S-1/A 1 tm217792d1_s-1a.htm FORM S-1/A

 

 

 

As filed with the U.S. Securities and Exchange Commission on April 2, 2021.

 

Registration No. 333-253629

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

 

Amendment No. 1 to

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

 

 

Blueprint Health Merger Corp.

(Exact name of registrant as specified in its charter)

 

 

Delaware   6770   86-1716448
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification Number)

 

 

200 Exchange Street

Providence, RI 02903
Telephone: (347) 687-6360

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

 

 

Rajiv Kumar
Chief Executive Officer

Blueprint Health Merger Corp.
200 Exchange Street

Providence, RI 02903
Telephone: (347) 687-6360

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

 

 

Copies to:

Douglas S. Ellenoff, Esq.
Stuart Neuhauser, Esq.

Tamar Donikyan, Esq.
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, NY 10105
Telephone: (212) 370-1300

Derek J. Dostal, Esq. 

Yan Zhang, Esq.
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
Telephone: (212) 450-4000

 

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 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, please 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(c) 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, a 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. ☐

 

CALCULATION OF REGISTRATION FEE

Title of Each Class of Security Being Registered   Amount Being
Registered
  Proposed
Maximum
Offering
Price per
Security(1)
  Proposed
Maximum
Aggregate
Offering Price(1)
  Amount of
Registration Fee
 
Units, each consisting of one share of Class A common stock, $0.0001 par value, and one-third of one redeemable warrant(2)   23,000,000 Units   $ 10.00   $ 230,000,000   $ 25,093  
Shares of Class A common stock included as part of the units(3)   23,000,000 Shares             (4)
Redeemable warrants included as part of the units(3)   7,666,667 Warrants              
Total             $ 230,000,000   $ 25,093 (5) 

 

 

 

(1)Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended (the “Securities Act”).

(2)Includes 3,000,000 units, consisting of 3,000,000 shares of Class A common stock and 1,000,000 redeemable warrants, which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.

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

(4)No fee pursuant to Rule 457(g) under the Securities Act.

(5) 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 of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

The information in this preliminary 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 prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED APRIL 2, 2021

 

PRELIMINARY PROSPECTUS

 

$200,000,000

 

Blueprint Health Merger Corp.

 

20,000,000 Units

 

 

Blueprint Health Merger Corp. is a newly incorporated blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. Although we reserve the right to pursue an acquisition opportunity in any business or industry, we intend to focus on digital health companies that are disrupting large and established industries and markets.

 

This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one share of our Class A common stock and one-third of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as described in this prospectus. Only whole warrants are exercisable. The warrants will become exercisable on the later of 30 days after the completion of our initial business combination and 12 months from the closing of this offering (the “warrant exercise date”), and will expire five years after the completion of our initial business combination or earlier upon redemption or liquidation (the “warrant expiration date”), as described in this prospectus. We have also granted the underwriters a 45-day option to purchase up to an additional 3,000,000 units to cover over-allotments, if any.

 

We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of our Class A common stock upon the completion of our initial business combination at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account described below calculated as of two business days prior to the consummation of our initial business combination, including interest, net of taxes payable, divided by the number of then outstanding public shares, subject to the limitations described herein. If we are unable to complete our initial business combination within 24 months from the closing of this offering, we will redeem 100% of the public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions as further described herein.

 

Our sponsor, Blueprint Health Merger Sponsor LLC, has agreed to purchase an aggregate of 4,000,000 warrants (or 4,400,000 warrants if the underwriters’ option to purchase additional units is exercised in full) at a price of $1.50 per warrant ($6,000,000 in the aggregate, or $6,600,000 in the aggregate if the underwriters’ option to purchase additional units is exercised in full) in a private placement that will close simultaneously with the closing of this offering. Each private placement warrant entitles the holder thereof to purchase one share of our Class A common stock at $11.50 per share, subject to adjustment as described in this prospectus.

 

Prior to this offering, there has been no public market for our units, Class A common stock or warrants. We have applied to list our units on the Nasdaq Capital Market (“Nasdaq”), under the symbol “BHMCU” on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on Nasdaq. The Class A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus, subject to certain conditions. Once the securities constituting the units begin separate trading, we expect that the Class A common stock and warrants will be listed on Nasdaq under the symbols “BHMC” and “BHMCW,” respectively.

 

We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves risks. Please see “Risk Factors” on page 33. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.

 

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

   Per Unit   Total 
Price to Public  $10.00   $200,000,000 
Underwriting Discounts and Commissions(1)  $0.55   $11,000,000 
Proceeds, before expenses, to us  $9.45   $189,000,000 

 

 

 

(1)Includes $0.35 per unit, or $7,000,000 (or up to $8,050,000 if the underwriters’ option to purchase additional units is exercised in full) in the aggregate, payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. The deferred commissions will be released to the underwriters only on completion of an initial business combination, in an amount equal to $0.35 multiplied by the number of shares of Class A common stock sold as part of the units in this offering, as described in this prospectus. Does not include certain fees and expenses payable to the underwriters in connection with this offering. See also “Underwriting” for a description of compensation and other items of value payable to the underwriters.

 

Of the proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, $200,000,000, or $230,000,000 if the underwriters’ option to purchase additional units is exercised in full ($10.00 per unit in either case), will be deposited into a U.S.-based trust account with Continental Stock Transfer & Trust Company acting as trustee.

 

The underwriters are offering the units for sale on a firm commitment basis. The underwriters expect to deliver the units to the purchasers on or about         , 2021.

 

 

Book-Running Manager

 

Credit Suisse

 

 

 

We are responsible for the information contained in this prospectus. We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the units offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

 

 

 

TABLE OF CONTENTS

   

Page

SUMMARY    1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY    32
RISK FACTORS    33
USE OF PROCEEDS    65
DIVIDEND POLICY    68
DILUTION    69
CAPITALIZATION    71
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS    72
PROPOSED BUSINESS    77
MANAGEMENT    110
PRINCIPAL STOCKHOLDERS    119
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS    121
DESCRIPTION OF SECURITIES    124
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS    140
UNDERWRITING    149
LEGAL MATTERS    154
EXPERTS    155
WHERE YOU CAN FIND ADDITIONAL INFORMATION    155
INDEX TO FINANCIAL STATEMENTS    F-1

 

Trademarks

 

This prospectus contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or ™ 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.

 

 

 

SUMMARY

 

This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.

 

Unless otherwise stated in this prospectus or the context otherwise requires, references to:

 

“amended and restated certificate of incorporation” are to our certificate of incorporation to be in effect upon the completion of this offering;

 

“common stock” are to our Class A common stock and our Class B common stock;

 

“completion window” is the period following the completion of this offering at the end of which, if we have not completed our initial business combination, we will redeem 100% of the public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions and as further described herein. The completion window ends 24 months from the closing of this offering;

 

“directors” are to our directors and director nominees;

 

“equity-linked securities” are to any debt or equity securities that are convertible, exercisable or exchangeable for shares of our Class A common stock issued in a financing transaction in connection with our initial business combination, including but not limited to a private placement of such securities;

 

“founder shares” are to shares of our Class B common stock and the shares of our Class A common stock issued upon the automatic conversion thereof at the time of our initial business combination as provided herein;

 

“initial stockholders” are to our sponsor and any other holders of our founder shares immediately prior to this offering;

 

“letter agreement” refers to the letter agreement, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part;

 

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

 

“private placement” are to a subscription of 4,000,000 warrants (or 4,400,000 warrants in the aggregate if the underwriters’ option to purchase additional units is exercised in full) at a price of $1.50 per warrant ($6,000,000 in the aggregate, or $6,600,000 in the aggregate if the underwriters’ option to purchase additional units is exercised in full) by our sponsor in a private placement that will close simultaneously with the closing of this offering;

 

“private placement warrants” are to the warrants issued to our sponsor in the Private Placement;

 

“public shares” are to shares of our Class A common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market);

 

“public stockholders” are to the holders of our public shares, including our sponsor, officers and directors to the extent our sponsor, officers or directors purchase public shares, provided that each of their status as a “public stockholder” shall only exist with respect to such public shares;

 

“sponsor” are to Blueprint Health Merger Sponsor LLC, a Delaware limited liability company;

 

“underwriters’ option to purchase additional units” are to the underwriters’ 45-day option to purchase up to an additional 3,000,000 units to cover over-allotments, if any;

 

“warrants” are to our warrants sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market) and the private placement warrants;

 

“warrant exercise date” are to the date on which the warrants will become exercisable, which is the later of 30 days after the completion of our initial business combination and 12 months from the closing of this offering;

 

“warrant expiration date” are to the date on which the warrants expire, which is five years after the completion of our initial business combination or earlier upon redemption or liquidation; and

 

1

 

 

“we,” “us,” “company” or “our company” are to Blueprint Health Merger Corp. , a Delaware corporation.

 

Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their option to purchase additional units and the forfeiture by our sponsor of 750,000 founder shares.

 

Introduction to Blueprint Health Merger Corp.

 

A decade ago, a group of visionary entrepreneurs and investors came together in New York City to launch a first-of-its-kind digital health community called Blueprint Health. Passionate about making a difference by improving people’s health and with conviction that advances in technology were unleashing a disruptive force that would revolutionize healthcare, this team set out to construct a platform for innovation and business creation. While building a respected brand in healthcare, they successfully rallied hundreds of innovative healthcare executives, attracted $500 million dollars of investment capital, and helped build over eighty digital health companies that created over $2 billion dollars of enterprise value. Blueprint Health successes include companies like Lumere (acquired by Global Healthcare Exchange, “GHX”), Digital Surgery (acquired by Medtronic), Doctor.com (acquired by Press Ganey), DocASAP, RubiconMD, Avail, Health Recovery Solutions, Andros, Artemis Health, and Healthify. Over the years, the Blueprint Health network – its founders, investors, mentors, and portfolio company principals – have created and led enterprises that not only scaled rapidly and returned significant capital to shareholders but also transformed their respective verticals, positively influencing the wellbeing of millions of people around the world. Along the way, this group of digital health innovators has amassed unrivaled knowledge, experience, and connections that continue to power many large, market-leading companies in healthcare today. For example, individuals in the Blueprint Health network have helped found and lead prominent companies including Phreesia, Teladoc, Everyday Health, Best Doctors, Kryuus, Liazon, and Zocdoc.

 

Blueprint Health Merger Corp. (“BHMC”) seeks to draw on the past experience of the Blueprint Health founders. BHMC, led by Dr. Rajiv Kumar, Mathew Farkash, Dr. Brad Weinberg, and Neil Parikh, will leverage the management team’s expertise and connections to successfully partner with the next generation of transformative digital health companies. BHMC will seek to invest in digital healthcare businesses that will benefit from being public in the acceleration of their value-creation strategies. We believe BHMC is uniquely positioned to engage with a high volume of potential investment opportunities sourced through our management team’s network of existing relationships, including Blueprint Health’s portfolio companies and their founders, venture capital and private equity firms that are part of our investment network, health plans and health systems that have previously partnered with us, and the Blueprint Health Advisory Network.

  

The BHMC Opportunity

 

When Blueprint Health was first launched in 2010, digital health was an emerging concept. The first cohort of digital health companies were promising but had yet to prove their ability to scale efficiently, drive widespread adoption, and capture significant market share from healthcare incumbents. They faced significant challenges such as a lack of proven efficacy, byzantine regulatory hurdles, unclear reimbursement pathways, and low adoption of digital health tools by consumers, employers, payers, and providers. A decade later, many digital health solutions have published clinically significant outcomes, achieved CDC-recognition or even FDA approval, become reimbursable as a medical claim, and climbed the rankings of the most-downloaded mobile applications by consumers. Self-insured employers, health plans, and health systems have enthusiastically embraced digital health platforms and programs as they seek to improve the patient experience, optimize workflows, and rein in soaring costs. These profound changes have led to a coming-of-age moment in the digital health space, as evidenced by companies that have gone public like Teladoc, Phreesia, GoodRX, Livongo, Amwell, Accolade, One Medical, and Peloton, who have demonstrated the wide reach and transformative impact of digital health.

 

2

 

 

These companies represent just the tip of the digital health iceberg. A large and growing cohort of businesses are developing innovative new models, rapidly acquiring customers, disrupting industry incumbents, and voraciously capturing market share. While these market leaders were already benefiting from major industry tailwinds, COVID-19 has acted as a catalyst that has spurred further acceleration of growth and adoption. As the digital health industry expands, we believe the number of high-quality businesses that deserve to be public companies will continue to rise rapidly, and that these public companies will scale their platforms in part through acquisitions. Recent examples include Teladoc’s acquisition of Livongo to create a virtual care and chronic condition management platform as well as Accolade’s acquisition of 2nd.MD to nearly double their addressable market and complement their healthcare navigation suite. As digital health companies seek larger amounts of investment capital to scale their businesses, look to capitalize on strategic M&A opportunities, and strive to provide liquidity for employees and investors, going public through a digital health-focused Special Purpose Acquisition Company (“SPAC”) represents a unique and promising pathway.

 

The Digital Health Opportunity

 

The COVID-19 crisis exacerbated longstanding issues of access within our existing healthcare infrastructure and traditional care models. As a result, we have witnessed accelerated demand for convenient digital health solutions, leading to expanded innovation and a key shift in the healthcare landscape. The enormous digital health category represented a $350 billion opportunity in 2019, which McKinsey estimates will grow at least 8% annually through 2024. Digital health companies provide enterprises and consumers with technology-based solutions to improve the patient experience and reduce healthcare costs. Key pillars of the digital health space, including technology-centric primary care, telemedicine, wearable devices, artificial intelligence, and analytics, target a growing audience with large, unmet needs.

