our business. Where there is a dispute with a federal or state governmental agency that cannot be resolved to the mutual satisfaction of all relevant parties, we may determine that the costs, both real and contingent, are not justified by the commercial returns to us from maintaining the dispute or the product.

Various claims, design features, or performance characteristics of our medical devices that we regarded as permitted by the FDA without new marketing clearance, authorization, or approval may be challenged by the FDA or state or foreign regulators. The FDA or state or foreign regulatory authorities may find that certain claims, design features, or performance characteristics, in order to be made or included in the products, may have to be supported by further clinical studies and marketing clearances, authorizations, or approvals, which could be lengthy, costly, and possibly unobtainable.

 

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Risks Related to Pear’s Financial Reporting

Unless the context otherwise requires, for purposes of this section, the terms “we,” “us,” “the Company,” “Pear” or “our company” refer to Pear and its subsidiaries prior to the Business Combination or the Post-Combination Company from and after the Business Combination.

We rely on assumptions, estimates, and business data to calculate our key performance indicators and other business metrics, and real or perceived inaccuracies in these metrics may harm our reputation and negatively affect our business.

Certain of our performance indicators and other business metrics are calculated using third-party applications or internal company data that have not been independently verified. While these numbers are based on what we believe to be reasonable calculations for the applicable period of measurement, there are inherent challenges in measuring such information. In addition, our measurement of certain metrics may differ from estimates published by third parties or from similarly-titled metrics of our competitors due to differences in methodology and as a result our results may not be comparable to our competitors.

Our results of operations and financial condition are subject to management’s accounting judgments and estimates, as well as changes in accounting policies.

The preparation of our financial statements requires us to make estimates and assumptions affecting the reported amounts of the Company’s assets, liabilities, revenues, expenses and earnings. If these estimates or assumptions are incorrect, it could have a material adverse effect on our results of operations or financial condition. We have identified several accounting policies as being critical to the fair presentation of our financial condition and results of operations because they involve major aspects of our business and require us to make judgments about matters that are inherently uncertain. These policies are described under the section entitled “Pear’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and should be considered in conjunction with our audited consolidated financial statements and notes thereto included elsewhere in this proxy statement/prospectus. The implementation of new accounting requirements or other changes to Generally Accepted Accounting Principles, or GAAP, could have a material adverse effect on our reported results of operations and financial condition.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, investors may lose confidence in the accuracy of our financial reports, which would harm our business and the trading price of our common stock. Our management will be required to evaluate the effectiveness of our internal control over financial reporting.

As a public reporting company, we will become subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations established by the SEC and Nasdaq. These rules and regulations will require, among other things, that we establish and periodically evaluate procedures with respect to our internal control over financial reporting. Reporting obligations as a public company are likely to place a considerable strain on our financial and management systems, processes and controls, as well as on our personnel, including senior management. In addition, as a public company, we will be required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal control over financial reporting. Management’s initial certification under Section 404 of the Sarbanes-Oxley Act will be required with our annual report on Form 10-K for the year ending December 31, 2022.

In support of such certifications, we will be required to document and make significant changes and enhancements, including potentially hiring additional personnel, to our internal control over financial reporting. Likewise, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting until our first annual report is required to be filed with the SEC following the date we are no longer an emerging growth company.

 

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To achieve compliance with Section 404 within the prescribed period, we will need to continue to dedicate internal resources, including hiring additional financial and accounting personnel and potentially engaging outside consultants. During our evaluation of our internal control, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective.

We have identified gaps in our internal control environment in the past and cannot provide assurances that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are unable to conclude that our internal control over financial reporting is effective or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of shares of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

Our management has identified certain internal control deficiencies that constitute material weaknesses. If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

We have identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. If we are unable to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, our stock price.

As of December 31, 2020 and June 30, 2021, we did not maintain an effective control environment as we did not maintain a sufficient complement of accounting and financial reporting resources commensurate with our financial reporting requirements. This resulted in the following material weaknesses:

 

   

We did not have sufficient accounting and reporting resources to ensure adequate segregation of duties.

 

   

We did not design, implement and maintain adequate information systems controls, including access and change management controls.

 

   

We did not design, implement and maintain controls to ensure the accurate and timely reporting of material transactions, including the capitalization of software costs and capital stock valuations performed by us or our advisors.

These control deficiencies could result in a misstatement in our accounts or disclosures that would result in a material misstatement to our financial statements that would not be prevented or detected. Accordingly, we determined that these control deficiencies constitute material weaknesses.

We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. For example, we have taken steps to hire additional personnel in our

 

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finance group, including a Corporate Controller, and are in the process of implementing a new enterprise resource planning system to replace the existing general ledger package. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting also could materially and adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC.

Some members of our management team have limited experience in operating a public company.

Some of our executive officers have limited experience in the management of a publicly traded company. Our management team may not successfully or effectively manage our transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Certain executives’ limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage as they will likely need to devote an increasing amount of their time to these activities, resulting in less time being devoted to the management and growth of our Company. We may not have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices or internal controls over financial reporting required of public companies.

We will incur increased costs as a result of operating as a public company, and our management will devote substantial time to new compliance initiatives.

Compliance with public company requirements will increase costs and make certain activities more time-consuming. Increased costs will include legal, accounting, insurance, administrative and other costs and expenses associated with being a public company that we did not incur as a private company. The increased costs will also include expenses associated with compliance with reporting requirements, including those to comply with the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations promulgated by the SEC and Nasdaq, and could require us to expand our employee base and hire additional employees to support our operations as a public company, which will increase our operating costs in future periods. Furthermore, if any issues in complying with these requirements are identified, we could incur additional costs rectifying those or new issues. These increased costs will require us to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic objectives.

A number of those requirements will require us to carry out activities we have not done previously. For example, we will create new board committees and plan to adopt new internal controls and disclosure controls and procedures. Risks associated with our status as a public company may make it more difficult to attract and retain qualified persons to serve on our board of directors or as executive officers. Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

We could be subject to additional tax liabilities and our ability to use our net operating loss carryforwards and other tax attributes may be limited.

The Company has incurred net operating losses (“NOLs”) since its inception and may never achieve or sustain profitability. Generally, for U.S. federal income tax purposes, NOLs incurred will carry forward. However, NOL carryforwards generated prior to January 1, 2018, are subject to expiration for U.S. federal income tax purposes. As of December 31, 2020, we had federal NOL carryforwards of approximately $124.3 million, of which $0.6 million will begin to expire in 2034. As of December 31, 2020, we also had research and development tax credits of $4.4 million, which may be available to offset future income tax liabilities. The research and development tax credit carryforwards would begin to expire in 2033. The state research and development tax credit carryforwards are not subject to expiration.

 

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In general, under Sections 382 and 383 of the Code, a corporation that undergoes an “ownership change,” generally defined as a greater than 50% change by value in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-ownership change NOLs, carryforwards and other pre-ownership change tax attributes, such as research tax credits, to offset its post-ownership change income or taxes may be limited. Similar provisions of state tax law may also apply to limit the use of our state NOL carryforwards and other state tax attributes. We have not performed an analysis to determine whether our past issuances of stock and other changes in our stock ownership may have resulted in one or more ownership changes. In addition, future changes in our stock ownership, including with respect to the proposed Business Combination, which may be outside of our control, may materially limit our ability to utilize our NOL carryforwards and other tax attributes. As a result, even if we earn net taxable income in the future, we may be unable to use a material portion of our NOL carryforwards and other tax attributes, which could materially and adversely affect our future cash flows. There is also a risk that regulatory changes, such as suspensions on the use of NOL or other unforeseen reasons, may result in our existing NOL carryforwards expiring or otherwise becoming unavailable to offset future taxable income. For these reasons, we may not be able to utilize a material portion of our NOL carryforwards and other tax attributes, even if we attain profitability. A temporary suspension of the use of certain net operating losses and tax credits has been enacted in California, and other states may enact suspensions as well. If we are limited in our ability to use our NOLs in future years in which we have taxable income, we will pay more taxes than if we were able to fully utilize our NOLs. This could materially and adversely affect our results of operations.

We rely on assumptions, estimates, internally developed software and data from third parties to deliver timely and accurate information in order to accurately report our financial results in the timeframe and manner required by law.

We need to receive timely, accurate and complete information from our internal company data utilizing internally developed software that have not been independently verified and several third parties in order to accurately report our financial results on a timely basis. If the information that we receive is not accurate, our consolidated financial statements may be materially incorrect and may require restatement. While these numbers are based on what we believe to be reasonable calculations for the applicable period of measurement, there are inherent challenges in measuring such information. As a result, we may have difficulty completing accurate and timely financial disclosures, which could have an adverse effect on our business.

Risks Related to the Business Combination

The consummation of the Business Combination is subject to a number of conditions and if those conditions are not satisfied or waived, the Business Combination Agreement may be terminated in accordance with its terms and the Business Combination may not be completed.