 

In response to the soaring demand for digital health solutions, Rock Health estimated venture capital funding for digital health companies reached an all-time high in 2020 of $14.1 billion, more than double the total amount of funding in 2019. Ten digital health categories saw their highest funding years ever, and the same enthusiasm translated into public markets. Mercom Capital Group noted 2020 as the biggest year for digital health IPOs, with six companies raising over $6 billion. Since the beginning of 2020, there have been eight announced or closed SPAC transactions with healthcare technology companies totaling over $25 billion. Accompanying accelerated activity in capital markets, large healthcare incumbents and technology giants have made significant investments acquiring assets that extend their footprint in the healthcare ecosystem – the top 20 digital health M&A transactions in 2020 totaled $50 billion.

 

Underlying all of this growth, we believe there are five major catalysts driving digital health that make this an attractive opportunity:

 

Consumerization of Healthcare

Increasing patient cost sharing and better technology have contributed toward patients engaging with digital health platforms to better inform their financial and personal health decision-making. Similarly, employers are seeking solutions that help their employees navigate the complex healthcare landscape.

 

Massive COVID-19 Tailwinds

COVID-19 has caused a dramatic shift in consumer and enterprise behavior. Patients, providers, and payers have been forced to rapidly adopt telemedicine and other technology-enabled services as a first line of care. For example, a survey of specialists conducted by GlobalData found that fewer than half of cardiology, gastroenterology, pulmonology, and respiratory specialists used telehealth before COVID-19, but almost 80% embraced the technology during the pandemic. Express Scripts, a large pharmacy benefit manager, noted far greater adoption of digital tools and apps for pharmacies, with a 47% increase in average refills per week via the Accredo mobile app. We expect this level of activity and comfort from providers and consumers to continue and accelerate in the post-COVID-19 world.

 

3

 

 

Data Liquidity

The ability to access and utilize data has grown in importance and become the backbone of digital health offerings. Importantly, increased data liquidity allows for more sophisticated analytics, longitudinal patient understanding, and real-time interventions, enabling more coordinated care and better outcomes.

 

Proven Efficacy, Scalability, and Return on Investment

As healthcare costs and outcomes become increasingly important with the continued shift to value-based care paradigms, digital health solutions have proven their ability to produce ROI and improve patient outcomes while also utilizing technology infrastructures that are immensely scalable. A review by Becker’s Healthcare found that more than 75% of hospitals and health systems have implemented at least one advanced digital health tool, ranging from virtual care to the use of analytics and artificial intelligence. Similarly, payers have readily adopted digital health platforms to automate activities, such as data processing and collection, which saves 35-40% in administrative and medical costs according to McKinsey.

 

Regulation and Reimbursement Mechanisms

Government agencies, which dictate how money and data flow, greatly influence digital health adoption. On the reimbursement front, Centers for Medicare & Medicaid Services (“CMS”) and other government agencies have demonstrated a commitment to digital health and virtual care through telehealth payment policies during the pandemic. On data interoperability, CMS released final data blocking regulations last year requiring Electronic Health Record (“EHR”) vendors to make patient data more available via application programming interfaces (“APIs”), unlocking an impediment to innovation.

 

Areas of Focus

 

Based on the experience and expertise of the Blueprint Health network, we have identified key areas of focus. We believe our platform is uniquely positioned to source companies, conduct due diligence, and add ongoing operating value in these areas.

 

Enterprise-First Companies

 

Engagement

At the core of digital health is the ability to engage patients at every point across their healthcare journey. Solutions increasingly incorporate better understanding of patient behavioral and utilization patterns to enhance user engagement with more convenient and effective modalities. Technologies like Artificial Intelligence (“AI”) have also enabled various digital health companies to fill key gaps for enterprises that are lacking in patient engagement.

 

Navigation
Several types of companies help patients, health plan members, and/or employees navigate the complexities of the healthcare ecosystem. This category includes digital health program aggregators and marketplaces, benefits navigation platforms, and care guidance tools (e.g. cost transparency, provider search, second opinion, and decision support).

 

Wellbeing
Wellbeing solutions continue to gain popularity and adoption as consumers seek to take personal responsibility for their own health. We will be targeting solutions that include nutrition, weight loss, physical activity, and stress management programs sold to employers, health plans, and providers.

 

4

 

 

Digital Therapeutics
Digital therapeutics are condition-specific health interventions that help an individual manage or reverse their illness. As they continue to prove that they can replicate and often improve upon the outcomes delivered by in-person, onsite health interventions, and in some cases medications, these solutions continue to be rapidly adopted by enterprises. Digital therapeutics continue to expand in their use cases across various specialty and chronic conditions.

 

Mental Health Services
Telemedicine has de-stigmatized and increased access to behavioral health programs and mental health therapy. A growing global mental health epidemic, further exacerbated by COVID-19, is driving demand for these solutions.

 

Artificial Intelligence
Personalization is one of the key elements for driving sustained engagement in digital health solutions. Machine learning is enabling these programs and platforms to provide unique and increasingly more effective user experiences including for personalized medicine. Additionally, AI is being used more effectively across larger data categories and incorporating evidence based guidelines to optimize and enhance care recommendations and workflows in all settings of care.

 

Advanced Data/Analytics
From medical records and claims data to wearable health devices and social determinants of health data, digital health companies have access to a massive amount of information about an individual’s health and behaviors. Several exciting companies are harnessing this data to provide critical and actionable insights for employers, health plans, life sciences, and providers.

 

Provider Tools
A large cohort of companies is improving upon the patient and provider experience in clinical settings by developing new clinical decision-making solutions, administrative workflow optimization tools, and patient communication platforms.

 

Consumer-First Companies

 

Pharmacy
Digital pharmacies are pioneering same-day medication delivery for customers. These companies make it easier for patients to quickly get the medications they need, coordinate refills and renewals, and help patients better understand out-of-pocket costs. Some have combined telemedicine and pharmacy to meet more of their patients’ needs.

 

Telemedicine
Virtual medical care has become ubiquitous during the COVID-19 pandemic, and patients will continue to leverage these services in the future. We plan to explore new angles within the telemedicine space, including platforms that target specific conditions or populations.

 

Primary Care

Software is empowering a new generation of primary care clinics to provide a superior patient experience when it comes to scheduling, billing, medical record access, virtual visits, and provider-patient communication.

 

Insurance
The consumer experience of purchasing health insurance is notoriously painful and difficult. Online insurance platforms are disrupting the industry by reducing the cognitive load on consumers and guiding them to select the right plan based on their specific needs as well as providing more advanced technology solutions that engage and inform consumers regarding their ongoing care utilization.

 

Wellbeing

Consumers have demonstrated an insatiable appetite for digital-first nutrition, physical activity, weight loss, meditation, and sleep solutions that improve their overall sense of wellbeing.

 

5

 

 

Wearables and Remote Monitoring

While the first generation of fitness wearables were limited in scope and engagement, the next generation has shown that broader capabilities combined with engaging app experiences can attract consumers and change behavior in a sustainable way. The increasing quality of data from these wearables are enabling clinical capabilities as witnessed by the latest Apple Watch’s ECG functionality. In addition, there are increasingly sophisticated solutions that provide methods of collecting more specific and deeper patient information that enhance exams and other direct patient engagement solutions.

 

Strategy and Competitive Advantages

 

Our strategy is to identify and complete our initial business combination with a company that complements the experience of our management, board of directors, and advisory group and that can benefit from their operational expertise. Our selection process will leverage our team’s broad and deep relationship network, unique industry experience and proven deal sourcing capabilities to access a broad spectrum of differentiated opportunities. We intend to capitalize on the following competitive strengths in our pursuit of a target business:

 

Proprietary Network & Relationship Driven Target Sourcing

Given the extensive network of the BHMC management team, our Blueprint Health Advisory Network, and our board of directors, we will have a highly proprietary sourcing engine from which we will proactively search for a potential acquisition. These individuals can put us in direct contact with nearly any company doing business in healthcare. Our experience in managing a network of advisors will enable us to leverage these relationships to gain unique insights and access into our target companies.

 

Operating Expertise

Our management team, Blueprint Health Advisory Network, board of directors, and strategic partners have invested in over 200 companies. We believe our experience in founding, running, scaling, and investing in companies will make us the ideal partner to companies. Our experience includes customer and sales strategy, marketing and public relations, technology development, finance, recruiting and human resource, and capital markets strategy. In addition to our management team, we will leverage the members of our board of directors and Advisory Network to help scale and assist the company with continued growth post-merger.

 

Marketing, Public Relations, Customer Acquisition, and Sales

Our management team has extensive experience in marketing and public relations, and we believe this will uniquely help our target company during the merger and post transaction. We will assist our target in developing a compelling narrative around operations and growth to be easily digestible by public markets and potential customers. We also have an extensive network of best-in-class marketing and public relations partners that we have worked with in the past and are able to call upon to assist our company. Additionally, our team, advisors, and board are uniquely qualified to assist our target company with business development and sales strategy as they grow into new markets.

 

Healthcare and Technology Expertise

Our management team has a combined more than three decades of experience operating and investing in healthcare and technology companies. We are positioned to source, diligence, and complete a merger with a target company. We believe our experience using technology to improve business performance will yield superior results for our shareholders.

 

Our Management Team

 

Our executive officers include our Chief Executive Officer Dr. Rajiv Kumar, our Director Neil Parikh, our President Mathew Farkash, and our Chief Operating Officer and Chief Financial Officer Dr. Brad Weinberg.

 

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Dr. Rajiv Kumar, our Chief Executive Officer and Director, previously served from 2016 to 2020 as Chief Medical Officer of Virgin Pulse, a private equity-backed software-as-a-service company in the enterprise digital health space, where he was a key member of the executive leadership team and worked closely with the Chief Executive Officer and board of directors on company vision, strategy, and M&A. His responsibilities included serving as President of the Virgin Pulse Institute and leading corporate development, data analytics, and the company’s Science Advisory Board. During his tenure at Virgin Pulse, the company grew to be the dominant player in the employee health and wellbeing industry, reaching approximately $300 million in annual revenue in 2020 and executing on nine M&A transactions totaling nearly $1 billion in enterprise value. Prior to Virgin Pulse, from 2006 to 2016, he was the co-founder and Chief Executive Officer at ShapeUp, a venture capital-backed software-as-a-service company acquired by Virgin Pulse in 2016. Dr. Kumar is a member of the board of directors of Providence Mutual, the nation’s fifth oldest insurance company. He is also an Entrepreneur-in-Residence at Cue Ball Capital, a venture capital firm based in Boston, MA. Dr. Kumar was an early investor and mentor at Blueprint Health, and he continues to invest primarily in digital health companies, leveraging his extensive experience in enterprise software and services. He holds an MD from the Brown University School of Medicine and a BA in business economics also from Brown University.

 

Neil Parikh, our Director, will be designated as Vice Chairman of the Board upon the closing of this offering. Mr. Parikh co-founded, and now serves as a Director of, Casper Sleep Inc, which he helped grow from inception in 2014 to IPO. He served as Casper Sleep’s first Chief Operating Officer and subsequently as its Chief Strategy Officer until January 2021. Casper was one of the fastest growing Direct to Consumer brands ever, reaching revenues of $1 million in their first month, $100 million in their first calendar year, and over $1 billion since its inception. Mr. Parikh worked across the business from business development, operations, supply chain, customer service, as well as marketing and public relations. Mr. Parikh has also served as an investor or advisor to 100+ disruptive technology companies including Hyliion (NYSE: HYLN), Relativity Space, Ro, Affirm (NASDAQ:AFRM), Oura, Care/Of, and Simulate Brands. He holds a BA in Commerce, Organizations, and Entrepreneurship from Brown University, where he was Class President. Mr. Parikh is also a co-author of seven patents, ranging from mattresses to robotics.

 

Mathew Farkash, our President, is a founding partner of Blueprint Health, an early-stage healthcare investment firm that has invested in over 80 digital health companies, since 2011. Blueprint Health portfolio companies have raised over $500 million in investment capital and have generated over $2 billion in cumulative enterprise value. At Blueprint Health, he created and managed the Blueprint Health Mentor & Advisor Network, which was a group of 200 healthcare & technology executives and investors who helped accelerate the growth of their portfolio companies and provided access to decision makers across the healthcare industry. Since 2018, Mr. Farkash has also served as an advisor to Epsilon Health Investors, a healthcare-focused strategic investor, supported by and organized for a consortium of five leading regional not-for-profit health systems across eight states and including 29 hospitals, 450+ non-acute sites of care and $7B+ in net patient revenue. From 2017 to 2018, he served as the Interim Vice President of Strategy and Business Development at Touch Surgery, a Blueprint Health Portfolio Company and helped them raise their private financing rounds and refine and execute their US & global commercial plan prior to their acquisition by Medtronic. Mr. Farkash is an international speaker having presented in Beirut, Copenhagen and Dubai on topics like entrepreneurship, innovation and resiliency. He is also a visiting faculty member on digital health entrepreneurship at Università della Svizzera italiana. He holds an MBA from NYU Stern School of Business and a BA in Public and Private Sector Organizations from Brown University.

 

 

Dr. Brad Weinberg, our Chief Financial Officer and Chief Operating Officer, is a founding partner of Blueprint Health, an early-stage healthcare investment firm that has invested in over 80 digital health companies, since 2011. Blueprint Health portfolio companies have raised over $500 million in investment capital and have generated over $2 billion in cumulative enterprise value. Prior to Blueprint Health, from 2006 to 2011, he was the co-founder and Chief Technology Officer at ShapeUp, a venture capital-backed software-as-a-service company acquired by Virgin Pulse in 2016. Prior to ShapeUp, from 2003 to 2005, he served as a senior investment analyst at the Brown University Endowment. He holds an MD from the Brown University School of Medicine and a BA in business economics also from Brown University. He is a CFA charterholder and a member of the CFA Institute.