The consummation of the Business Combination is subject to the satisfaction or waiver of a number of conditions, including, among other customary conditions: (i) the approval by Pear’s stockholders of the Business Combination Agreement and the Business Combination; (ii) the applicable waiting period (and any extension thereof) under the HSR Act relating to the consummation of the transactions contemplated by the Business Combination Agreement having expired or been terminated; (iii) THMA having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) immediately after giving effect to the Business Combination; (iv) the absence of orders prohibiting the consummation of the Business Combination; (v) the effectiveness of the registration statement of which this proxy statement/prospectus is a part; (vi) approval of THMA’s stockholders of the Business Combination Proposal, the Charter Approval Proposal, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal; (vii) the absence of a Pear Material Adverse Effect (as defined in “The Business Combination Agreement” below); (viii) the Closing THMA Cash (as defined in “The Business Combination Agreement” below) is at least $200,000,000 and (ix) the approval for listing on Nasdaq of the THMA Class A Common Shares to be issued pursuant to the Business Combination. The consummation of the

 

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Business Combination is not assured and is subject to risks, including the risk that approval of the Business Combination by THMA stockholders is not obtained or that other conditions to the consummation of the Business Combination are not satisfied or waived. The conditions to THMA’s obligation to consummate the Business Combination may be waived by THMA and the conditions to Pear’s obligation to consummate the Business Combination may be waived by Pear; however, neither THMA nor Pear is required to waive any Closing conditions. If THMA does not consummate the Business Combination, it could be subject to several risks, including:

 

   

the parties may be liable for damages to one another under the terms and conditions of the Business Combination Agreement;

 

   

negative reactions from the financial markets, including declines in the price of THMA securities due to the fact that current prices may reflect a market assumption that the Business Combination will be completed; and

 

   

the attention of THMA’s management will have been diverted to the Business Combination rather than the pursuit of other opportunities in respect of an initial business combination.

For more information about the conditions to the consummation of the Business Combination, see “The Business Combination Agreement—Conditions to Closing.

If the Business Combination benefits do not meet the expectations of investors or securities analysts, the market price of the Post-Combination Company’s securities may decline.

If the expectations of investors or securities analysts of the perceived benefits of the Business Combination change prior to the Closing, the market price of THMA’s securities prior to the Closing may decline. The market values of THMA’s securities at the time of the Business Combination may vary significantly from their prices on the date the Business Combination Agreement was executed, the date of this proxy statement/prospectus, or the date on which THMA’s stockholders vote on the Proposals.

In addition, following the Business Combination, fluctuations in the price of the Post-Combination Company’s securities could contribute to the loss of all or part of your investment. Prior to the Business Combination, there has not been a public market for Pear’s capital stock. Accordingly, the valuation THMA has ascribed to Pear in the Business Combination may not be indicative of the price that will be implied in the trading market for the Post-Combination Company’s securities following the Business Combination. If an active market for the Post-Combination Company’s securities develops and continues after the Business Combination, the trading price of such securities could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond the Post-Combination Company’s control. Any of the factors listed below could have a material adverse effect on your investment in the Post-Combination Company’s securities and the Post-Combination Company’s securities may trade at prices significantly below the price you paid for them or that were implied by the conversion of the Company’s capital stock as a result of the Business Combination. In such circumstances, the trading price of the Post-Combination Company’s securities may not recover and may experience a further decline.

Factors affecting the trading price of the Post-Combination Company’s securities may include:

 

   

actual or anticipated fluctuations in the Post-Combination Company’s quarterly financial results or the quarterly financial results of companies perceived to be similar to it;

 

   

changes in the market’s expectations about the Post-Combination Company’s operating results;

 

   

success or entry of competitors;

 

   

the Post-Combination Company’s operating results failing to meet the expectation of securities analysts or investors in a particular period;

 

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changes in financial estimates and recommendations by securities analysts concerning the Post-Combination Company or the PDT industry in general;

 

   

operating and share price performance of other companies that investors deem comparable to the Post-Combination Company;

 

   

the Post-Combination Company’s ability to bring its products and technologies to market on a timely basis, or at all;

 

   

changes in laws and regulations affecting the Post-Combination Company’s business;

 

   

the Post-Combination Company’s ability to meet compliance requirements;

 

   

commencement of, or involvement in, litigation involving the Post-Combination Company;

 

   

changes in the Post-Combination Company’s capital structure, such as future issuances of securities or the incurrence of additional debt;

 

   

the volume of the Post-Combination Company’s shares of common stock available for public sale;

 

   

any major change in the Post-Combination Company’s board of directors or management;

 

   

sales of substantial amounts of the Post-Combination Company’s shares of common stock by its directors, executive officers or significant stockholders or the perception that such sales could occur;

 

   

general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations, and acts of war or terrorism, inflation and market liquidity; and

 

   

the other risk factors set forth in the “Risks Related to Pear’s Business and Industry,” “Risks Related to Pear’s Financial Position,” “Risks Related to Pear’s Intellectual Property and Technology,” “Risks Related to Pear’s Products,” “Risks Related to Pear’s Regulatory Compliance and Legal Matters” and “Risks Related to Pear’s Financial Reporting.”

Broad market and industry factors may materially harm the market price of the Post-Combination Company’s securities irrespective of its operating performance. The stock market in general has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of the Post-Combination Company’s securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to the Post-Combination Company could depress the Post-Combination Company’s share price regardless of its business, prospects, financial conditions or results of operations. A decline in the market price of the Post-Combination Company’s securities also could adversely affect its ability to issue additional securities and its ability to obtain additional financing in the future.

There can be no assurance that the Post-Combination Company’s common stock will be approved for listing on the Nasdaq or that the Post-Combination Company will be able to comply with the continued listing standards of the Nasdaq.

In connection with the closing of the Business Combination, we intend to list the Post-Combination Company’s common stock and public warrants on the Nasdaq under the symbols “PEAR” and “PEAR.W,” respectively. The Post-Combination Company’s continued eligibility for listing may depend on the number of shares that are exchanged in the Business Combination. If, after the Business Combination, the Nasdaq delists the Post-Combination Company’s securities from trading on its exchange for failure to meet the listing standards, the Post-Combination Company and its stockholders could face significant material adverse consequences including:

 

   

a limited availability of market quotations for the Post-Combination Company’s securities;

 

   

reduced liquidity for the Post-Combination Company’s securities;

 

   

a determination that the Post-Combination Company’s common stock is a “penny stock” which will require brokers trading in the Post-Combination Company’s common stock to adhere to more stringent

 

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rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of the Post-Combination Company’s common stock;

 

   

a limited amount of analyst coverage; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

Potential legal proceedings in connection with the Business Combination, the outcomes of which are uncertain, could delay or prevent the completion of the Business Combination.

In connection with the Business Combination, it is not uncommon for lawsuits to be filed against the companies involved and/or their respective directors and officers alleging, among other things, that the proxy statement/prospectus contains false and misleading statements and/or omits material information concerning the Business Combination and generally seeking, among other things, injunctive relief and an award of attorneys’ fees and expenses. Although no such lawsuits have yet been filed in connection with the Business Combination or the other transactions contemplated by the Business Combination Agreement, it is possible that such actions may arise. Defending against such lawsuits could require THMA and Pear to incur significant costs and draw the attention of their respective management teams away from the Business Combination. Further, the defense or settlement of any lawsuit or claim that remains unresolved at the time the Business Combination is consummated may adversely affect the Post-Combination Company’s business, financial condition, results of operations and cash flows. Such legal proceedings could also delay or prevent the consummation of the Business Combination.

If THMA’s due diligence investigation of Pear’s business was inadequate and material risks are not uncovered, stockholders of THMA following the Business Combination could lose some or all of their investment.

Even though THMA conducted a due diligence investigation of Pear, it cannot assure its stockholders that this diligence uncovered all material issues that may be present in Pear or its business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the Company and its business and outside of its control will not later arise. As a result, the Post-Combination Company may be forced to later write-down or write-off assets, restructure its operations or incur impairment or other charges that could result in losses. Even if THMA’s due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and may not have an immediate impact on the Post-Combination Company’s liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about the Post-Combination Company following the Closing or its securities. In addition, charges of this nature may cause the Post-Combination Company to be unable to obtain future financing on favorable terms or at all. Accordingly, any stockholders who choose to remain stockholders of the Post-Combination Company following the Business Combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.

THMA stockholders may not have the same benefits as stockholders in an underwritten public offering.

The Business Combination and the transactions described in this proxy statement/prospectus are not an underwritten initial public offering of Pear’s securities and differ from an underwritten initial public offering in several significant ways, which include, but are not limited to, the following:

Like other business combination transactions and spin-offs, in connection with the Business Combination, you will not receive the benefits of the diligence that would be performed by the underwriters and their advisors in an underwritten public offering. Investors in an underwritten public offering may benefit from the role of the underwriters in such an offering. In an underwritten public offering, an issuer initially sells its securities to the public market via one or more underwriters, who distribute or resell such securities to the public. Underwriters have liability under the U.S. securities laws for material misstatements or omissions in a registration statement pursuant to which an issuer sells securities.