 

Our Independent Directors

 

In addition to Dr. Kumar and Mr. Parikh, three additional individuals have agreed to serve on our board of directors as independent directors following the completion of this offering.

 

Richard J. Harrington, Former President & CEO of Thomson Reuters Corporation; Former Member of the Board of Directors at Aetna and Xerox Corporation

 

Richard J. Harrington, our Chairman nominee, is the former President and Chief Executive Officer of The Thomson Reuters Corporation. As CEO from 1997 to 2008, he led its transformation from a diverse newspaper holding company into the leading global provider of online business information, software, and services—including healthcare information services. During his tenure he quadrupled the cash flow and market value of the company and created one of the world’s largest business-to-business information media companies. Mr. Harrington led more than $60 billion in acquisitions and disposals, with two of the most well-known acquisitions being Reuters and Westlaw. He previously held a number of senior leadership positions within Thomson Corporation since 1982.

 

Mr. Harrington served on the board of directors of Aetna from 2008 to 2018. He also served on the board of directors of Xerox Corporation from 2004 to 2017. During his time at Aetna and Xerox, he was involved in over $100 billion in acquisitions. Mr. Harrington is currently the Chairman Emeritus and Senior Advisor at Cue Ball, a Boston-based venture capital group.

 

Mr. Harrington has received many honors during his career, including the “Legend in Leadership” award from Yale University, the CEO of the Year award from the Executive Council, and the “Man of the Year” award from the National Executive Council for his many philanthropic activities. He was formerly the Chairman of the Thomson Reuters Foundation. He is also a New York Times best-selling co-author of Heart, Smarts, Guts and Luck. Mr. Harrington began his professional career with Arthur Young & Co., where he became a licensed C.P.A. He is a graduate of University of Rhode Island, where he was also awarded an honorary doctorate degree.

 

Mark Blake, Global Head of Strategy & Corporate Development, S&P Global; former EVP of Strategy and Corporate Development at Cardinal Health

 

Mark Blake, our director nominee, joined S&P Global, Inc. in 2017 as the Global Head of Corporate Development, and became Global Head of Strategy and Corporate Development in early 2020. Mr. Blake previously served as EVP of Corporate Development at Nielsen from 2014 to 2017 and EVP of Strategy and Corporate Development at Cardinal Health from 2009 to 2014. As the enterprise transaction leader of three industry-leading corporations, over the past eleven years Mr. Blake has been involved in nearly 100 acquisitions, investments and divestitures with a total value of more than $50 billion.

 

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In his current role, Mr. Blake is responsible for developing the strategy for overall company growth, sourcing acquisition opportunities, executing transactions and cultivating strategic relationships. He also leads S&P Global Ventures fintech investing for the company. Mr. Blake led the transaction to acquire key ESG assets from RobecoSAM in 2019, was instrumental in the acquisition of artificial intelligence and machine learning provider Kensho in 2018, and played a key role in S&P Global’s recently announced $44 billion merger with IHS Markit.

 

Mr. Blake has almost a decade of experience in healthcare from his tenure at Cardinal Health, a leading healthcare distributor and services provider, and Medco Health Solutions, a leading pharmacy benefit manager that is now part of Express Scripts. At these companies he completed partnerships and transactions in distribution, sourcing, digital health, and healthcare services.

 

Mr. Blake’s additional work experience includes turnaround consulting and investment banking. He received a bachelor’s degree in Government from Harvard College and an MBA in Finance and Accounting from the Wharton School of Business. Mr. Blake also serves on the board of WhyHunger, a charitable organization that focuses on addressing the root causes of hunger and food insecurity.

 

Rachel Winokur, Chief Executive Officer of NeueHealth

 

Rachel Winokur, our director nominee, is a seasoned operator and investor with years of experience in health care. She currently serves as the Chief Executive Officer of NeueHealth, the care delivery, provider enablement, and network management business within Bright Health Group, a role she has held since 2020. As CEO of NeueHealth, Ms. Winokur leads the company’s expansion into new geographies, including all of its health system and provider relationships, as well as oversees all of Bright Health’s owned and affiliated provider organizations, including a full platform of provider enablement and risk management solutions. Ms. Winokur helped found Bright Health in 2016 as its Chief Business Officer, where in addition to the above responsibilities, she also had accountability for mergers, acquisitions, fundraising, and overall business strategy.

 

Before joining Bright Health, Ms. Winokur worked for Aetna as a senior executive from 2011 to 2015 where she helped found and lead Healthagen, Aetna’s payer-neutral population health management business. Prior to Aetna, Ms. Winokur worked for the Carlyle Group from 2007 to 2011 as a health care private equity investor. Her previous experience includes roles at Datascope from 2003 to 2007, Bertelsmann from 1999 to 2003, and Goldman Sachs from 1994 to 1997.

 

Ms. Winokur currently sits on the board of Maven and is an advisor to Greycroft Partners and Primetime Partners. She holds an MBA from Stanford University’s Graduate School of Business and a Bachelor of Science in Engineering, with honors in both biomedical and electrical engineering, from Duke University.

 

The Blueprint Health Advisory Network

 

In addition to our management team and board of directors, a group of advisors will help us identify and conduct diligence on a target company, as well as assist the target company with business development post-merger. This group consists of individuals that the management team has generally known and worked with in the past and have proven to be immensely helpful in unlocking value for our portfolio companies.

 

We expect our Blueprint Health Advisory Network to:

 

Assist in sourcing and negotiations with potential targets

 

Provide industry, customer, and market insights when identifying and assessing potential companies

 

Assist our management team with diligence efforts

 

Help create value for a target company through assistance with strategy, operations, and business development

 

In this regard, our special advisors will fulfill some of the same functions as our board members; however, they will not owe any fiduciary obligations to us nor will they perform board or committee functions or have any voting or decision-making capacity on our behalf. They will also not be required to devote any specific amount of time to our efforts. While certain of our advisors are members of our sponsor, none of our advisors have any employment, consulting fee or other similar compensation arrangements with us.

 

Our group of advisors includes:

 

Ana Gupte, Ph.D, Former Chief Strategy and Innovation Officer at Florida Blue Cross Blue Shield & GuideWell

 

Dr. Gupte is a Strategy, Finance and Innovation Leader and Principal Advisor with over two decades of experience in the field of Healthcare Services, Digital Health and Therapeutics. Dr. Gupte is a former Healthcare Equity Analyst with over a decade on Wall Street bookended by senior Corporate Strategy, Finance & Management Consulting roles. Most recently, she served as Senior Vice President, Chief Strategy & Innovation Officer at Florida Blue Cross Blue Shield & its parent GuideWell. Prior to the Street, she served as Managing Director Corporate Strategic Planning at Aetna, Inc, and also headed up the WorldWide Drug Development Strategy Department at Pfizer. She started her career in healthcare as a Management Consultant at McKinsey & Company. Her thought leadership on all things healthcare over 12 years of equity coverage in the firms of Sanford C. Bernstein, and Leerink Partners garnered multiple awards including Top 3 rankings by All America Institutional Investor and the FT StarMine Top Stock picker award. Her current efforts are focused on advising privately backed healthcare tech enabled services and digital health companies leveraging Data Science, Predictive Analytics, AI, ML, RPM, IoT and Blockchain to solve critical problems in healthcare, where she brings differentiated knowledge about the Payor, provider and Pharma R&D end markets to bear.

 

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Anthony Tjan,  Co-Founder and CEO of Cue Ball Group, Co-Founder and Executive Chairman of MiniLuxe

 

Anthony Tjan is the CEO of the Cue Ball Group, an evergreen investment firm based in Boston. His experience includes serving as the former Executive Chairman of ShapeUp, on the prior boards of Virgin Pulse and TB12, and currently as Chairman of WaitWhat, the producers of Meditative Story, the highly-popular mindfulness podcast. He has led investments in the caregiving sector (e.g. IanaCare and Helpr), enterprise health productivity (e.g. Sopris Health and ProofPilot), and wellness (e.g. Athena Club and MiniLuxe). Prior to Cue Ball, Mr. Tjan served as the Chief Strategic Advisor to Richard Harrington (former CEO of Thomson Reuters Corporation), where he helped drive the organization’s transformation including advising on several aspects of its enterprise health care information businesses and numerous mergers and acquisitions. Mr. Tjan started his career at McKinsey working primarily in its health practice and media and technology practice. He was the Vice Chairman of the Parthenon Group for 15 years. His non-profit activity includes serving on the MIT Media Lab Advisory Council and the advisory boards of both the Cure Alzheimer’s Fund and the McCance Center for Brain Health at Massachusetts General Hospital. Mr.Tjan is a New York Times best-selling author, and has written over 100 articles for Harvard Business Review and in 2018 he received the Ellis Island Medal of Honor.

 

Aran Ron, MD, Former President and Chief Operating Officer of Group Health Inc / Emblem, Former Chief Medical Officer of Oscar Health Plan

 

Dr. Ron is a physician trained in internal medicine at New York Hospital and the former President and Chief Operating Officer of Group Health Inc/Emblem, Medical Director at Oxford Health Plan and at New York Downtown Hospital. He served as CEO of Partners Health Plan (a special needs MLTC plan), an Operating Partner at Bessemer Venture Partners and was part of the founding team and Chief Medical Officer of Oscar Health Plan. He has published articles in medical journals, served on local and national committees such as URAC and on non-for profit boards St. Christopher Inc and Metropolitan Council on Poverty as well as lectures at Cornell Medical College and Columbia Business School. He recently co-founded Kaden Health – a virtual telemedicine company focusing on treating patients with opioid disorders. He is an investor, board member and consultant to various early stage companies and has participated in several fundraising rounds and exits including Data Driven Delivery System, Pricefalls, Accuity Driven Systems, Nalari, Oscar, ControlRad, Capsule, Epicured, as well as an advisor and LP to Israel BioMed Fund and LifeForce Capital Fund.

 

Benjamin K. Chu, M.D., MPH, MACP, Board Member for Geisinger Health System; former CEO of the Memorial Hermann Health System and former Group President for Kaiser Permanente’s SoCal and Georgia regions

 

Dr. Chu has more than four decades of healthcare experience as a clinician, administrator and policy advocate placing strong emphasis on physician integration, population health and health systems innovation to drive for better outcomes and performance. In January 2018, Dr. Chu joined the Health Practice at Manatt, Phelps and Phillips and is currently a senior advisor with the firm. Prior to this, Dr. Chu has served in many senior level leadership positions including: President and CEO of the Memorial Hermann Health System; Executive Vice President and Group President for Kaiser Permanente’s Southern California and Georgia regions; President of the New York City Health and Hospitals Corporation; Senior Associate Dean at the Columbia College of Physicians and Surgeons; and Vice President; Associate Dean at the NYU School of Medicine; and Acting Commissioner of Health for the New York City Department of Health.

 

Dr. Chu currently serves on the Boards of the National Committee for Quality Assurance and the Geisinger Health System. In 2015 he was elected to the National Academy of Medicine. He has served on the Boards of the American Hospital Association (Chair in 2013); The Joint Commission; the Commonwealth Fund; and the American Legacy Foundation.

 

Brian J. Marcotte, Former President and CEO of Business Group on Health

 

Brian Marcotte is the former President and CEO of Business Group on Health, the leading advocate for large employers in healthcare policy and benefits strategy. At the Business Group, Mr. Marcotte established the Health Innovations Forum, which helped accelerate market traction for promising digital health startups, and the Executive Committee on Value Purchasing, a cross-industry council focused on shifting the market toward value-based pricing and provider accountability. Prior to the Business Group, Mr. Marcotte was Vice President of Compensation and Benefits for Honeywell International with responsibility for executive compensation, global compensation and benefit programs, and implementing innovative solutions to manage the company’s $500M annual health care spend while helping employees maximize their experience with the healthcare delivery system. Mr. Marcotte is currently working in a board or advisory capacity with Carrot Fertility, Castlight Health, Consumer Medical, Sword Health, Socrates AI, WithMe and UdoTest.  

 

Chip Kahn, President and CEO of the Federation of American Hospitals

 

Since June 2001, Chip Kahn has served as President and CEO of the Federation of American Hospitals, the national advocacy organization for tax-paying hospitals, representing nearly 20% of all U.S. hospitals. In 2016, he was appointed the co-chair of the Measure Applications Partnership (MAP) Coordinating Committee of the National Quality Forum (NQF), a multi-stakeholder private-public partnership for developing and implementing a national strategy for health care quality measurement. He also is a former member of the NQF’s Governing Board.

 

Additionally, he serves on the National Academies of Sciences, Engineering, and Medicine’s Roundtable on Quality for People with Serious Illness, as a member of the board of directors of AdhereHealth, a medication therapy management company, and on the U.S. Executive Council for the Center for Digital Innovation (CDI). He is also a founding member and co-chair of the newly formed Future of Health (FOH) community bringing together senior leaders from leading health organizations around the world. Previously, Mr. Kahn served as a principal of the former Hospital Quality Alliance (HQA) and as Commissioner of the American Health Information Community, a former federal policy advisory panel advising then-HHS Secretary Michael Leavitt about the diffusion of health information technology.