 

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Because the underwriters have a defense to any such liability by, among other things, conducting a reasonable investigation, the underwriters and their counsel conduct a “due diligence” investigation of the issuer and the statements made or incorporated in the prospectus. Due diligence entails engaging legal, financial and/or other experts to perform an investigation as to the accuracy of an issuer’s disclosure regarding, among other things, its business and financial results. The independent registered public accounting firm of the issuer also will deliver a “comfort” letter with respect to the financial information contained in the registration statement. Additionally, negative assurance letters from counsel with respect to the accuracy of the disclosure are customarily provided. In making their investment decision, investors in underwritten public offerings have the benefit of such diligence.

In contrast, THMA and Pear each have engaged a financial advisor (rather than underwriters) in connection with the Business Combination. The role of a financial advisor typically differs from that of an underwriter. For example, financial advisors do not act as intermediaries in the public sale of securities and therefore do not face the same potential liability under the U.S. securities laws as underwriters. As a result, financial advisors typically do not undertake the same level of, or any, due diligence investigation of the issuer as is typically undertaken by underwriters.

In connection with this proxy statement/prospectus, no parties other than THMA and Pear have conducted an investigation of the disclosure contained herein. In addition, as an unaffiliated investor, you will not be afforded the opportunity to perform your own due diligence investigation of, or otherwise obtain information on, THMA or Pear beyond the information that is contained in this proxy statement/prospectus (or is otherwise publicly available). You therefore may not have the benefit of the same level of review as an investor in an underwritten public offering, who has the benefit of the underwriters’ evaluation and due diligence investigation of the issuer.

In addition, because there are no underwriters engaged in connection with the Business Combination, prior to the opening of trading on Nasdaq on the trading day immediately following the Closing, there will be no book building process and no price at which underwriters initially sold shares to the public to help inform efficient and sufficient price discovery with respect to the initial post-Closing trades on Nasdaq. Therefore, buy and sell orders submitted prior to and at the opening of initial post-Closing trading of the Post-Combination Company’s securities on Nasdaq will not have the benefit of being informed by a published price range or a price at which the underwriters initially sold shares to the public, as would be the case in an underwritten initial public offering. There will be no underwriters assuming risk in connection with an initial resale of shares of the Post-Combination Company’s securities or helping to stabilize, maintain or affect the public price of the Post-Combination Company’s securities following the Closing. All of these differences from an underwritten public offering of Pear’s securities could result in a more volatile price for the Post-Combination Company’s securities.

Further, while we and Pear do intend to conduct a “roadshow” prior to the opening of initial post-Closing trading of the Post-Combination Company’s securities on Nasdaq, the roadshow will not be the same as a traditional one conducted in connection with an underwritten initial public offering. There can be no guarantee that any information made available through such roadshow, in this proxy statement/prospectus and/or otherwise disclosed or filed with the SEC will have the same impact on investor education as a traditional roadshow conducted in connection with an underwritten initial public offering. As a result, there may not be efficient or sufficient price discovery with respect to the Post-Combination Company’s securities or sufficient demand among potential investors immediately after the Closing, which could result in a more volatile price for the Post-Combination Company’s securities.

In addition, our initial shareholders, including our Sponsor, as well as their respective affiliates and permitted transferees, have interests in the Business Combination that are different from or are in addition to our shareholders and that would not be present in an underwritten public offering of Pear’s securities. See “The Business Combination—Interests of THMA’s Directors and Executive Officers in the Business Combination” beginning on page 268.

 

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Such differences from an underwritten public offering may present material risks to unaffiliated investors that would not exist if Pear became a publicly listed company through an underwritten initial public offering instead of upon completion of the Merger.

Pear’s stockholders will have a reduced ownership and voting interest in the Post-Combination Company following the Business Combination and will exercise less influence over management.

Pear’s stockholders currently have the right to vote in the election of the Pear board of directors and on other matters requiring stockholder approval under Delaware law and Pear’s organizational documents. Upon the completion of the Business Combination, Pear stockholders who become stockholders of the Post-Combination Company will have a percentage ownership of the Post-Combination Company that is smaller than such stockholders’ percentage ownership of Pear. Immediately following the consummation of the Business Combination, the current Pear equityholders will own 113,040,552 THMA Class A Common Shares, representing approximately 71.2% of the total THMA Class A Common Shares expected to be outstanding immediately after the Business Combination (assuming that (i) no Public Shares are redeemed, (ii) all Pear Vested In-the-Money Options remain unexercised as of immediately prior to the Effective Time and (iii) there are no other issuances of equity interests of the Post-Combination Company and without into taking account (x) any THMA warrants that will remain outstanding immediately following the Closing and may be exercised at a later date, (y) the Earn Out Shares and (z) 1,269,600 shares held by the Sponsor that are subject to vesting requirements pursuant to the Sponsor Agreement). See “Summary—Ownership of the Post-Combination Company” for the expected percentage ownership of the Post-Combination Company of current Pear equityholders assuming that all outstanding Public Shares are redeemed and the minimum cash condition in the Business Combination Agreement would be waived by Pear. A table setting forth the implied ownership levels by, and returns to, holders of the Post-Combination Company’s securities (including THMA’s current stockholders) at various prices of the Post-Combination Company’s common stock, based on the aformentioned assumptions, is included in the section entitled “The Business Combination—Interests of THMA’s Directors and Executive Officers in the Business Combination.” Because of this, current Pear stockholders, as a group, will have less influence on the board of directors, management and policies of the Post-Combination Company than they now have on the board of directors, management and policies of Pear.

THMA stockholders will have a reduced ownership and voting interest in the Post-Combination Company following the Business Combination and will exercise less influence over management.

Upon the issuance of THMA Class A Common Shares to Pear equityholders, Subscribers and the Anchor Investor, current THMA stockholders’ percentage ownership will be diluted. Immediately following the consummation of the Business Combination, current THMA Public Stockholders will own 27,600,000 THMA Class A Common Shares, representing approximately 17.4% of the total THMA Class A Common Shares expected to be outstanding immediately after the Business Combination (assuming that (i) no Public Shares are redeemed, (ii) all Pear Vested In-the-Money Options remain unexercised as of immediately prior to the Effective Time and (iii) there are no other issuances of equity interests of the Post-Combination Company and without into taking account (x) any THMA warrants that will remain outstanding immediately following the Closing and may be exercised at a later date, (y) the Earn Out Shares and (z) 1,269,600 shares held by the Sponsor that are subject to vesting requirements pursuant to the Sponsor Agreement). If all Public Shares are redeemed, the current THMA Public Stockholders will not own any THMA Class A Common Shares as of immediately following the consummation of the Business Combination. However, owners of the 9,200,000 Public Warrants outstanding will continue to own such Public Warrants even if such owner has redeemed any or all of the Public Shares held by them. Such 9,200,000 Public Warrants had an aggregate market value of $8,004,000 based upon the closing price of $0.87 per THMA Class A Common Share on the Nasdaq on October 22, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus.

In addition, a table setting forth the implied ownership levels by, and returns to, holders of the Post-Combination Company’s securities (including THMA’s current stockholders) at various prices of the Post-

 

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Combination Company’s common stock, based on the aformentioned assumptions, is included in the section entitled “The Business Combination—Interests of THMA’s Directors and Executive Officers in the Business Combination.

Additionally, of the expected members of the Post-Combination Company’s board of directors after the completion of the Business Combination, only one will be a director designated by THMA and six will be directors designated by Pear. Because of this, current THMA stockholders, as a group, will have less influence on the board of directors, management and policies of the Post-Combination Company than they now have on the board of directors, management and policies of THMA.

THMA has not obtained an opinion from an independent investment banking firm, and consequently, there is no assurance from an independent source that the merger consideration is fair to its stockholders from a financial point of view.

THMA is not required to, and has not, obtained an opinion from an independent investment banking firm that the Merger Consideration it is paying for Pear is fair to THMA’s stockholders from a financial point of view. The officers and directors of THMA have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and background, together with the experience and sector expertise of THMA’s advisors, enabled them to make the necessary analyses and determinations regarding the Business Combination. In addition, THMA’s officers and directors and THMA’s advisors have substantial experience with mergers and acquisitions. Although the THMA Board did not seek a third-party valuation, and did not receive any report, valuation or opinion from any third party in connection with the Business Combination, the THMA Board relied on the following sources: (i) due diligence on Pear’s strategy and operations, (ii) analyses and research by THMA management and external advisors on the digital therapeutics industry, and (iii) THMA management’s collective experience in evaluating financial models/projections and conducting valuations of businesses. The $1.2 billion purchase price is on a pre-money basis. THMA’s Board concluded that that price is fair and reasonable, given Pear’s growth prospects and the potentially large market for prescription digital therapeutic products, the internal valuation of Pear by THMA management based on an analysis of comparable companies and the other factors described in “Recommendation of the THMA Board of Directors and Reasons for the Business Combination.” The THMA Board also determined that Pear’s fair market value was at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the execution of the Business Combination Agreement. THMA’s stockholders will be relying on the judgment of the THMA Board with respect to such matters.

The parties to the Business Combination Agreement may amend the terms of the Business Combination Agreement or waive one or more of the conditions to the consummation of the Business Combination, and the exercise of discretion by THMA’s directors and officers in agreeing to changes to the terms of, or waivers of, closing conditions in the Business Combination Agreement may result in a conflict of interest when determining whether such changes to the terms of the Business Combination Agreement or waivers of conditions are appropriate and in the best interests of THMA’s stockholders.

In the period leading up to the Closing, other events may occur that, pursuant to the Business Combination Agreement, would require THMA to agree to amend the Business Combination Agreement, to consent to certain actions or to waive certain closing conditions or other rights that THMA is entitled to under the Business Combination Agreement. Such events could arise because of changes in the course of Pear’s business, a request by Pear to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on Pear’s business and would entitle THMA to terminate the Business Combination Agreement. In any of such circumstances, it would be in THMA’s discretion, subject to the approval of its board of directors (where required), to grant THMA’s consent or waive THMA’s rights. The existence of the financial and personal interests of the directors and officers described elsewhere in this proxy statement/prospectus may result in a conflict of interest on the part of

 

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one or more of THMA’s directors or officers between what he or she may believe is best for THMA and its stockholders and what he or she may believe is best for himself or herself or his or her affiliates in determining whether or not to take the requested action.

For example, it is a condition to THMA’s obligation to consummate the Business Combination that Pear’s representations and warranties be true and correct as of the Closing in all respects subject to the applicable materiality qualifiers set forth in the Business Combination Agreement. However, if the THMA Board determines that any such breach is not material to the business of Pear, then the THMA Board may elect to waive that condition and close the Business Combination. The parties will not waive the condition that THMA’s stockholders approve the Business Combination.

As of the date of this proxy statement/prospectus, THMA does not believe there will be any material changes or waivers that THMA’s directors and officers would be likely to make after the approval of THMA’s stockholders of the Business Combination has been obtained. While certain changes could be made without further stockholder approval, if there is a change to the terms of the Business Combination that would have a material impact on THMA’s stockholders, THMA will be required to circulate a new or amended proxy statement or supplement thereto and resolicit the vote of THMA’s stockholders with respect to the Business Combination Proposal.

Termination of the Business Combination Agreement could negatively impact Pear and THMA.

If the Business Combination is not completed for any reason, including as a result of Pear stockholders declining to adopt the Business Combination Agreement or THMA stockholders declining to approve any of the Proposals that are conditions to the consummation of the Business Combination, the ongoing businesses of Pear and THMA may be adversely impacted and, without realizing any of the anticipated benefits of completing the Business Combination, Pear and THMA would be subject to a number of risks, including the following:

 

   

Pear or THMA may experience negative reactions from the financial markets, including negative impacts on its stock price (including to the extent that the current market price reflects a market assumption that the Business Combination will be completed);

 

   

Pear may experience negative reactions from its customers, resellers, vendors and employees;

 

   

Pear and THMA will have incurred substantial expenses and will be required to pay certain costs relating to the Business Combination, whether or not the Business Combination is completed; and

 

   

since the Business Combination Agreement restricts the conduct of Pear’s and THMA’s businesses prior to completion of the Business Combination, each of Pear and THMA may not have been able to take certain actions during the pendency of the Business Combination that would have benefitted it as an independent company, and the opportunity to take such actions may no longer be available (see the section entitled “The Business Combination Agreement—Covenants and Agreements” beginning on page 279 for a description of the restrictive covenants applicable to Pear and THMA).

If the Business Combination Agreement is terminated and Pear’s board of directors seeks another merger or business combination, Pear stockholders cannot be certain that Pear will be able to find a party willing to offer equivalent or more attractive consideration than the consideration THMA has agreed to provide in the Business Combination or that such other merger or business combination is completed. If the Business Combination Agreement is terminated and the THMA Board seeks another merger or business combination, THMA stockholders cannot be certain that THMA will be able to find another acquisition target that would constitute a business combination or that such other merger or business combination will be completed. See “The Business Combination Agreement—Termination on page 291.

 

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Pear will be subject to business uncertainties and contractual restrictions while the Business Combination is pending.

Uncertainty about the effect of the Business Combination on employees and customers may have an adverse effect on Pear and consequently on THMA. These uncertainties may impair Pear’s ability to attract, retain and motivate key personnel until the Business Combination is completed and could cause customers and others that deal with Pear to seek to change existing business relationships with Pear. Retention of certain employees may be challenging during the pendency of the Business Combination as certain employees may experience uncertainty about their future roles. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the business, our business following the Business Combination could be negatively impacted. In addition, the Business Combination Agreement restricts Pear from making certain expenditures and taking other specified actions without the consent of THMA until the Business Combination occurs. These restrictions may prevent Pear from pursuing attractive business opportunities that may arise prior to the completion of the Business Combination. See “The Business Combination Agreement—Covenants and Agreements” beginning on page 279.

THMA directors and officers may have interests in the Business Combination different from the interests of THMA stockholders.

Executive officers of THMA negotiated the terms of the Business Combination Agreement with their counterparts at Pear, and the THMA Board determined that entering into the Business Combination Agreement was in the best interests of THMA and its stockholders, declared the Business Combination Agreement advisable and recommended that THMA stockholders approve the proposals required to effect the Business Combination. In considering these facts and the other information contained in this proxy statement/prospectus, you should be aware that THMA’s executive officers and directors may have financial interests in the Business Combination that may be different from, or in addition to, the interests of THMA stockholders. In particular, if the Business Combination with Pear or another business combination is not consummated within the Combination Window, THMA will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Public Shares for cash and, subject to the approval of its remaining stockholders and the THMA Board, dissolving and liquidating. In such event, all Founder Shares held by THMA’s Sponsor, its directors and its Advisors will be worthless and such persons will lose their entire investment in THMA. Further, in the event that the Business Combination is consummated, THMA’s Sponsor, directors and officers may receive a return on investment that is higher than the return on investment received by THMA’s Public Stockholders, as shown in the table included in the section entitled “The Business Combination—Interests of THMA’s Directors and Executive Officers in the Business Combination”.

Furthermore, given the differential in the purchase price that our Sponsor paid for the Founder Shares as compared to the price of the units sold in the Initial Public Offering and the substantial number of shares of THMA Class A common stock that our Sponsor will receive upon conversion of the Founder Shares in connection with the Business Combination, our Sponsor and the other Initial Stockholders may earn a positive rate of return on their investment even if the common stock of the Post-Combination Company trades below the price initially paid for the units in the Initial Public Offering and the public stockholders experience a negative rate of return following the completion of the Business Combination

The THMA Board was aware of and considered these interests, among other matters, in reaching the determination to approve the terms of the Business Combination and in recommending to THMA’s stockholders that they vote to approve the Business Combination. For a detailed discussion of the special interests that THMA’s directors and executive officers may have in the Business Combination, please see the section entitled “The Business Combination—Interests of THMA’s Directors and Executive Officers in the Business Combination beginning on page 268.

 

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Pear directors and officers may have interests in the Business Combination different from the interests of Pear stockholders.

Executive officers of Pear negotiated the terms of the Business Combination Agreement with their counterparts at THMA, and the Pear board of directors determined that entering into the Business Combination Agreement was in the best interests of Pear and its stockholders. In considering these facts and the other information contained in this proxy statement/prospectus, you should be aware that Pear’s executive officers and directors may have financial interests in the Business Combination that may be different from, or in addition to, the interests of Pear stockholders. The Pear board of directors was aware of and considered these interests, among other matters, in reaching the determination to approve the terms of the Business Combination. For a detailed discussion of the special interests that Pear’s directors and executive officers may have in the Business Combination, please see the section entitled “The Business Combination—Interests of Pear’s Directors and Executive Officers in the Business Combination beginning on page 272.

The Sponsor may have interests in the Business Combination different from the interests of THMA stockholders.

When considering the THMA Board’s recommendation that its stockholders vote in favor of the approval of the Business Combination Proposal and the other Proposals described in this proxy statement/prospectus, its stockholders should be aware that the Sponsor has interests in the Business Combination that may be different from, in addition to, or may conflict with the interests of THMA’s stockholders in general. While our Sponsor and each of THMA’s directors and officers have agreed to vote their shares in favor of the Business Combination Proposal, stockholders should be aware that our Sponsor and THMA’s directors and officers may have interests that may be different from, or in addition to, those of THMA’s stockholders generally, and may be incentivized to complete the Business Combination even if it is with a less favorable target company or on less favorable terms, rather than liquidate. For a more complete description of these interests, see the section entitled “The Business CombinationInterests of THMA’s Directors and Executive Officers in the Business Combination” beginning on page 268.