 

Christina LaMontagne, Former COO of Pill Club

 

Christina LaMontagne is a health technology leader with over 15 years of experience scaling consumer-facing companies and leading critical business functions. Her specialties include operations, business development, investments, team building and M&A. As COO at Pill Club, a leading women's health start-up, from 2020 to 2021, Ms. LaMontagne helped grow the business to over $100M in profitable ARR. Previously she was an early employee at NerdWallet from 2013 to 2017, where she held multiple senior roles as the company rapidly scaled to >$100M in annual revenue across multiple business units. She has also led digital M&A at Johnson & Johnson and was one of the earliest institutional digital health investors at VC firm Physic Ventures. 

 

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Dunston Almeida, Former Head of Strategy and M&A at Zelis Healthcare and eviCore

 

Dunston Almeida is a private healthcare investor focused on digital health and healthcare service businesses. Mr. Almeida formerly served as Executive Vice President of Strategy, Product Development and M&A at Zelis completing over $40 billion worth of Merger and Acquisition transactions over the past 10 years. From 2013 to 2018, he served as Executive Vice President of Strategy and Business Development at eviCore, the largest medical benefit manager sold to Express Scrips for $3.6 billion. Before that from 2010 to 2013, Mr. Almeida headed up Emerging Markets strategies at Medco, a leading pharmacy benefit manager which was acquired by Express Scrips for $33 billion. He also serves on the Board at PurpleLab, a provider of real-word evidence medical and pharmacy claims analytics for payers, life sciences and genomics companies.

 

Errol Pierre, Senior Vice President of State Programs at Healthfirst, Inc

 

Errol Pierre is the Senior Vice President of State Programs at Healthfirst, Inc, the largest non-profit health plan in New York State serving 1.6 million members. Prior to Healthfirst, Mr. Pierre spent over 12 years at Empire BlueCross BlueShield where he held various leadership roles in Sales and Strategy until leaving the company as the Vice President and Chief Operating Officer in 2019. Lastly, he is an adjunct professor at New York University teaching various courses for in Healthcare and Business.

 

Lisa Prasad, Chief Innovation Officer for the Henry Ford Health System

 

Lisa Prasad is the Chief Innovation Officer for the Henry Ford Health System where she has successfully created and driven the institution’s strategy for leveraging technology, intellectual property, and clinical expertise – all designed to improve quality and access of patient care, create value for the institution and its partners, and foster economic development. She has led the System’s successful entry into international markets with hospital projects in the Middle East and India that have created a future revenue pipeline of over $250 million. She also oversees the Global Technology Program that partners with early stage companies in Israel and India and attracts them to the U.S. for the benefit of local patients and clinicians. Previously, she has served as an executive at the University of Pennsylvania managing $170 million operating budget as well as $200 million in annual capital projects.

 

Lorna Friedman, Senior Partner at Mercer

 

Dr. Lorna Friedman is a Senior Partner with Mercer’s Global Benefits Services with extensive experience designing health solutions, a role she has held since 2017. Previously, Dr. Friedman was the Director of Health Benefits for Bupa Global from 2015 to 2017, where she oversaw health and network operations across 90 countries. Prior to that, she was a Partner in Mercer’s Global Health Management practice from 2010 to 2015. Her business career includes 20 years at both domestic and international health plans including Medicare and Medicaid. Dr. Friedman trained in Pediatrics at The Children’s Hospital of Philadelphia. She has held academic and teaching positions at University of Pennsylvania and Cornell Medical College and received an MBA from Columbia University. Dr. Friedman has published and presented on issues regarding public health at the HLTH conference, The Institute of Medicine, the Agency for Health Care Quality and Research, and the International Aids conference among others. Dr. Friedman has served on several boards with a focus on improvising access to health including the Global Business Group on Health, The American Council on Exercise and the March of Dimes. In 2020 she was named Health Consultant of the Year by Consulting Magazine.

 

Michelle Snyder, Partner at McKesson Ventures

 

Michelle Snyder is currently a Partner at McKesson Ventures, a venture firm investing in the healthcare technology and services space.  She brings over 25 years healthcare industry experience in marketing, business development, strategic planning and general management and is recognized as an early leader in the digital health space. Prior to joining McKesson Ventures, she was the Chief Marketing Officer at Welltok, a leading consumer health activation company. Ms. Snyder was also one of the early executives at Epocrates and worked for over a decade to build the company into one of the most recognized brands among clinicians. Ms. Snyder has also served as an Executive-in-Residence at InterWest Partners and has held consulting and policy positions at The Wilkerson Group, the Lewin Group and the Georgetown Center for Health Policy Studies. 

 

Oliver Kharraz, MD, CEO and Founder of Zocdoc

 

Dr. Kharraz is CEO and founder of Zocdoc, a digital health company streamlining the physician-patient scheduling ecosystem. Prior to Zocdoc, Dr. Kharraz was an Associate Principal at the global management consulting firm McKinsey & Company. During his seven-year tenure at McKinsey & Co., Dr. Kharraz developed and implemented new patient utilization models for the national health services of a number of governments and major hospital chains. Over the course of his wide-ranging career, Dr. Kharraz has accrued comprehensive experience effecting change and building efficiency in large scale healthcare organizations using information technology.

 

Rich Roth, Chief Strategic Innovation Officer for CommonSpirit Health

 

Rich Roth is the Chief Strategic Innovation Officer and Senior Vice President for CommonSpirit Health, the largest non-profit health system in the United States with 142 hospitals and more than 1,000 care centers serving 21 states. Mr. Roth leads CommonSpirit Health’s innovation efforts, which seek to create and test novel services, programs, partnerships, and technologies that challenge the status quo and have the potential to reduce the cost of care, improve quality, and increase access to services. Working in concert with CommonSpirit Health employees and physicians, Mr. Roth anticipates emerging trends and technologies with the goal of incubating, studying, and scaling efforts to improve care. Mr. Roth regularly advises venture capital organizations.. Mr. Roth also serves on the board of Shields Health Solutions, PriMed and Truveta. In 2020, Mr. Roth was named one of the 25 Most Innovative Individuals in the health industry by Modern Healthcare.

 

Sachin H. Jain, MD, MBA, FACP President and Chief Executive Officer SCAN Group and SCAN Health Plan

 

Dr. Jain is the current president and CEO of SCAN Group and Health Plan.  Most recently, Dr. Jain served as president and CEO of CareMore Health and Aspire Health, where he led growth, diversification, expansion and innovation of these companies and they grew to serve over 180,000 patients in 32 states with $1.6B in revenues.

 

Dr. Jain was previously Chief Medical Information & Innovation Officer at Merck & Co. He also served as an attending physician at the Boston VA-Boston Medical Center and a member of faculties at Harvard Medical School and Harvard Business School. From 2009-2011, Dr. Jain worked in the Obama Administration, where he was senior advisor to Donald Berwick when he led the Centers for Medicare & Medicaid Services (CMS), and was the first deputy director for policy and programs at the Center for Medicare and Medicaid Innovation (CMMI).  He has published over 100 peer-reviewed articles in journals such as the New England Journal of Medicine, JAMA and Health Affairs, and was an editor of the book, “The Soul of a Doctor” (Algonquin Press). Dr. Jain is adjunct professor of medicine at the Stanford University School of Medicine and a contributor at Forbes. In addition, he serves on the Board of Directors at Make-A-Wish America.

 

Shelby Decosta, President of UCSF Health Affiliates Network and Chief Strategy Officer of UCSF Health

 

Shelby Decosta is the President of UCSF Health Affiliates Network and Chief Strategy Officer of UCSF Health, an internationally recognized medical institution with more than 1,000 beds, nearly 2 million outpatient visits, annual revenue of over $5 billion, and ranked number one hospital in Northern California and seventh best in the country by U.S. News & World Report.  As the Chief Strategy Officer for UCSF Health since 2015, she is responsible for leading and executing all strategic planning and business development functions. She oversees network development as well as concierge and executive health, managed care, marketing and brand for the health system. Beginning in 2019, Decosta was appointed to serve as President of UCSF Health Affiliates and is responsible for executing contracts, managing relationships, and ensuring the successful operational alignment with UCSF Health strategic priorities.  Prior to this role, she was SVP of Mergers, Acquisitions and Partnerships at Trinity Health. Ms. Decosta also served in various strategic planning roles at Dignity Health including Chief Strategy Officer, Vice President of Business Development & Clinical Integration, and Director of Strategy for the system’s Nevada market and VP Mergers & Acquisitions for the system. Ms. Decosta’s experience also includes Southern California Permanente Medical Group Regional Service and Access.

 

Vin Fabiani, Partner at HLM Venture Partners

 

Vin Fabiani is a partner at HLM Venture Partners, a venture capital firm investing in emerging companies focused on healthcare information technology, digital health, tech-enabled healthcare services and medical devices. His focus is primarily on earlier-stage technology and services companies. He is currently on the Board of IMCS, a leading provider of Cognitive Behavioral Therapy (CBT) to the workers’ compensation market; Array Behavioral Health, a large provider of tele-psychiatric care to hospital systems and primary care clinics; Censinet, an emerging technology company focused on governance, security and compliance for health care provider systems; and ClearDATA, a leader in security and compliance for health care organizations as they transition their technology into the public cloud. He is also currently a Board Observer at Carevive, a technology company focused on improving the cancer patient experience, and meQuillibrium, a digital health company enabling Fortune 500 enterprises navigating through employee resiliency and workforce management. Previously, he was active in the success of Binary Fountain and ArroHealth.

 

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He has been an active investor, mentor and advisor to several enterprises facilitating the development of emerging health care technology and services companies including Blueprint Health, StartUp Health and Healthbox. Some of the companies he has invested in and/or advised include: AidIn, Healthcare Recovery Solutions, CredSimple (now Andros), Luminate Health, Avail Systems (formerly NuRep), RubiconMD, SwipeSense and WellTrackOne among others.

 

Business Combination Criteria

 

In addition to finding a company operating broadly in the digital health space, we have identified the following general criteria and frameworks for evaluating potential business combination targets. While we intend to use these criteria as guidelines during our evaluation process, we may decide to enter into an initial business combination with a target business that does not fit into this criteria.

 

Use of Technology as a Competitive Advantage

We will seek to acquire a business that uses technology at its core to power its services for its customers. We believe the use of technology will enable better health outcomes, reduce costs, and yield superior long-term profitability and customer retention.

Healthcare Platform

The ideal target business has the ability to be a platform upon which other ancillary businesses can be built or acquired. In the complicated world of healthcare, businesses with large client bases constantly search for new solutions to additional client pain points, enabling rapid growth through acquisition and crossover sales. For end customers, this “one-stop-shop” strategy means simplifying the search for access to the best products and care.

Existing and Future Growth

We will focus our search on companies that have had significant revenue growth since inception and have significant revenue and earnings potential through a combination of organic growth and inorganic / synergistic acquisitions.

Financial Characteristics

Our ideal target company has significant growth potential from a revenue and earnings perspective, but also features one or more of the following business/financial criteria: recurring revenue cycles, revenue predictability, long-term contracted revenue, profitable unit economics and high gross margins, favorable payment terms or cash conversion cycles.

Management Team

We intend to acquire a company that has an excellent management team who are ready to run a public company at scale. This team ideally has a mix of high-growth and public markets experience as well as experience in marketing, product and sales strategy, finance, recruiting top talent, and use of technology as a competitive wedge. We believe the ideal team also understands how to simplify the complicated healthcare matrix to create proprietary business opportunities for their company while pursuing a sustainable business strategy. This team must also be focused on long-term value creation when executing on their plan.

Benefit from Being a Public Company

We intend to acquire a company that will benefit from being a public company. We expect that such a company will be able to use the public markets to fuel their growth by using the currency of their stock to acquire other companies or recruit the very best talent. Being a public company may also significantly increase their visibility and credibility among potential clients, employees, and partners.

 

We believe that the network of contacts and relationships of our management team will provide us with an important source of acquisition opportunities. In addition, we anticipate that potential targets will be brought to our attention from various unaffiliated sources, including founders, business leaders, investors, and members of the venture capital community, investment banks and private equity managers. In evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with management and employees, as well as a review of financial, operational, legal and other information which will be made available to us.

 

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We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors, or completing the business combination through a joint venture or other form of shared ownership with our sponsor, officers or directors, or their affiliates. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, officers or directors, our board of directors, or a committee of independent directors, would take appropriate steps to mitigate any perceived conflict of interest including obtaining an opinion from an independent investment banking firm or a valuation or appraisal firm stating that such an initial business combination is fair to our company from a financial point of view.

 

Members of our management team may directly or indirectly own founder shares and/or private placement warrants following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

 

Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities, including our sponsor, or their affiliates, pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. No members of our management team have any obligation to present us with any opportunity for a potential business combination of which they become aware, unless presented to such member solely in his or her capacity as a director or officer of the company. Our management in their capacities as employees of the sponsor or in their other endeavors, may be required to present potential business combinations to other entities, before they present such opportunities to the company. In addition, we may pursue an Affiliated Joint Acquisition opportunity with an entity to which an officer or director has a fiduciary or contractual obligation. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by issuing to such entity a class of equity or equity-linked securities. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as 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 another legal obligation.

 

In addition, our sponsor, officers and directors, or their affiliates, may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.

 

Corporate Information

 

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

 

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In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.

 

We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.

 

Additionally, we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30th.

 

Our executive offices are located at 200 Exchange Street, Providence, RI 02903 and our telephone number is (347) 687-6360. Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this prospectus. You should not rely on any such information in making your decision whether to invest in our securities.

 

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The Offering

 

In making your decision whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled “Risk Factors.”

 

Securities offered   20,000,000 units (or 23,000,000 units if the underwriters’ option to purchase additional units is exercised in full), at $10.00 per unit, each unit consisting of:
     
    •   one share of Class A common stock; and
     
    •   one-third of one redeemable warrant to purchase one share of Class A common stock.
     