The Business Combination will result in changes to the board of directors that may affect our strategy.

If the parties complete the Business Combination and the Director Election Proposal is approved, the composition of the Post-Combination Company’s board of directors will change from the current boards of directors of THMA and Pear. The board of directors of the Post-Combination Company will continue to be divided into three classes and will consist of the directors elected pursuant to the Director Election Proposal, each of which will serve an initial term ending in either 2022, 2023 or 2024, and thereafter will serve a three-year term. This new composition of the Post-Combination Company board of directors may affect our business strategy and operating decisions upon the completion of the Business Combination.

The Business Combination Agreement contains provisions that may discourage other companies from trying to acquire Pear for greater merger consideration.

The Business Combination Agreement contains provisions that prohibit Pear from seeking alternative business combinations during the pendency of the Business Combination. These provisions include a general prohibition on Pear from soliciting or entering into discussions with any third party regarding any acquisition proposal or offers for competing transactions. Pear also has an unqualified obligation to submit the proposal to adopt the Business Combination Agreement to a vote by its stockholders, even if Pear receives an alternative acquisition proposal that its board of directors believes is superior to the Business Combination, unless the Business Combination Agreement has been terminated in accordance with its terms. See “The Business Combination Agreement—Covenants and Agreements” and “—Termination” beginning on pages 279 and 291, respectively.

 

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The Business Combination Agreement contains provisions that may discourage THMA from seeking an alternative business combination.

The Business Combination Agreement contains provisions that prohibit THMA from seeking alternative business combinations during the pendency of the Business Combination. These provisions include a general prohibition on THMA from soliciting or entering into discussions with any third party regarding any acquisition proposal by THMA for any person other than Pear. THMA also has an unqualified obligation to submit the proposal to adopt the Business Combination Agreement to a vote by its stockholders, even if THMA becomes aware of an alternative business combination transaction that its board of directors believes is superior to the Business Combination, unless the Business Combination Agreement has been terminated in accordance with its terms. See “The Business Combination Agreement—Covenants and Agreements” and “—Termination” beginning on pages 279 and 291, respectively.

During the pre-Closing period, THMA and Pear are prohibited from entering into certain transactions that might otherwise be beneficial to THMA, Pear or their respective stockholders.

Until the earlier of the consummation of the Business Combination or termination of the Business Combination Agreement, THMA and Pear are subject to certain limitations on the operations of their businesses, each as summarized under the “The Business Combination Agreement—Covenants and Agreements.” The limitations on THMA’s and Pear’s conduct of their businesses during this period could have the effect of delaying or preventing other strategic transactions and may, in some cases, make it impossible to pursue business opportunities that are available only for a limited time.

The unaudited pro forma condensed combined financial information included in this proxy statement/prospectus is preliminary and the actual financial condition and results of operations after the Business Combination may differ materially.

The unaudited pro forma financial information included in this proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what the Post-Combination Company’s actual financial position or results of operations would have been had the Business Combination been completed on the date(s) indicated. The preparation of the pro forma financial information is based upon available information and certain assumptions and estimates that THMA and Pear currently believe are reasonable. The unaudited pro forma financial information reflects adjustments, which are based upon preliminary estimates, among other things, to allocate the purchase price to Pear’s net assets. The purchase price allocation reflected in this proxy statement/prospectus is preliminary, and the final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of Pear as of the date of the completion of the Business Combination. In addition, following the completion of the Business Combination, there may be further refinements of the purchase price allocation as additional information becomes available. Accordingly, the final purchase accounting adjustments may differ materially from the pro forma adjustments reflected in this proxy statement/prospectus. See “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 79.

The Public Warrants and Private Placement Warrants are being accounted for as liabilities with changes in fair value each period reported in earnings, which could have an adverse effect on the Post-Combination Company’s financial results.

On April 12, 2021, the Staff of the SEC issued a statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies” (the “SEC Statement”) informing market participants that certain warrants issued by special purpose acquisition companies may require classification as a liability of the entity measured at fair value, with changes in fair value each period reported in earnings. In further consideration of the SEC Statement, THMA’s management further evaluated THMA’s warrants under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s

 

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Own Equity, and concluded that the warrants should be classified as liabilities, rather than equity securities, measured at fair value at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings (loss) in the statement of operations. As a result of the recurring fair value measurement, THMA’s financial statements and results of operations may fluctuate quarterly, based on factors, which are outside of its control. Due to the recurring fair value measurement, THMA expects that it will recognize non-cash gains or losses on its warrants each reporting period and that the amount of such gains or losses could be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of THMA’s securities.

Upon review of the SEC Statement, THMA’s management decided to change the accounting treatment for THMA’s warrants to comply with the guidance from the SEC. The decision in connection with the preparation of THMA’s Form 10-Q for the quarter ended March 31, 2021 to change the accounting treatment of the warrants led management to conclude that there was a material weakness in internal control over financial reporting, which had not been fully remediated as of June 30, 2021. In light of the material weakness, THMA performed additional analysis as deemed necessary to ensure that its financial statements were prepared in accordance with U.S. generally accepted accounting principles. While THMA has processes to identify and appropriately apply applicable accounting requirements, THMA can offer no assurance that its remediation plan will ultimately have the intended effects. Additionally, THMA cannot assure you that the measures it has taken to date, or any measures it may take in the future, will be sufficient to avoid potential future material weaknesses.

THMA and Pear will incur transaction costs in connection with the Business Combination.

Each of THMA and Pear has incurred and expects that it will incur significant, non-recurring costs in connection with consummating the Business Combination. THMA and Pear may also incur additional costs to retain key employees. THMA and Pear will also incur significant legal, financial advisor, accounting, banking and consulting fees, fees relating to regulatory filings and notices, SEC filing fees, printing and mailing fees and other costs associated with the Business Combination. THMA and Pear estimate that they will incur $30 million in aggregate transaction costs, inclusive of approximately $9.7 million in deferred underwriting fees. Some of these costs are payable regardless of whether the Business Combination is completed. See “The Business Combination—Fees and Expenses” beginning on page 293.

Pear’s and THMA’s stockholders will have their rights as stockholders governed by the Proposed Charter and the Proposed Bylaws.

As a result of the completion of the Business Combination, holders of Pear Shares and holders of THMA Shares may become holders of shares of the Post-Combination Company’s Class A common stock, which will be governed by the Proposed Charter and the Proposed Bylaws. As a result, there will be differences between the rights currently enjoyed by Pear stockholders or THMA stockholders, as applicable, and the rights that they would enjoy if they become stockholders of the Post-Combination Company. See “Comparison of Stockholders’ Rights” beginning on page 303.

The Sponsor and THMA’s directors, Advisors and officers have agreed to vote in favor of the Business Combination, regardless of how THMA’s Public Stockholders vote.

The Sponsor and THMA’s directors, Advisors and officers have agreed to vote their THMA Common Shares in favor of the Business Combination. The Sponsor and THMA’s directors and Advisors collectively owns approximately 20% of the THMA Common Shares prior to the Business Combination. Accordingly, it is more likely that the requisite approval of the THMA stockholders for the Required Proposals will be obtained, and the related condition to closing of the Business Combination will be satisfied, than would be the case if the Sponsor and THMA’s directors and Advisors had agreed to vote their THMA Common Shares in accordance with the majority of the votes cast by Public Stockholders. See “Other Agreements—Sponsor Agreement” on page 294.

 

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Provisions in the Proposed Charter and Delaware law may have the effect of discouraging lawsuits against the directors and officers of the Post-Combination Company.

Following the Business Combination, the Proposed Charter will provide that unless the Post-Combination Company consents to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action brought by a stockholder on behalf of the Post-Combination Company, (ii) any claim of breach of a fiduciary duty owed by any of the Post-Combination Company’s directors, officers, stockholders, or employees, (iii) any claim against the Post-Combination Company arising under its charter or bylaws or the DGCL and (iv) any claim against the Post-Combination Company governed by the internal affairs doctrine. The Proposed Charter designates the United States District Court for the District of Delaware as the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.

This exclusive forum provision will not apply to claims under the Exchange Act, but will apply to other state and federal law claims including actions arising under the Securities Act. Section 22 of the Securities Act, however, created concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act.

Although THMA believes this provision will benefit the Post-Combination Company by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, this choice of forum provision may have the effect of increasing costs for investors to bring a claim against the Post-Combination Company and its directors and officers and of limiting a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Post-Combination Company or any of its directors, officers, other employees or stockholders, which may discourage (but not prevent) lawsuits with respect to such claims.

Certain of THMA’s and directors are now, and may in the future become, affiliated with entities engaged in business activities similar to those conducted by it or Pear currently and that are intended to be conducted by the Post-Combination Company and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business opportunity should be presented.

Certain of THMA’s officers and directors are now, and may in the future become, affiliated with entities engaged in business activities similar to those conducted by it or Pear currently and that are intended to be conducted by the Post-Combination Company. Accordingly, THMA’s officers and directors may become aware of business opportunities that may be appropriate for presentation to THMA and the other entities to which they owe certain fiduciary or contractual duties.

The Current Charter includes a “corporate opportunity” waiver that provides that THMA renounces its 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 our director or officer 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 any legal obligation. THMA does not believe that the waiver of the corporate opportunity doctrine in its Current Charter interfered with its ability to identify an acquisition target. In the absence of the “corporate opportunity” waiver in THMA’s charter, certain of the proposed directors and officers of THMA would not be able to, or willing to, serve as an officer or director. We believe the inclusion of the “corporate opportunity” waiver in the Current Charter provides THMA with greater flexibility to attract and retain the officers and directors that it believes are the best candidates for such positions.

 

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Risks Related to Redemption

In this section “we,” “us” and “our” refer to THMA prior to the Business Combination and to the Post-Combination Company following the Business Combination.

If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share.

Our placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we have sought and will continue to seek to have all vendors, service providers, prospective target businesses, including Pear, or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our Public Stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantages with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Marcum LLP, our independent registered public accounting firm, did not execute agreements with us waiving such claims to the monies held in the Trust Account.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Upon redemption of our Public Shares, if we are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per share redemption amount received by Public Stockholders could be less than the $10.00 per share initially held in the Trust Account, due to claims of such creditors. Our Sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business, with which we have discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, then our Sponsor will not be responsible to the extent of any liability for such third-party claims. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our Sponsor’s only assets are securities of THMA. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per Public Share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your Public Shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

 

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Our independent directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our Public Stockholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per Public Share or (ii) such lesser amount per share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations.

While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our Public Stockholders may be reduced below $10.00 per share.

There is no guarantee that a Public Stockholder’s decision whether to redeem their Public Shares for a pro rata portion of the Trust Account will put such stockholder in a better future economic position.

No assurance can be given as to the price at which a Public Stockholder may be able to sell THMA Class A Common Shares in the future following the completion of the Business Combination. Certain events following the consummation of any business combination, including the Business Combination, may cause an increase in our stock price, and may result in a lower value realized now than a Public Stockholder might realize in the future had the stockholder not elected to redeem such stockholder’s Public Shares. Similarly, if a Public Stockholder does not redeem his, her or its shares, such stockholder will bear the risk of ownership of THMA Class A Common Shares after the consummation of the Business Combination, and there can be no assurance that a stockholder can sell his, her or its THMA Class A Common Shares in the future for a greater amount than the redemption price set forth in this proxy statement/prospectus. A Public Stockholder should consult his, her or its own tax and/or financial advisor for assistance on how this may affect its individual situation.

If Public Stockholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their Public Shares for a pro rata portion of the funds held in the Trust Account.

To exercise their redemption rights, Public Stockholders are required to deliver their stock, either physically or electronically using The Depository Trust Company’s DWAC System, to THMA’s transfer agent no later than two business days prior to the vote at the Special Meeting. If a Public Stockholder properly seeks redemption as described in this proxy statement/prospectus and the Business Combination with Pear is consummated, THMA will redeem these shares for a pro rata portion of funds deposited in the Trust Account and such holder will no longer own such shares following the Business Combination. See the section entitled “THMA’s Special Meeting of StockholdersRedemption Rights” for additional information on how to exercise your redemption rights.

The ability of THMA stockholders to exercise redemption rights with respect to a large number of shares could increase the probability that the Business Combination would be unsuccessful and that stockholders would have to wait for liquidation in order to redeem their stock.

At the time THMA entered into the Business Combination Agreement and related agreements for the Business Combination, THMA did not know how many stockholders would exercise their redemption rights, and therefore THMA structured the Business Combination based on its expectations as to the number of shares that

 

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will be submitted for redemption. The Business Combination Agreement requires THMA to have cash on hand equal to or in excess of $200 million at Closing, following (i) the closing of the transactions contemplated by the Subscription Agreements (in respect of which Subscribers have committed to purchase THMA Class A Common Shares for $102.8 million) and the transactions contemplated by the Amended Forward Purchase Agreement (in respect of which the Anchor Investor has committed to purchase THMA Class A Common Shares for at least $23 million), (ii) distribution of the Trust Account, deducting all amounts to be paid pursuant to the redemption of Public Shares, and (iii) deduction of any unpaid THMA transaction expenses. If a larger number of shares are submitted for redemption than initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account. The above considerations may limit our ability to complete the Business Combination or optimize our capital structure.

If, before distributing the proceeds in the Trust Account to our Public Stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to our Public Stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, after we distribute the proceeds in the Trust Account to our Public Stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our Board may be exposed to claims of punitive damages.

If, after we distribute the proceeds in the Trust Account to our Public Stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our Board may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying Public Stockholders from the Trust Account prior to addressing the claims of creditors.

If you or a “group” of stockholders of which you are a part are deemed to hold an aggregate of more than 15% of the Public Shares, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 15% of the Public Shares.

A Public Stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its Public Shares or, if part of such a group, the group’s Public Shares, in excess of 15% of the Public Shares without the consent of THMA. Your inability to redeem any such excess Public Shares could result in your suffering a material loss on your investment in THMA if you sell such excess Public Shares in open market transactions. THMA cannot assure you that the value of such excess Public Shares will appreciate over time following the Business Combination or that the market price of the Public Shares will exceed the per-share redemption price.

However, THMA’s stockholders’ ability to vote all of their Public Shares (including such excess shares) for or against the Business Combination Proposal is not restricted by this limitation on redemption.

 

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There is uncertainty regarding the federal income tax consequences of the redemption to the holders of THMA Class A Common Shares.

There is some uncertainty regarding the federal income tax consequences to holders of THMA Class A Common Shares that exercise their redemption rights. Such uncertainty relates primarily to the individual circumstances of the taxpayer and includes (i) whether the redemption will be treated as a corporate distribution potentially taxable as a dividend, or a sale, that would potentially give rise to capital gain or capital loss, and (ii) whether such capital gain is “long-term” or “short-term.” Whether the redemption qualifies for sale treatment, resulting in taxation as capital gain rather than treatment as a corporate distribution, will depend largely on whether the holder owns (or is deemed to own) any THMA Class A Common Shares following the redemption, and if so, the total number of THMA Class A Common Shares treated as held by the holder both before and after the redemption relative to all shares of THMA voting stock outstanding both before and after the redemption. The redemption generally will be treated as a sale, rather than a distribution, if the redemption (i) is “substantially disproportionate” with respect to the holder, (ii) results in a “complete termination” of the holder’s interest in THMA or (iii) is “not essentially equivalent to a dividend” with respect to the holder. Due to the personal and subjective nature of certain of such tests and the absence of clear guidance from the Internal Revenue Service (“IRS”), there is uncertainty as to how a holder who elects to exercise its redemption rights will be taxed in connection with the exercise of redemption rights. See the section entitled “Material U.S. Federal Income Tax Consequences—Material Tax Consequences of a Redemption of Public Shares.”

Unlike some other blank check companies, THMA does not have a specified maximum redemption threshold. The absence of such a redemption threshold will make it easier for us to consummate the Business Combination even if a substantial number of our stockholders redeem.

Unlike some other blank check companies, THMA does not have a specified maximum redemption threshold, except that (i) we will not redeem Public Shares in an amount that would cause our net tangible assets to be less than $5,000,001 and (ii) we will not redeem Public Shares in excess of the “15% threshold” (as described in “Information about THMA—Limitation on Redemption Rights”) beneficially owned by a Public Stockholder or “group” (as defined in Section 13(d)(3) of the Exchange Act). Some other blank check companies’ structures disallow the consummation of a business combination if the holders of such companies’ stockholders elect to redeem or convert more than a specified percentage of the shares sold in such companies’ initial public offering. Because we have no such maximum redemption threshold (other than as described in this paragraph), we may be able to consummate the Business Combination even though a substantial number of our Public Stockholders have redeemed their shares.

However, the Business Combination Agreement provides that the obligation of Pear to consummate the Business Combination is conditioned upon THMA having cash on hand equal to or in excess of $200 million at Closing, following (i) the closing of the transactions contemplated by the Subscription Agreements (in respect of which Subscribers have committed to purchase THMA Class A Common Shares for $102.8 million) and the transactions contemplated by the Amended Forward Purchase Agreement (in respect of which the Anchor Investor has committed to purchase THMA Class A Common Shares for at least $23 million), (ii) distribution of the Trust Account, deducting all amounts to be paid pursuant to the redemption of Public Shares, and (iii) deduction of any unpaid THMA transaction expenses. While THMA has entered into Subscription Agreements with respect to the PIPE Transaction to raise up to $102.8 million in the aggregate, there can be no assurance that the Subscribers will perform their obligations thereunder. In the event that such condition is not satisfied, we will not complete the Business Combination or redeem any shares, all Public Shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information presents the combination of the financial information of THMA and Pear, adjusted to give effect to the consummation of the Merger, the PIPE Transaction and the Forward Purchase (collectively, the “Transactions”). The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X, Pro Forma Financial Information, as amended by the final rule, Release No. 33-10786,Amendments to Financial Disclosures about Acquired and Disposed Businesses,” which is herein referred to as Article 11.