Proposed Nasdaq symbols  

Units: “BHMCU”

 

Class A Common Stock: “BHMC”

 

Warrants: “BHMCW”

 

Trading commencement and separation of Class A common stock and warrants  
The units are expected to begin trading promptly after the date of this prospectus. The Class A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus unless Credit Suisse informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Class A common stock and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole warrant.
     
    In no event will the Class A common stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet of our company reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering. If the underwriters’ option to purchase additional units is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ option to purchase additional units.
     
Units:    
     
Number outstanding before this offering:   None.
     
Number outstanding after this offering:   20,000,000(1)

 

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Common Stock:    
     
Number outstanding before this offering:   5,750,000(2)(4)
     
Number outstanding after this offering:   25,000,000(1)(3)(4)
     
Warrants:    
     
Number of private placement warrants to be sold in the Private Placement:  
4,000,000(1)
     
Number of warrants to be outstanding after this offering and the Private Placement:  

10,666,667(1)
     
Exercisability   Each whole warrant offered in this offering is exercisable to purchase one share of our Class A common stock, subject to adjustment as provided herein, and only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade.
     
    We structured each unit to contain one-third of one warrant, with each whole warrant exercisable for one share of Class A common stock, as compared to units issued by some other similar blank check companies which contain whole warrants exercisable for one whole share, in order to reduce the dilutive effect of the warrants upon completion of our initial business combination as compared to units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses.

 

 

 

(1)      Assumes no exercise of the underwriters’ option to purchase additional units and the forfeiture by our sponsor of 750,000 founder shares.

(2)      Consists solely of founder shares and includes up to 750,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ option to purchase additional units is exercised.

(3)      Includes 20,000,000 public shares and 5,000,000 founder shares.

(4)      Founder shares are classified as shares of Class B common stock, which shares will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment as described below adjacent to the caption “Founder shares conversion and anti-dilution rights.”

 

Exercise price   $11.50 per share of Class A common stock, subject to adjustment as described herein. In addition, if (x) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our initial stockholders or their affiliates, without taking into account any founder shares or warrants held by our initial stockholders or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our Class A common stock during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described adjacent to “Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00” and “Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described adjacent to the caption “Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.

 

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Exercise period   The warrants will become exercisable on the warrant exercise date, which is the later of:
     
    •   30 days after the completion of our initial business combination; and
     
    •   12 months from the closing of this offering;
     
    provided in each case that we have an effective registration statement under the Securities Act covering the issuance of the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement).
     
    We are not registering the shares of Class A common stock issuable upon exercise of the warrants at this time. However, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our reasonable best efforts to file with the SEC, and within 60 business days following our initial business combination to have declared effective, a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file, or maintain in effect, a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. The warrants will expire at 5:00 p.m., New York City time on the warrant expiration date, which is five years after the completion of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account.

 

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Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00  

Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
     
    •   in whole and not in part;
     
    •   at a price of $0.01 per warrant;
     
    •   upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the 30-day redemption period; and
     
    •   if, and only if, the closing price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders (the “Reference Value”).
     
    We will not redeem the warrants for cash unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period. Any such exercise would not be on a “cashless” basis and would require the exercising warrant holder to pay the exercise price for each warrant being exercised. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
     
Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00  

Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
     
    •   in whole and not in part;
     
    •   at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption, provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table set forth under “Description of Securities — Warrants — Public Stockholders’ Warrants” based on the redemption date and the “fair market value” of our Class A common stock (as defined below);
     
    •   if, and only if, the closing price of our Class A common stock equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders; and
     
    •   if the Reference Value is less than $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like), then the private placement warrants must also concurrently be called for redemption on the same terms (except as described herein with respect to a holder’s ability to cashless exercise its warrants) as the outstanding public warrants.
     

 

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    The “fair market value” of our Class A common stock for the above purpose shall mean the volume weighted average price of our Class A common stock for the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. We will provide our warrant holders with the final fair market value no later than one business day immediately following when the 10 trading day period described above ends. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 Class A common stock per warrant (subject to adjustment). No fractional shares of Class A common stock will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of shares of Class A common stock to be issued to the holder. Please see the section entitled “Description of Securities — Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00” for additional information. Except as set forth above, none of the private placement warrants will be redeemable by us so long as they are held by the sponsor or their permitted transferees.
     
Election of directors; voting rights   Prior to the consummation of our initial business combination, only holders of our Class B common stock will have the right to vote on the election of directors. Holders of the Class A common stock will not be entitled to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended if approved by at least 90% of our common stock voting at a stockholder meeting. With respect to any other matter submitted to a vote of our stockholders, including any vote in connection with our initial business combination, except as required by applicable law or stock exchange rule, holders of our Class A common stock and holders of our Class B common stock will vote together as a single class, with each share entitling the holder to one vote.
     
Founder shares   In February, 2021, our sponsor subscribed to purchase an aggregate of 5,750,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.004 per share. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of common stock upon the completion of this offering. Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. The purchase price of the founder shares was determined by dividing the amount of cash contributed to us by the number of founder shares issued.  If we increase or decrease the size of this offering, we will effect a stock dividend or a share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the ownership of founder shares by our initial stockholders at 20% of our issued and outstanding shares of our common stock upon the consummation of this offering.
     
    The founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ option to purchase additional units is exercised.

 

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    The founder shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that:
     
    •   only holders of the founder shares have the right to vote on the election and removal of directors prior to the consummation of our initial business combination;
     
    •   the founder shares are subject to certain transfer restrictions, as described in more detail below;
     
    •   our sponsor, officers and directors have entered into letter agreements with us, pursuant to which they have agreed: (1) to waive their redemption rights with respect to any founder shares and public shares held by them, as applicable, in connection with the completion of our initial business combination; (2) to waive their redemption rights with respect to any founder shares and public shares held by them in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within the completion window; and (3) to waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within the completion window (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the completion window). If we submit our initial business combination to our public stockholders for a vote, our initial stockholders, officers and directors have agreed to vote any founder shares and any public shares held by them in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need 7,500,001, or 37.5%, of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination (assuming all issued and outstanding shares are voted and the underwriters’ option to purchase additional units is not exercised) in order to have such initial business combination approved;
     
    •   the founder shares are automatically convertible into shares of our Class A common stock at the time of our initial business combination, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described in more detail below; and
     
    •   the holders of the founder shares are entitled to registration rights.
     
Transfer restrictions on founder shares   Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) if the last sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property (except as described herein under the section of this prospectus entitled “Principal Stockholders — Transfers of Founder Shares and Placement Warrants”). Any permitted transferees will be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up.

 

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    Notwithstanding the foregoing, if we complete a liquidation, merger, stock exchange, reorganization or other similar transaction after our initial business combination that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property, the founder shares will be released from the lock-up.
     
Founder shares conversion and anti-dilution rights  
The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in this offering and related to the closing of our initial business combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the total number of all shares of common stock outstanding upon completion of this offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with our initial business combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination in consideration for such seller’s interest in the business combination target and any private placement warrants issued upon the conversion of working capital loans made to us.
     
Private placement warrants   Our sponsor has subscribed to purchase an aggregate of 4,000,000 private placement warrants (or 4,400,000 if the underwriters’ option to purchase additional units is exercised in full) at a price of $1.50 per warrant ($6,000,000 in the aggregate or $6,600,000 in the aggregate if the underwriters’ option to purchase additional units is exercised in full) in the Private Placement. A significant majority of the purchase price of the private placement warrants will be funded by our management team and certain members of our board of directors and associates of the Blueprint Health Advisory Network. Each private placement warrant entitles the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. A portion of the purchase price of the private placement warrants will be added to the proceeds from this offering to be held in the trust account. If we do not complete our initial business combination within the completion window, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and the private placement warrants will expire worthless. Except as set forth elsewhere in this prospectus, the private placement warrants will not be redeemable by us so long as they are held by our sponsor or their permitted transferees. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold as part of this offering. Our sponsor, as well as their permitted transferees, have the option to exercise the private placement warrants on a cashless basis.
     
Transfer restrictions on private placement warrants  
The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except as described under the section of this prospectus entitled “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants”).

 

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Proceeds to be held in trust account   The rules of the Nasdaq provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the net proceeds we will receive from this offering and the sale of the private placement warrants described in this prospectus, $200.0 million ($10.00 per unit), or $230.0 million ($10.00 per unit) if the underwriters’ option to purchase additional units is exercised in full, will be deposited into a segregated trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee and an aggregate of approximately $2.0 million will be used to pay expenses in connection with the closing of this offering and for working capital following this offering. The proceeds to be placed in the trust account include $7,000,000 (or up to $8,050,000 if the underwriters’ option to purchase additional units is exercised in full) in deferred underwriting commissions. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act and that invest only in direct U.S. government obligations.
     
    Except with respect to interest earned on the funds held in the trust account that may be released to us as described below, the funds held in the trust account will not be released from the trust account until the earliest of: (1) the completion of our initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window or (ii) with respect to any other material provisions relating to the rights of holders of our Class A Common Stock prior to our initial business combination or pre-initial business combination business activity; and (3) the redemption of all of our public shares if we are unable to complete our initial business combination within the completion window, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
     
Anticipated expenses and funding sources   Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except for taxes payable. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act and that invest only in direct U.S. government obligations. Based upon current interest rates, we expect the trust account to generate approximately $200,000 of interest annually (assuming an interest rate of 0.10% per year); however, we can provide no assurances regarding this amount. Unless and until we complete our initial business combination, we may pay our expenses only from loans or additional investments from our sponsor, members of our management team or any of their respective affiliates or other third parties, although they are under no obligation or other duty to loan funds to, or invest in, us, and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination. If we complete our initial business combination, we expect to repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of all loans made to us by our sponsor, an affiliate of our sponsor or our officers and directors may be convertible into warrants at a price of $1.50 per warrant at the option of the lender at the time of the business combination. The warrants would be identical to the private placement warrants issued to our sponsor.

 

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Conditions to completing our initial business combination  
There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm. We will complete our initial business combination only if the post-transaction company in which our public stockholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination transaction. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of Nasdaq’s 80% of net asset test.
     
Permitted purchases of public shares and public warrants by our affiliates  
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation or other duty to do so. Please see “Proposed Business — Permitted purchases of our securities” for a description of how such persons will determine from which stockholders to seek to acquire securities. There is no limit on the number of shares or warrants such persons may purchase, or any restriction on the price that they may pay subject to compliance with applicable law and Nasdaq rules. Any such price per share may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. However, such persons have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. In the event our sponsor, directors, officers, advisors or any of their affiliates determine to make any such purchases at the time of a stockholder vote relating to our initial business combination, such purchases could have the effect of influencing the vote necessary to approve such transaction. None of the funds in the trust account will be used to purchase public shares or public warrants in such transactions.
     

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    If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Prior to the consummation of this offering, we will adopt an insider trading policy which will require insiders to:
     
    •   refrain from purchasing securities when they are in possession of any material non-public information; and
     
    •   to clear all trades with our compliance personnel or legal counsel prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.
     
    We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Our sponsor, directors, officers, advisors or any of their respective affiliates will be restricted from making purchases if such purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
     
    We expect that any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. None of the funds held in the trust account will be used to purchase shares or public warrants in such transactions prior to completion of our initial business combination. Please see “Proposed Business — Permitted purchases of our securities” for a description of how our sponsor, directors, officers, advisors or any of their respective affiliates will select which stockholders to purchase securities from in any private transaction.
     
    The purpose of any such purchases of shares could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Class A common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
     

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Redemption rights for public stockholders upon completion of our initial business combination  

We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest (net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption right will include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify itself in order to validly redeem its shares. Each public stockholder may elect to redeem its public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination.
     
Manner of conducting redemptions   We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either: (1) in connection with a stockholder meeting called to approve the business combination; or (2) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing requirement. Under Nasdaq rules, asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with such rules.
     
    If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
     
    •   conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
     
    •   file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
     

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    Whether or not we maintain our registration under the Exchange Act or our listing on Nasdaq, we will provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above. Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act.
     
    In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
     
    If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other reasons, we will:
     
    •   conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
     
    •   file proxy materials with the SEC.
     
    We expect that a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration.
     
    If we seek stockholder approval, unless otherwise required by applicable law, regulation or stock exchange rules, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders, officers and directors will count towards this quorum and have agreed to vote any founder shares and any public shares held by them in favor of our initial business combination. We expect that at the time of any stockholder vote relating to our initial business combination, our initial stockholders and their permitted transferees will own at least 20% of our outstanding shares of common stock

 

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    entitled to vote thereon. As a result, in addition to our initial stockholders’ founder shares, we would need 7,500,001, or 37.5%, of the 20,000,000 public shares sold in this offering to be voted in favor of a transaction (assuming all issued and outstanding shares are voted and the option to purchase additional units is not exercised) in order to have such initial business combination approved. These quorum and voting thresholds and agreements may make it more likely that we will consummate our initial business combination.
     
    Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (1) cash consideration to be paid to the target or its owners; (2) cash to be transferred to the target for working capital or other general corporate purposes; or (3) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all shares of common stock submitted for redemption will be returned to the holders thereof.
     
Tendering share certificates in connection with a tender offer or redemption rights  

We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal to approve our initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, rather than simply voting against the initial business combination. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements, which will include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify itself in order to validly redeem its shares.
     

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Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold a stockholder vote  



Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, without our prior consent. We believe the restriction described above will discourage stockholders from accumulating large blocks of shares and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us or our affiliates at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination.
     