In accordance with Article 11, the historical financial statements may be adjusted in the unaudited pro forma condensed combined financial information to give pro forma effect to provide for “Transaction Accounting Adjustments” reflecting only the application of required accounting for the Transactions. The unaudited pro forma condensed combined financial information does not reflect any Management Adjustments (as defined under Release No. 33-10786).

THMA is a blank check company formed 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.

Pear is a commercial-stage healthcare company pioneering a new class of software-based medicines, sometimes referred to as Prescription Digital Therapeutics, or PDTs, which use software to treat diseases directly. Pear’s vision is to advance healthcare through the widespread use of PDTs, and to be the one-stop shop for PDTs offered both by Pear and by other organizations that may choose to host their products on its commercial platform.

The unaudited pro forma condensed combined balance sheet as of June 30, 2021 combine the historical balance sheets of THMA and Pear on a pro forma basis as if the Transactions had been consummated on June 30, 2021. The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2021 and year ended December 31, 2020 combine the historical statements of operations of THMA and Pear on a pro forma basis as if the Transactions had been consummated on January 1, 2020, the beginning of the earliest period presented.

The unaudited pro forma combined financial information does not necessarily reflect what the Post-Combination Company’s financial condition or results of operations would have been had the Transactions occurred on the dates indicated. The unaudited pro forma combined financial information also may not be useful in predicting the future financial condition and results of operations of the Post-Combination Company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

Accounting for the Business Combination

The unaudited pro forma condensed combined financial information has been derived from and should be read together with THMA’s and Pear’s audited and unaudited financial statements and related notes, the sections entitled “THMA’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Pear’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in this proxy statement/prospectus, including the description of the Transactions and the risk factors set forth under the section entitled “Risk Factors”.

The Merger will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with U.S. GAAP. Pear has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

 

 

Pear shareholders will have a majority of the voting power under both the no redemption and maximum redemption scenarios;

 

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Pear will appoint the majority of the Post-Combination Company Board;

 

 

Pear’s existing management team will comprise the management of the Post-Combination Company;

 

 

Pear will comprise the ongoing operations of the Post-Combination Company;

 

 

Pear is the larger entity based on historical revenues and business operations; and

 

 

the Post-Combination Company will assume Pear’s name.

Under this method of accounting, THMA will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Merger will be treated as the equivalent of Pear issuing stock for the net assets of THMA, accompanied by a recapitalization. The net assets of THMA will be stated at historical cost, with no goodwill or other intangible assets recorded.

The unaudited pro forma condensed combined financial information presents two redemption scenarios as follows:

 

 

No Redemption: This scenario assumes that no THMA Class A Common Shares are redeemed by Public Stockholders; and

 

 

Maximum Redemption: This scenario assumes that 19,040,185 THMA Class A Common Shares are redeemed for an aggregate payment of approximately $190.4 million (based on an estimated per share redemption price of approximately $10.00 per share) from the Trust Account. The Business Combination Agreement includes as a condition to Pear’s obligation to consummate the Merger that, at the Closing, THMA will have a minimum of $200.0 million in cash. This $200.0 million includes the sum of all cash contained in the Trust Account, all other cash and cash equivalents of THMA, and cash received in connection with the PIPE Transaction and the Amended Forward Purchase Agreement, less the aggregate amount of cash proceeds that will be required to satisfy the redemption of any Public Shares, less the repayment of the $1.0 million THMA’s Promissory note - related party and any unpaid expenses of THMA in connection with the transactions contemplated by the Business Combination Agreement. The number of shares redeemed under the Maximum Redemption scenario reflects the estimated maximum number of redemptions that could occur without a failure to satisfy this minimum cash condition.

The unaudited pro forma condensed combined financial information has been adjusted to give pro forma effect to the following transactions which will occur pursuant to or concurrently with the Merger (except as otherwise specified below):

 

 

The Merger in accordance with the Business Combination Agreement, including:

 

  (i)

Each Pear Common Share issued and outstanding as of immediately prior to the Effective Time (excluding shares owned by Pear as treasury stock or dissenting shares) will be cancelled and converted into (x) the right to receive the Per Share Upfront Consideration and (y) the contingent right to receive Earn Out Shares as set forth in a Consideration Schedule. The “Per Share Upfront Consideration” is equal to such number of THMA Class A Common Shares equal to (i) $1,200,000,000 divided by $10.00 divided by (ii) the total number of Pear Common Shares outstanding immediately prior to the Effective Time, expressed on an as-exercised and as-converted to Pear Common Share basis (including any Pear Common Shares underlying Pear Vested In-the-Money Options (on a net exercise basis) or Pear Preferred Shares).

 

  (ii)

Each Pear Preferred Share issued and outstanding as of immediately prior to the Effective Time will be cancelled and converted into the right to receive Per Share Consideration in respect of such number of Pear Common Shares as set forth on a Consideration Schedule.

 

  (iii)

Each Pear In-the-Money Option will be converted into an option to purchase a number of THMA Class A Common Shares as set forth on the Consideration Schedule at an exercise price as set forth on such Consideration Schedule.

 

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  (iv)

Each Pear Warrant outstanding as of immediately prior to the Effective Time will be converted into a warrant to acquire a number of THMA Class A Common Shares in an amount and at an exercise price and subject to such terms and conditions, in each case, as set forth on the Consideration Schedule. The holders of all Pear Warrants that are currently outstanding have entered into agreements that require the automatic exercise of such Pear Warrants such that no Pear Warrants will be outstanding as of immediately prior to the Effective Time and as such no Pear Warrants will be converted into warrants to acquire THMA Class A Common Shares. Subject to certain exceptions, the terms and conditions of the Assumed Warrant will be the same terms and conditions as were applicable to the Pear Warrant immediately prior to the Effective Time.

 

 

Pursuant to THMA’s Current Charter, each THMA Class B Common Share that is issued and outstanding immediately prior to the Merger will be converted into one THMA Class A Common Share.

 

 

Subject to certain exceptions, during the Earn Out Period, THMA will issue to holders of Pear Common Shares and holders of Pear Preferred Shares as of immediately prior to the Effective time up to 12,394,625 additional THMA Class A Common Shares in the aggregate (the “Pear Stockholder Earn Out Shares”) in three equal tranches of 4,131,875 Pear Stockholder Earn Out Shares, respectively, upon THMA achieving $12.50, $15.00 or $17.50, respectively, as its volume-weighted average price per share for any 20 trading days within a 30 consecutive trading day period (as adjusted for share splits, reverse share splits, share dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or the like).

 

 

Subject to certain exceptions, during the Earn Out Period, THMA’s Sponsor has agreed not to transfer 1,269,600 THMA Class B Common Shares held by it (the “Sponsor Earn Out Shares”) and to have 922,453 Private Placement Warrants (the “Sponsor Earn Out Warrants”) held in trust, in each case, until such securities are released under the Sponsor Agreement. Pursuant to the Sponsor Agreement, (i) 423,200 of such Sponsor Earn Out Shares and 307,485 of such Sponsor Earn Out Warrants will be released upon THMA achieving $12.50 as its volume weighted average price per share for any 20 trading days within a 30 consecutive trading day period, (ii) 423,200 of such Sponsor Earn Out Shares and 307,484 of such Sponsor Earn Out Warrants will be released upon THMA achieving $15.00 as its volume weighted average price per share for any 20 trading days within a 30 consecutive trading day period, and (iii) 423,200 of such Sponsor Earn Out Shares and 307,484 of such Sponsor Earn Out Warrants will be released upon THMA achieving $17.50 as its volume weighted average price per share for any 20 trading days within a 30 consecutive trading day period (as adjusted for share splits, reverse share splits, share dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or the like). Any such Sponsor Earn Out Shares or Sponsor Earn Out Warrants not released prior to the end of the Earn Out Period will be deemed to be forfeited.

 

 

Substantially concurrently with the consummation of the Merger, in the PIPE Transaction pursuant to the Subscription Agreements, THMA will issue and sell 10,280,000 THMA Class A Common Shares for a purchase price of $10.00 per share and an aggregate purchase price of $102.8 million.

 

 

Substantially concurrently with the consummation of the Merger, in the Forward Purchase pursuant to the Amended Forward Purchase Agreement, THMA will issue and sell to the Anchor Investor such number of THMA Class A Common Shares equal to the sum of (x) 2,300,000 and (y) such additional THMA Class A Common Shares as the Anchor Investor may elect to purchase up to the lesser of (A) the number of Public Shares redeemed by THMA’s Public Stockholders and (B) 2,700,000, in each case, for a purchase price of $10.00 per share.