Redemption rights in connection with proposed amendments to our certificate of incorporation  


Our amended and restated certificate of incorporation will provide that any of its provisions related to pre-business combination activity (including the requirement to fund the trust account and not release such amounts except in specified circumstances and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of at least a majority of our common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of a majority of our common stock. In all other instances (other than the election of directors), our amended and restated certificate of incorporation will provide that it may be amended by holders of a majority of our common stock entitled to vote thereon, subject to applicable provisions of the Delaware General Corporation Law, or DGCL, or applicable stock exchange rules. Prior to an initial business combination, we may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation or on our initial business combination or that would entitle holders thereof to receive funds from the trust account. Our initial stockholders, who will beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they may choose.
     
    Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window, unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of taxes payable), divided by the number of then outstanding public shares. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination. Any permitted transferees would be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares.

 

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Release of funds in trust account on closing of our initial business combination  

On the completion of our initial business combination, the funds held in the trust account will be used to pay amounts due to any public stockholders who exercise their redemption rights as described above under “Proposed Business — Redemption rights for public stockholders upon completion of our initial business combination,” to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt securities or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
     
Redemption of public shares and distribution and liquidation if no initial business combination  


Our amended and restated certificate of incorporation provides that we will have only the completion window to complete our initial business combination. If we are unable to complete our initial business combination within the completion window, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of taxes payable and up to $100,000 to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within such completion window.
     
    Our initial stockholders, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within the completion window. However, if our sponsor or any of our officers, directors or any of their respective affiliates acquires public shares after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the completion window. The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.

 

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    Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window, unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares.
     
Limited payments to insiders   There will be no finder’s fees, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation paid by us to our sponsor, officers or directors or our or any of their respective affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination (regardless of the type of transaction that it is). However, the following payments may be made to our sponsor, officers or directors, or our or their affiliates, and, if made prior to our initial business combination will be made from (i) funds held outside the trust account or (ii) amounts necessary to pay our taxes:
     
    •    repayment of an aggregate of up to $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
     
    •    Payment to an affiliate of our sponsor of $10,000 per month, until the completion of our initial business combination, for secretarial and administrative support;
     
    •    reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and
     
    •    repayment of loans which may be made by our sponsor, an affiliate of our sponsor or our officers and directors to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.50 per warrant at the option of the lender.
     
    Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors or our or any of their respective affiliates.
     
Audit committee   Prior to the effectiveness of this registration statement, we will have established and will maintain an audit committee to, among other things, monitor compliance with the terms described above and the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to immediately take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. Please see “Management — Committees of the Board of Directors — Audit Committee” for additional information.
     

 

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Conflicts of interest   Our sponsor, officers and directors may participate in the formation of, or become an officer or director of, any other blank check company prior to completion of our initial business combination. As a result, our sponsor, officers or directors could have conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check company with which they may become involved.
     
    As described in “Proposed Business — Sourcing of Potential Business Combination Targets” and “Management — Conflicts of Interest,” each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us (including as described above). These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us. We do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors will materially affect our ability to complete our initial business combination.
     
    The potential conflicts described above may limit our ability to enter into a business combination or other transactions. These circumstances could give rise to numerous situations where interests may conflict. There can be no assurance that these or other conflicts of interest with the potential for adverse effects on the Company and investors will not arise.
     
    In addition, our sponsor and management team paid approximately $0.004 per share for their interest in the founder shares, and they will lose their entire investment if we do not successfully complete a business combination. This structure creates an incentive whereby our sponsor and management team could potentially make a substantial profit even if we complete a business combination with a target that ultimately declines in value and is not profitable for public investors.
     
Indemnity   Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below: (1) $10.00 per public share; or (2) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of amounts necessary to pay our taxes, except as to any claims by a third party that executed a waiver of any and all rights to the monies held in the trust account (whether any such waiver is enforceable) and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations.

 

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Risks

 

We are a newly incorporated company that has conducted no operations and has generated no revenues. Until we complete our initial business combination, we will have no operations and will generate no operating revenues. In making your decision whether to invest in our securities, you should take into account not only the background of our management team, but also the special risks we face as a blank check company. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. Please see “Proposed Business-Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419” for additional information concerning how Rule 419 blank check offerings differ from this offering. You should carefully consider these and the other risks set forth in the section entitled “Risk Factors” in this prospectus.

 

Summary Financial Data

 

The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, so only balance sheet data is presented.

  

 

February 9, 2021

 
   Actual   As Adjusted 
Balance Sheet Data:          
Working capital (1)   $(20,849)  $194,024,112 
Total assets (2)   $69,961   $201,024,112 
Total liabilities (3)   $45,849   $7,000,000 
Class A common stock subject to possible redemption; -0- and 18,902,411 shares, actual and as adjusted (4)   $   $189,024,110 
Stockholder’s equity (5)   $24,112   $5,000,002 

 

(1) The “as adjusted” calculation includes $200,000,000 cash held in trust from the proceeds of this offering and the sale of the private placement warrants, plus $1,000,000 of funds available outside of the trust, plus $24,112 of actual stockholders’ equity as of February 9, 2021, less $7,000,000 of deferred underwriting commission.

 

(2) The “as adjusted” calculation equals $200,000,000 cash held in trust from the proceeds of this offering and the sale of the private placement warrants, plus $1,000,000 of funds available outside of the trust, plus $24,112 of actual stockholders’ equity as of February 9, 2021.

 

(3) The “as adjusted” calculation includes $7,000,000 of deferred underwriting commissions.

 

(4) The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the “as adjusted” stockholders’ equity, which is set to approximate the minimum net tangible assets threshold of at least $5,000,001.

 

(5) Excludes 18,902,411 public shares which are subject to redemption in connection with our initial business combination. The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the value of Class A common stock that may be redeemed in connection with our initial business combination (initially $10.00 per share). The actual number of public shares that may be redeemed may exceed the aforementioned amount provided that we will not consummate an initial business combination unless we satisfy the $5,000,001 minimum net tangible assets threshold.

 

The “as adjusted” information gives effect to the sale of the units in this offering, the sale of the private placement warrants, and the payment of the estimated expenses of this offering and assumes no exercise of the underwriters’ over-allotment option. The “as adjusted” total assets amount includes the $200,000,000 held in the trust account (which would be $230,000,000 if the underwriters’ over-allotment option is exercised in full) for the benefit of our public stockholders, which amount, less deferred underwriting commissions, will be available to us only upon the completion of our initial business combination within the completion window. The “as adjusted” total assets include $7,000,000 being held in the trust account (which would be $8,050,000 if the underwriters’ over-allotment option is exercised in full) representing deferred underwriting commissions. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.

 

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND
RISK FACTOR SUMMARY

 

Some statements contained in this prospectus, and certain oral statements made from time to time by our representatives in connection with this offering, are forward-looking in nature. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

 

The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors:

 

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

 

•        our ability to complete our initial business combination;

 

•        our expectations around the performance of a prospective target business or businesses;

 

•        our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

 

•        our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;

 

•        our potential ability to obtain additional financing to complete our initial business combination;

 

•        our pool of prospective target businesses, including the location and industry of such target businesses;

 

•        the ability of our officers and directors to generate a number of potential business combination opportunities;

 

•        our public securities’ potential liquidity and trading;

 

•        the lack of a market for our securities;

 

•        the availability to us of funds from interest income on the trust account balance;

 

•        the trust account not being subject to claims of third parties;

 

•        our financial performance following this offering; or

 

•        the other risks and uncertainties discussed in “Risk Factors” and elsewhere in this prospectus.

 

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

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RISK FACTORS

 

An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this prospectus, before making a decision to invest in our units. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.

 

Risks Relating to Our Search for, and Consummation of or Inability to Consummate,
a Business Combination

 

Our public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, and even if we hold a vote, holders of our founder shares will participate in such vote, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.

 

We may choose not to hold a stockholder vote to approve our initial business combination unless the initial business combination would require stockholder approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other legal reasons. Except as required by applicable law or stock exchange rules, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Even if we seek stockholder approval, the holders of our founder shares will participate in the vote on such approval. Accordingly, we may consummate our initial business combination even if holders of a majority of our outstanding public shares do not approve of the business combination we consummate. Please see “Proposed Business — Stockholders may not have the ability to approve our initial business combination” for additional information.

 

If we seek stockholder approval of our initial business combination, our sponsor, officers and directors have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.

 

Our initial stockholders, officers and directors have agreed (and their permitted transferees will agree) to vote any founder shares and any public shares held by them in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need 7,500,001, or 37.5%, of the 20,000,000 public shares sold in this offering to be voted in favor of a transaction (assuming all issued and outstanding shares are voted and the option to purchase additional units is not exercised) in order to have such initial business combination approved. We expect that our initial stockholders and their permitted transferees will own at least 20% of our outstanding shares of common stock at the time of any such stockholder vote. Accordingly, if we seek stockholder approval of our initial business combination, it is more likely that the necessary stockholder approval will be received than would be the case if our initial stockholders and their permitted transferees agreed to vote their founder shares in accordance with the majority of the votes cast by our public stockholders.

 

Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of such business combination.

 

At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Additionally, since our board of directors may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination. Accordingly, if we do not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.

 

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The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.

 

We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with a business combination and such amount of deferred underwriting discount is not available for us to use as consideration in an initial business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us. If we are able to consummate an initial business combination, the per-share value of shares held by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.

 

The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.

 

At the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights and, therefore, we will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements or arrange for third-party financing. In addition, if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B common stock results in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock at the time of our initial business combination. In addition, the amount of deferred underwriting commissions payable to the underwriters is not required to be adjusted for any shares that are redeemed in connection with an initial business combination. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure.

 

The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.

 

If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful increases. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market.

 

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The requirement that we complete our initial business combination within the completion window may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.

 

Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within the completion window. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.

 

We may not be able to complete our initial business combination within the completion window, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.

 

Our sponsor, officers and directors have agreed that we must complete our initial business combination within the completion window. We may not be able to find a suitable target business and complete our initial business combination within such time period. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein.

 

If we have not completed our initial business combination within such time period, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares, and our warrants will expire worthless. Please see “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

 

If other sources of working capital are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination. If we are unable to obtain such loans, we may be unable to complete our initial business combination.

 

Of the net proceeds of this offering and the sale of the private placement warrants, $1,000,000 will be available to us initially outside the trust account to fund our working capital requirements. In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their respective affiliates is under any obligation or other duty to loan funds to us in such circumstances. Any such loans would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In such case, our public stockholders may receive only $10.00 per share, or less in certain circumstances, and our warrants will expire worthless. Please see “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

 

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As the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. This could increase the cost of our initial business combination and could even result in our inability to find a target or to consummate an initial business combination.

 

In recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets for special purpose acquisition companies have already entered into an initial business combination, and there are still many companies preparing for an initial public offering. As a result, at times, fewer attractive targets may be available to consummate an initial business combination.

 

In addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause targets companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an initial business combination, and may result in our inability to consummate an initial business combination on terms favorable to our investors altogether.

 

We may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after this offering, which may include acting as M&A advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction. Our underwriters are entitled to receive deferred underwriting commissions that will be released from the trust account only upon a completion of an initial business combination. These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after this offering, including, for example, in connection with the sourcing and consummation of an initial business combination.

 

We may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after this offering, including, for example, identifying potential targets, providing M&A advisory services, acting as a placement agent in a private offering or arranging debt financing transactions. We may pay such underwriter or its affiliate fair and reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with any of the underwriters or their respective affiliates and no fees or other compensation for such services will be paid to any of the underwriters or their respective affiliates prior to the date that is 60 days from the date of this prospectus, unless such payment would not be deemed underwriters’ compensation in connection with this offering. The underwriters are also entitled to receive deferred underwriting commissions that are conditioned on the completion of an initial business combination. The underwriters’ or their respective affiliates’ financial interests tied to the consummation of a business combination transaction may give rise to potential conflicts of interest in providing any such additional services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial business combination.

 

If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase shares or warrants from the public, which may influence a vote on a proposed business combination and reduce the public “float” of our common stock.

 

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation or other duty to do so. Please see “Proposed Business — Permitted purchases of our securities” for a description of how such persons will determine from which stockholders to seek to acquire shares or warrants. Such a purchase may include a contractual acknowledgement that such public stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or any of their respective affiliates purchase public shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling public stockholders would be required to revoke their prior elections to redeem their shares. The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of our initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of our initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. Please see “Proposed Business — Permitted purchases of our securities” for a description of how our sponsor, directors, officers, advisors or any of their respective affiliates will select which stockholders to purchase securities from in any private transaction.

 

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In addition, if such purchases are made, the public “float” of our Class A common stock and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

 

If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

 

We will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares. For example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer or proxy materials documents mailed to such holders, or up to two business days prior to the vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed. Please see “Proposed Business — Tendering stock certificates in connection with a tender offer or redemption rights.”

 

You will not be entitled to protections normally afforded to investors of many other blank check companies.

 

Since the net proceeds of this offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business that has not been identified, we may be deemed to be a “blank check” company under the U.S. securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the successful completion of this offering and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet of our company demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of our initial business combination. Please see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419” for a more detailed comparison of our offering to offerings that comply with Rule 419.

 

 

 

If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A common stock.

 

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in this offering, without our prior consent, which we refer to as the “Excess Shares.” However, our amended and restated certificate of incorporation does not restrict our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold the Excess Shares and, in order to dispose of such shares, would be required to sell your Excess Shares in open market transactions, potentially at a loss.

 

Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their stock, and our warrants will expire worthless.

 

We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there will be numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. Our sponsor, any of its affiliates or any of their respective clients may make additional investments in us, although our sponsor and its affiliates have no obligation or other duty to do so.

 

This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek stockholder approval of our initial business combination and we are obligated to pay cash for public shares that are redeemed, it will potentially reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating and completing a business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. Please see “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

 

If the funds available to us outside of the trust account are insufficient to allow us to operate for at least the completion window, we may be unable to complete our initial business combination.

 

The funds available to us outside of the trust account may not be sufficient to allow us to operate for at least the completion window, assuming that our initial business combination is not completed during that time. We expect to incur significant costs in pursuit of our acquisition plans. Management’s plans to address this need for capital through this offering and potential loans from certain of our affiliates are discussed in the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” However, our affiliates are not obligated to make loans to us in the future, and we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses. Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time.

 

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We believe that the funds available to us outside of the trust account, including loans or additional investments from our sponsor, will be sufficient to allow us to operate for at least the completion window; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. Please see “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

 

We will depend on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination. If we are unable to obtain such loans, we may be unable to complete our initial business combination.

 

Approximately $1,000,000 of the net proceeds of this offering and the sale of the private placement warrants will be available to us initially outside the trust account to fund our working capital requirements. In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. In addition, our sponsor, an affiliate of our sponsor or our officers and directors may, but none of them is obligated to, lend us funds as may be required to fund our working capital requirements. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their respective affiliates is under any obligation or other duty to loan funds to us in such circumstances. Any such loans would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In such case, our public stockholders may receive only $10.00 per share, or less in certain circumstances, and our warrants will expire worthless. Please see “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

 

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 will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses 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 advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Making such a request of potential target businesses may make our acquisition proposal less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target businesses that we might pursue. 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 we are 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 completion window, 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.

 

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Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) 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: (1) $10.00 per public share; or (2) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of taxes payable, except as to any claims by a third party that executed a waiver of any and all rights to the monies held in the trust account (whether any such waiver is enforceable) and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such 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.

 

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: (1) $10.00 per public share; or (2) the actual amount per share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of taxes payable, 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 in certain instances. For example, the cost of such legal action may be deemed by the independent directors to be too high relative to the amount recoverable or the independent directors may 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.

 

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 the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us 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 some or all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public stockholders from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.

 

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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 public stockholders in connection with our liquidation would be reduced.

 

If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.

 

If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:

 

•        restrictions on the nature of our investments; and

 

•        restrictions on the issuance of securities;

 

each of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed upon us burdensome requirements, including:

 

•        registration as an investment company with the SEC;

 

•        adoption of a specific form of corporate structure; and

 

•        reporting, record keeping, voting, proxy and disclosure requirements and compliance with other rules and regulations that we are currently not subject to.

 

In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long-term. We do not plan to buy businesses or assets with a view to resale or profit from their resale.

 

We do not plan to buy unrelated businesses or assets or to be a passive investor.

 

We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long-term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of: (i) the completion of our primary business objective, which is a business combination; (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window; and (iii) absent a business combination, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to consummate our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares. Please see “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

 

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Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.

 

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations.

 

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

 

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the completion window may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the 24th month from the closing of this offering in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures.

 

Because we do not intend to comply with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, consultants, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the completion window is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.

 

We may not hold an annual meeting of stockholders until after we consummate our initial business combination and you will not be entitled to any of the corporate protections provided by such a meeting.

 

In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.

 

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We are not registering the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except on a “cashless basis” and potentially causing such warrants to expire worthless.

 

We are not registering the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our reasonable best efforts to file with the SEC, and within 60 business days following our initial business combination to have declared effective, a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder or an exemption from registration or qualification is available. Notwithstanding the above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file, or maintain in effect, a registration statement, but we will use our reasonable best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Class A common stock included in the units. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying shares of Class A common stock for sale under all applicable state securities laws.

 

The grant of registration rights to our initial stockholders and their permitted transferees may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A common stock.

 

Pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, our initial stockholders and their permitted transferees can demand that we register the resale of their founder shares after those shares convert to shares of our Class A common stock at the time of our initial business combination. In addition, the holders of the private placement warrants and their permitted transferees can demand that we register the resale of the private placement warrants and the shares of Class A common stock issuable upon exercise of the private placement warrants, and holders of warrants that may be issued upon conversion of working capital loans may demand that we register the resale of such warrants or the Class A common stock issuable upon exercise of such warrants. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A common stock. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to complete. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock that is expected when the common stock owned by our initial stockholders or their permitted transferees, the private placement warrants owned by our sponsor, the warrants issued in connection with working capital loans or their permitted transferees are registered for resale.

 

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Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent novel coronavirus (“COVID-19”) outbreak.

 

On March 11, 2020, the World Health Organization officially declared the outbreak of the COVID-19 a “pandemic.” A significant outbreak of COVID-19 and other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.

 

Because we are neither limited to evaluating target businesses in a particular industry nor have we identified any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.

 

We may seek to complete a business combination with an operating company in any industry or sector. However, we will not, under our amended and restated certificate of incorporation, be permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations. Because we have not yet identified or approached any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.

 

We may seek acquisition opportunities in acquisition targets that may be outside of our management’s areas of expertise.

 

We will consider a business combination in sectors which may be outside of our management’s areas of expertise if such business combination candidate is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors relevant to such acquisition. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.

 

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Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.

 

Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these criteria and guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by applicable law or stock exchange rules, or we decide to obtain stockholder approval for business or other reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.

 

We may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject us to volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel.

 

To the extent we complete our initial business combination with an early stage company, a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.

 

We are not required to obtain a fairness opinion and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view.

 

Unless we complete our initial business combination with an affiliated entity or our board cannot independently determine the fair market value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy materials or tender offer documents, as applicable, related to our initial business combination.

 

We may issue additional shares of Class A common stock or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions described herein and we may also issue shares of Class A common stock upon redemption of the warrants in certain circumstances as described herein. Any such issuances would dilute the interest of our stockholders and likely present other risks.

 

Our amended and restated certificate of incorporation will authorize the issuance of up to 300,000,000 shares of Class A common stock, par value $0.0001 per share, and 20,000,000 shares of Class B common stock, par value $0.0001 per share and 1,000,000 shares of undesignated preferred stock, par value $0.0001 per share. Immediately after this offering, there will be 280,000,000 and 15,000,000 (assuming in each case, that the underwriters have not exercised their option to purchase additional units) authorized but unissued shares of Class A and Class B common stock, respectively, available for issuance, which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or upon the conversion of the Class B common stock. Shares of Class B common stock are automatically convertible into shares of our Class A common stock at the time of our initial business combination, initially at a one-for-one ratio but subject to adjustment as set forth herein. Immediately after this offering, there will be no shares of preferred stock issued and outstanding.

 

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We may issue a substantial number of additional shares of Class A common stock, and may issue shares of preferred stock, in order to complete our initial business combination or under an employee incentive plan after completion of our initial business combination (although our amended and restated certificate of incorporation will provide that we may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation or on our initial business combination or that would entitle holders thereof to receive funds from the trust account). We may also issue shares of Class A common stock upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions described herein, and we may also issue shares of Class A common stock upon redemption of the warrants in certain circumstances as described herein. However, our amended and restated certificate of incorporation will provide, among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (1) receive funds from the trust account or (2) vote on any initial business combination. The issuance of additional shares of common or preferred stock:

 

•        may significantly dilute the equity interest of investors in this offering;

 

•        may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;

 

•        could cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and

 

•        may adversely affect prevailing market prices for our units, common stock and/or warrants.

 

Resources could be wasted in researching initial business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.

 

We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. Please see “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

 

We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our officers or directors which may raise potential conflicts of interest.

 

In light of the involvement of our sponsor, officers and directors with other businesses, we may decide to acquire one or more businesses affiliated with or competitive with our officers and directors, and their respective affiliates. Our officers and directors also serve as officers and board members for other entities, including, without limitation, those described under “Management — Conflicts of Interest.” Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth in “Proposed Business — Effecting our Initial Business Combination” and “— Selection of a target business and structuring of our initial business combination” and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, regarding the fairness to our stockholders from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our officers or directors, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.

 

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Since our initial stockholders will lose their entire investment in us if our initial business combination is not completed (other than with respect to any public shares they may hold), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.

 

In February, 2021, our sponsor subscribed to purchase an aggregate of 5,750,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.004 per share. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of common stock upon the completion of this offering.

 

In addition, our sponsor has subscribed to purchase an aggregate of 4,000,000 (or 4,400,000 if the underwriters’ option to purchase additional units is exercised in full) private placement warrants for a purchase price of $6,000,000 (or $6,600,000 if the underwriters’ option to purchase additional units is exercised in full), or $1.50 per warrant, that will also be worthless if we do not complete our initial business combination. Each private placement warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein.

 

The founder shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that: (1) only holders of the founder shares have the right to vote on the election and removal of directors prior to our initial business combination; (2) the founder shares are subject to certain transfer restrictions, as described in more detail below; (3) our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to: (a) waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination, (b) waive their redemption rights with respect to any founder shares and public shares held by them in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within the completion window; and (c) waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within the completion window (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the completion window); (4) the founder shares are automatically convertible into shares of our Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein; and (5) the holders of founder shares are entitled to registration rights.

 

The personal and financial interests of our sponsor, officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. This risk may become more acute as the deadline for completing our initial business combination nears.

 

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We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.

 

Although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt following this offering, we may choose to incur substantial debt to complete our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:

 

•        default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;

 

•        acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

 

•        our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;

 

•        our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt security is outstanding;

 

•        our inability to pay dividends on our common stock;

 

•        using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

 

•        limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

 

•        increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

 

•        limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

 

We may only be able to complete one business combination with the proceeds of this offering and the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may materially negatively impact our operations and profitability.

 

The net proceeds from this offering and the sale of the private placement warrants will provide us with $200,000,000 (or $230,000,000 if the underwriters’ option to purchase additional units is exercised in full) that we may use to complete our initial business combination (which includes $7,000,000, or up to $8,050,000 if the underwriters’ option to purchase additional units is exercised in full, of deferred underwriting commissions being held in the trust account).

 

We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:

 

•        solely dependent upon the performance of a single business, property or asset; or

 

•        dependent upon the development or market acceptance of a single or limited number of products, processes or services.

 

This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.

 

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We may attempt to complete business combinations simultaneously with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.

 

If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.

 

We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all.

 

In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.

 

We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our stockholders do not agree.

 

Our amended and restated certificate of incorporation will not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (such that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their respective affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

 

In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments, including our warrant agreement, in a manner that will make it easier for us to complete our initial business combination that some of our stockholders or warrant holders may not support.

 

In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. We cannot assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial business combination in order to effectuate our initial business combination.

 

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Certain provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders a majority of our common stock, which is a lower amendment threshold than those of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination that some of our stockholders may not support.

 

Our amended and restated certificate of incorporation will provide that any of its provisions (other than amendments relating to the appointment of directors, which require the approval by at least 90% of our common stock voting at a stockholder meeting) related to pre-business combination activity (including the requirement to fund the trust account and not release such amounts except in specified circumstances and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of a majority of our common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of a majority of our common stock. In all other instances, our amended and restated certificate of incorporation will provide that it may be amended by holders of a majority of our common stock, subject to applicable provisions of the DGCL, or applicable stock exchange rules. We may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation or on our initial business combination. Our initial stockholders, who will beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which will govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete our initial business combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.

 

Our sponsor, officers and directors have agreed, pursuant to a written agreement, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, divided by the number of then outstanding public shares. These agreements are contained in a letter agreement that we have entered into with our sponsor, officers and directors. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, officers or directors for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.

 

Certain agreements related to this offering may be amended without stockholder approval.

 

Certain agreements, including the underwriting agreement relating to this offering, the letter agreement among us and our sponsor, officers and directors, and the registration rights agreement among us and our initial stockholders, may be amended without stockholder approval. These agreements contain various provisions that our public stockholders might deem to be material. While we do not expect our board to approve any amendment to any of these agreements prior to our initial business combination, it may be possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement in connection with the consummation of our initial business combination. Any such amendments would not require approval from our stockholders, may result in the completion of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities.

 

We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination.

 

Although we believe that the net proceeds of this offering and the sale of the private placement warrants will be sufficient to allow us to complete our initial business combination, because we have not yet identified any prospective target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering and the sale of the private placement warrants prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless.

 

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Our initial stockholders will control the election of our board of directors until consummation of our initial business combination and will hold a substantial interest in us. As a result, they will elect all of our directors prior to the consummation of our initial business combination and may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.

 

Upon the closing of this offering, our initial stockholders will own 20% of our outstanding common stock (assuming they do not purchase any units in this offering). In addition, the founder shares, all of which are held by our initial stockholders, will entitle the holders to elect all of our directors prior to the consummation of our initial business combination. Holders of our public shares will have no right to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended by at least 90% of our common stock voting at a stockholder meeting. As a result, you will not have any influence over the election of directors prior to our initial business combination.

 

Neither our initial stockholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock. In addition, as a result of their substantial ownership in our company, our initial stockholders may exert a substantial influence on other actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions. If our initial stockholders purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their influence over these actions. Accordingly, our initial stockholders will exert significant influence over actions requiring a stockholder vote. Please see “Proposed Business — Permitted purchases of our securities.”

 

Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.

 

The federal proxy rules require that a proxy statement with respect to a vote on a business combination include historical and/or pro forma financial statement disclosure. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within the completion window.

 

We may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after this offering, which may include acting as financial advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction.  Our underwriters are entitled to receive deferred commissions that will released from the trust only on a completion of an initial business combination.  These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after this offering, including, for example, in connection with the sourcing and consummation of an initial business combination.