 

 

Concurrently with the consummation of the Merger, the outstanding warrants to purchase 1,012,672 Pear Series D-1 Preferred Shares held by Perceptive Credit Holdings III, LP (“Perceptive”) will be exercised.

 

 

Concurrently with the consummation of the Merger, the outstanding warrants to purchase 32,711 Pear Series A Preferred Shares and 81,322 Pear Common Shares held by Silicon Valley Bank will be exercised.

 

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Description of the Minimum and Maximum Allowable Redemptions Scenarios

The following represents the aggregate merger consideration under the no redemption and maximum redemption scenarios:

 

     Minimum and
Maximum Redemption
 

(in thousands, except share and per share amounts)

   Purchase
Price
     Shares Issued  

Share consideration to Pear at Closing (1)(2)(3)

   $ 1,200,000        120,000,000  

 

(1)

The value of the THMA Class A Common Shares issued to Pear included in the consideration is reflected at $10 per share as defined in the Business Combination Agreement.

(2)

The total 120.0 million THMA Class A Common Shares include 113,040,552 THMA Class A Common Shares to be issued at the Closing upon the conversion of the issued and outstanding Pear Common Shares and Pear Preferred Shares and 6,959,448 THMA Class A Common Shares underlying vested Rollover Options granted upon the conversion of Pear Vested In-the-Money Options.

(3)

The total 120.0 million THMA Class A Common Shares exclude up to 12,394,625 additional Pear Stockholder Earn Out Shares.

Pursuant to THMA’s Current Charter, Public Stockholders will be provided the opportunity to redeem their Public Shares for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the Trust Account.

Assumptions and estimates underlying the Transaction Accounting Adjustments set forth in the unaudited pro forma condensed combined financial information are described in the accompanying notes. The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and is not necessarily indicative of the operating results and financial position that would have been achieved had the Transactions occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information does not purport to project the future operating results or financial position of the Post-Combination Company following the completion of the Transactions. The Transaction Accounting Adjustments unaudited pro forma adjustments represent management’s estimates based on information available as of the date of this unaudited pro forma condensed combined financial information and are subject to change as additional information becomes available and analyses are performed.

The following summarizes the unaudited pro forma shares of Post-Combination Company Common Stock outstanding under the no redemption and maximum redemption scenarios:

 

     No Redemptions     Maximum
Redemptions
 

Equity Capitalization Summary at Closing

   Shares      %     Shares      %  

THMA Public Stockholders

     27,600,000        17     8,559,815        6

THMA Initial Stockholders (1)

     5,630,400        4     5,630,400        4

Pear Equityholders (2)

     113,040,552        71     113,040,552        81

Subscribers

     10,280,000        7     10,280,000        7

Anchor Investors (3)

     2,300,000        1     2,300,000        2
  

 

 

    

 

 

   

 

 

    

 

 

 

Total Shareholders

     158,850,952        100     139,810,767        100
  

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)

Includes shares held by the Sponsor and THMA’s directors and Advisors. Excludes 1,269,600 Sponsor Earn Out Shares subject to forfeiture if certain performance-based vesting requirements are not met, as further described in Note 6.

(2)

Total consideration to be issued to holders of Pear Common Shares, Pear Preferred Shares and Pear Vested In-the-Money Options is $1.2 billion or 120.0 million shares ($10 per share price). The total shares to be

 

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  issued to Pear stockholders excludes 6,959,448 shares underlying Rollover Options, assuming such Rollover Options remain unexercised as of the Closing
(3)

In the maximum redemption scenario, excludes any additional shares that the Anchor Investor may elect to purchase in accordance with the Amended Forward Purchase Agreement.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF JUNE 30, 2021

 

    June 30, 2021     June 30, 2021  
    Historical     Assuming No
Redemption
    Assuming Maximum
Redemption
 
    U.S. GAAP                                      

(dollars in thousands)

  Pear
Therapeutics,
Inc.
    Thimble
Point
Acquisition
Corp.
    Transaction
Accounting
Adjustments
(Note 3)
          Pro Forma
Condensed
Combined
    Additional
Transaction
Accounting
Adjustments
(Assuming
Maximum
Redemption)
(Note 3)
          Pro Forma
Condensed
Combined
 

ASSETS

               

Current assets

               

Cash and cash equivalents

  $ 92,219     $ 1,346     $ 276,020       3a     $ 465,905     $ (190,414     1L     $ 275,489  
        (23,492     3b          
        97,800       3c          
        23,000       3d          
        (988     3e          

Short-term investments

    6,516       —         —           6,516       —           6,516  

Accounts receivable

    158       —         —           158       —           158  

Prepaid expenses and other current assets

    1,810       416       —           2,226       —           2,226  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total current assets

    100,703       1,762       372,340         474,805       (190,414       284,389  

Property and equipment, net

    5,204       —         —           5,204       —           5,204  

Restricted cash

    1,161       —         —           1,161       —           1,161  

Deferred offering costs

    3,503       —         (3,503     3b       —         —           —    

Other long-term assets

    792       —         —           792       —           792  

Marketable securities held in Trust Account

    —         276,020       (276,020     3a       —         —           —    
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

TOTAL ASSETS

  $ 111,363     $ 277,782     $ 92,817       $ 481,962     $ (190,414     $ 291,546  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

               

Current liabilities

               

Accounts payable

  $ 2,452     $ —       $ —         $ 2,452     $ —         $ 2,452  

Accrued expenses and other current liabilities

    12,483       1,565       —           14,048       —           14,048  

Deferred revenues

    1,306       —         —           1,306       —           1,306  

Debt

    26,654       —         —           26,654       —           26,654  

Promissory note – related party

    —         988       (988     3e       —         —           —    
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total current liabilities

    42,895       2,553       (988       44,460       —           44,460  

Embedded debt derivative

    675       —         —           675       —           675  

Warrant liabilities

    8,047       21,036       (7,727     3f       20,836       —           20,836  
        (320     3g          
        (200     3h          

Earn-out liabilities

    —         —         115,200       3i       115,200       —           115,200  

Other long-term liabilities

    1,549       —         —           1,549       —           1,549  

Deferred underwriting fee payable

    —         9,660       (9,660     3b       —         —           —    
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total Liabilities

    53,166       33,249       96,305         182,720       —           182,720  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Convertible preferred stock

    291,392       —         (291,392     3j       —         —           —    

Class A common stock subject to possible redemption, 27,600,000 shares as of June 30, 2021 at redemption value of $10 per share

    —         276,000       (276,000     3j       —         —           —    

Stockholders’ equity (deficit)

               

Common stock

    1       —         1       3c       15       (2     3l       13  
        0       3d          
        0       3f          
        0       3g          
        13       3j          

Class B common stock $0.0001 par value; 20,000,000 shares authorized; 6,900,000 shares issued and outstanding as of June 30, 2021

    —         1       (1     3j       —         —           —    

Additional paid-in capital

    2,238       —         (16,114     3b       535,882       (190,414     3l       345,468  
        97,799       3c          
        23,000       3d          
        7,727       3f          
        320       3g          
        200       3h          
        (115,200     3i          
        567,380       3j          
        (31,468     3k          

Accumulated deficit

    (235,435     (31,468     31,468       3k       (236,656     —           (236,656
        (1,221     3b          

Other comprehensive income

    1       —         —           1       —           1  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total stockholders’ (deficit) equity

    (233,195     (31,467     563,904         299,242       (190,414       108,826  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

  $ 111,363     $ 277,782     $ 92,817       $ 481,962     $ (190,414     $ 291,546  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

 

84


Table of Contents

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2021

 

    Six Months Ended
June 30, 2021
                Six Months Ended June 30, 2021  
    Pear
Therapeutics,
Inc.
    Thimble
Point
Acquisition
Corp.
    Transaction
Accounting
Adjustments

(Note 3)
          Pro Forma
Condensed
Combined
(Assuming No
Redemption)
          Additional
Transaction
Accounting
Adjustments

(Assuming
Maximum
Redemption)

(Note 3)
          Pro Forma
Condensed
Combined
(Assuming
Maximum
Redemption)
 

Revenue

                 

Product revenue

  $ 1,347     $ —       $ —         $ 1,347       $ —         $ 1,347  

Collaboration and license revenue

    230       —         —           230         —           230  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total revenue

    1,577       —         —           1,577         —           1,577  

Cost and operating expenses:

                 

Cost of product revenue

    1,465       —         —           1,465         —           1,465  

Research and development

    15,367       —         —           15,367         —           15,367  

Selling, general and administrative

    27,909       —         —           27,909         —           27,909  

Operating and formation costs

    —         2,975       (50     3m       2,925         —           2,925  
 

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total cost and operating expenses

    44,741       2,975       (50       47,666         —           47,666