 

We may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after this offering, including, for example, identifying potential targets, providing financial advisory services, acting as a placement agent in a private offering or arranging debt financing.  We may pay such underwriter or its affiliate fair and reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with any of the underwriters or their respective affiliates and no fees or other compensation for such services will be paid to any of the underwriters or their respective affiliates prior to the date that is 60 days from the date of this prospectus, unless such payment would not be deemed underwriters’ compensation in connection with this offering.  The underwriters are also entitled to receive deferred commissions that are conditioned on the completion of an initial business combination.  The underwriters’ or their respective affiliates’ financial interests tied to the consummation of a business combination transaction may give rise to potential conflicts of interest in providing any such additional services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial business combination.

 

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Risks Relating to the Post-Business Combination Company

 

Subsequent to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.

 

Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our 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 not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.

 

Our management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.

 

We may structure our initial business combination so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in our initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares of common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain our control of the target business.

 

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Risks Relating to Our Management Team

 

Our officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.

 

Our officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other responsibilities. We do not intend to have any full-time employees prior to the completion of our business combination. Each of our officers and directors is engaged in several other business endeavors for which he or she may be entitled to substantial compensation and our officers and directors are not obligated to contribute any specific number of hours per week to our affairs.

 

If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. Please see “Management — Directors, Director Nominees and Executive Officers” for a discussion of our officers’ and directors’ other business affairs.

 

We are dependent upon our officers and directors and their departure could adversely affect our ability to operate.

 

Our operations are dependent upon a relatively small group of individuals. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination. We do not have an employment agreement with, or key-man insurance on the life of any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.

 

Our ability to successfully effect our initial business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.

 

Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial business combination, we do not currently expect that any of them will do so. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.

 

In addition, the officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.

 

Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination, and a particular business combination may be conditioned on the retention or resignation of such key personnel. These agreements may cause our key personnel to have conflicts of interest in determining whether to proceed with a particular business combination. However, we do not expect that any of our key personnel will remain with us after the completion of our initial business combination.

 

Our key personnel may be able to remain with our company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination, as we do not expect that any of our key personnel will remain with us after the completion of our initial business combination. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.

 

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We may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.

 

When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.

 

The officers and directors of an initial business combination candidate may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an initial business combination candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the initial business combination candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place. As a result, we may need to reconstitute the management team of the post-transaction company in connection with our initial business combination, which may adversely impact our ability to complete an initial business combination in a timely manner or at all.

 

Certain of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity or other transaction should be presented.

 

Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Our sponsor and officers and directors are, or may in the future become, affiliated with entities (such as operating companies or investment vehicles) that are engaged in a similar business. We do not have employment contracts with our officers and directors that will limit their ability to work at other businesses. In addition, our sponsor, officers and directors may participate in the formation of, or become an officer or director of, any other blank check company prior to completion of our initial business combination. As a result, our sponsor, officers or directors could have conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check company with which they are or may become involved.

 

As described in “Proposed Business — Sourcing of Potential Business Combination Targets” and “Management — Conflicts of Interest,” each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us (including as described in “Proposed Business — Sourcing of Potential Business Combination Targets”). These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless (i) such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company, (ii) such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue and (iii) the director or officer is permitted to refer the opportunity to us without violating another legal obligation.

 

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Please see “Management — Directors, Director Nominees and Executive Officers,” “Management — Conflicts of Interest” and “Certain Relationships and Related Party Transactions” for a discussion of our officers’ and directors’ business affiliations and potential conflicts of interest.

 

Our officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.

 

We have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor or our directors or officers. We do not have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.

 

Risks Relating to Our Securities

 

You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.

 

Our public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (1) the completion of our initial business combination, and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window; and (3) the redemption of all of our public shares if we are unable to complete our initial business combination within the completion window, subject to applicable law and as further described herein. In addition, if we are unable to complete an initial business combination within the completion window for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond the completion window before they receive funds from our trust account. In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.

 

The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.

 

The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our amended and restated certificate of incorporation, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.

 

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Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

 

We have applied to have our units listed on Nasdaq. We expect that our units will be listed on Nasdaq on or promptly after the date of this prospectus. Following the date the shares of our Class A common stock and warrants are eligible to trade separately, we anticipate that the shares of our Class A common stock and warrants will be separately listed on Nasdaq. We cannot guarantee that our securities will be approved for listing on Nasdaq. Although after giving effect to this offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in the Nasdaq listing standards, we cannot assure you that our securities will be, or will continue to be, listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, our stock price would generally be required to be at least $4.00 per share, our stockholders’ equity would generally be required to be at least $5.0 million and we would be required to have a minimum of 300 round lot holders (with at least 50% of such round lot holders holding securities with a market value of at least $2,500) of our securities. We cannot assure you that we will be able to meet those initial listing requirements at that time.

 

If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

 

•        a limited availability of market quotations for our securities;

 

•        reduced liquidity for our securities;

 

•        a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

 

•        a limited amount of news and analyst coverage; and

 

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

 

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually our Class A common stock and warrants will be listed on Nasdaq, our units, Class A common stock and warrants will be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities, including in connection with our initial business combination.

 

Our sponsor contributed $25,000, or approximately $0.004 per founder share, and, accordingly, you will experience immediate and substantial dilution from the purchase of our Class A common stock.

 

The difference between the public offering price per share (allocating all of the unit purchase price to the Class A common stock and none to the warrant included in the unit) and the pro forma net tangible book value per share of our Class A common stock after this offering constitutes the dilution to you and the other investors in this offering. Our sponsor acquired the founder shares at a nominal price, significantly contributing to this dilution. Upon the closing of this offering, and assuming no value is ascribed to the warrants included in the units, you and the other public stockholders will incur an immediate and substantial dilution of approximately 91.8% (or $9.18 per share, assuming no exercise of the underwriters’ over-allotment option), the difference between the pro forma net tangible book value per share of $0.82 and the initial offering price of $10.00 per unit. In addition, because of the anti-dilution rights of the founder shares, any equity or equity-linked securities issued or deemed issued in connection with our initial business combination would be disproportionately dilutive to our Class A common stock.

 

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We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least a majority of the then outstanding public warrants. As a result, the exercise price of your warrants could be increased, the warrants could be converted into cash or stock (at a ratio different than initially provided), the exercise period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased, all without your approval.

 

Our warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of a majority of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of a majority of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of a majority of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a warrant. Our initial stockholders may purchase public warrants with the intention of reducing the number of public warrants outstanding or to vote such warrants on any matters submitted to warrant holders for approval, including amending the terms of the public warrants in a manner adverse to the interests of the registered holders of public warrants. While our initial stockholders have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for such transactions, there is no limit on the number of our public warrants that our initial stockholders may purchase and it is not currently known how many public warrants, if any, our initial stockholders may hold at the time of our initial business combination or at any other time during which the terms of the public warrants may be proposed to be amended. Please see “Proposed Business — Permitted purchases of our securities.”

 

Our warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.

 

Our warrant agreement will provide that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

 

Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.

 

This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

 

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We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

 

We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.

 

In addition, we have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that the closing price of our Class A common stock equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met, including that holders will be able to exercise their warrants prior to redemption for a number of shares of Class A common stock determined based on the redemption date and the fair market value of our Class A common stock. Please see “Description of Securities — Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00.” The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of shares of Class A common stock received is capped at 0.361 shares of Class A common stock per warrant (subject to adjustment) irrespective of the remaining life of the warrants.

 

If the Reference Value is less than $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like), then the private placement warrants must also concurrently be called for redemption on the same terms as the outstanding public warrants, as described above.

 

Our warrants and founder shares may have an adverse effect on the market price of our Class A common stock and make it more difficult to effectuate our initial business combination.

 

We will be issuing warrants to purchase 6,666,667 shares of our Class A common stock (or up to 7,666,667 shares of our Class A common stock if the underwriters’ option to purchase additional units is exercised in full), at a price of $11.50 per whole share (subject to adjustment as provided herein), as part of the units offered by this prospectus. Simultaneously with the closing of this offering, we also will be issuing in the Private Placement an aggregate of 4,000,000 (or 4,400,000 if the underwriters’ option to purchase additional units is exercised in full) private placement warrants, each exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. Our initial stockholders currently hold 5,750,000 founder shares (up to 750,000 of which are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ option to purchase additional units is exercised). The founder shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment as set forth herein. In addition, if our sponsor, an affiliate of our sponsor or certain of our officers and directors make any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at the price of $1.50 per warrant, at the option of the lender. Such warrants would be identical to the private placement warrants.

 

To the extent we issue shares of Class A common stock to effectuate a business transaction, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise of these warrants or conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the number of outstanding shares of our Class A common stock and reduce the value of the Class A common stock issued to complete the business transaction. Therefore, our warrants and founder shares may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.

 

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The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor, or their permitted transferees: (1) if the Reference Value is less than $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like), then the private placement warrants must also concurrently be called for redemption on the same terms as the outstanding public warrants, as described above; (2) they are non-redeemable in certain circumstances; (3) they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination; (4) they may be exercised by the holders on a cashless basis; and (5) the holders thereof (including with respect to the shares of common stock issuable upon exercise of these warrants) are entitled to registration rights.

 

Because each unit contains one-third of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.

 

Each unit contains one-third of one redeemable warrant. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole warrant. This is different from other offerings similar to ours whose units include one share of common stock and one warrant to purchase either one full share or one-half of one share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of an initial business combination since the warrants will be exercisable in the aggregate for one-third of the number of shares compared to units that each contain a warrant to purchase either one full share or one-half of one share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if they included a warrant to purchase one-half of one share.

 

A provision of our warrant agreement may make it more difficult for use to consummate an initial business combination.

 

If

 

•        we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per share;

 

•        the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions); and

 

•        the Market Value is below $9.20 per share;

 

then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices described below under “Description of Securities — Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described below under “Description of Securities — Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with a target business.

 

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The determination of the offering price of our units and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our units properly reflects the value of such units than you would have in a typical offering of an operating company.

 

Prior to this offering there has been no public market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with representatives of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of the units, including the Class A common stock and warrants underlying the units, include:

 

•        the history and prospects of companies whose principal business is the acquisition of other companies;

 

•        prior offerings of those companies;

 

•        our prospects for acquiring an operating business;

 

•        a review of debt to equity ratios in leveraged transactions;

 

•        our capital structure;

 

•        an assessment of our management and their experience in identifying suitable acquisition opportunities;

 

•        general conditions of the securities markets at the time of this offering; and

 

•        other factors as were deemed relevant.

 

Although these factors were considered, the determination of our offering size, price and the terms of the units, including the Class A common stock and warrants underlying the units, is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results.

 

There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.

 

There is currently no market for our securities. Stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions, including as a result of the COVID-19 outbreak. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.

 

General Risk Factors

 

We are a newly incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.

 

We are a newly incorporated company with no operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.

 

Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”

 

As of February 9, 2021, we had $25,000 in cash and a working capital deficit of $20,849. Further, we have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. Management’s plans to address this need for capital through this offering are discussed in the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We cannot assure you that our plans to raise capital or to consummate an initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial statements contained elsewhere in this prospectus do not include any adjustments that might result from our inability to consummate this offering or our inability to continue as a going concern.

 

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Past performance by members of our management team and their affiliates may not be indicative of future performance of an investment in us.

 

Information regarding performance by, or businesses associated with members of our management team and their affiliates is presented for informational purposes only. Any past experience and performance, of members of our management team and their affiliates is not a guarantee either: (1) that we will be able to successfully identify a suitable candidate for our initial business combination; or (2) of any results with respect to any initial business combination we may consummate. You should not rely on the historical record and performance of members of our management team or their affiliates as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward.

 

We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

 

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the end of such fiscal year. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

 

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

 

Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an initial business combination.

 

Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such initial business combination.

 

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Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.

 

Our amended and restated certificate of incorporation will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate the terms of and issue new series of preferred shares, which may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

 

We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

 

Our amended and restated certificate of incorporation will require, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will, subject to certain exceptions, be deemed to have consented to service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders.

 

Our amended and restated certificate of incorporation will require, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or (C) for which the Court of Chancery does not have subject matter jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation. This choice of forum provision may limit or make more costly a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

 

Our amended and restated certificate of incorporation will provide that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law, subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. In addition, our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder. We note, however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.

 

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Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.

 

We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.

 

If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.

 

If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.

 

If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:

 

•        costs and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements of overseas markets;

 

•        rules and regulations regarding currency redemption;

 

•        complex corporate withholding taxes;

 

•        laws governing the manner in which future business combinations may be effected;

 

•        tariffs and trade barriers;

 

•        regulations related to customs and import/export matters;

 

•        longer payment cycles;

 

•        tax consequences;

 

•        currency fluctuations and exchange controls;

 

•        rates of inflation;

 

•        challenges in collecting accounts receivable;

 

•        cultural and language differences;

 

•        employment regulations;

 

•        crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;

 

•        deterioration of political relations with the United States;

 

•        obligatory military service by personnel; and

 

•        government appropriation of assets.

 

We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination or, if we complete such initial business combination, our operations might suffer, either of which may adversely impact our business, results of operations and financial condition.

 

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If our management following our initial business combination is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.

 

Following our initial business combination, any or all of our management could resign from their positions as officers of the Company, and the management of the target business at the time of the business combination could remain in place. Management of the target business may not be familiar with U.S. securities laws. If new management is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.

 

We may face risks related to businesses in the sustainable industrial technology and infrastructure industries.

 

Business combinations with businesses in the sustainable industrial technology and infrastructure industries entail special considerations and risks. If we are successful in completing a business combination with such a target business, we may be subject to, and possibly adversely affected by, the following risks:

 

•        the markets we may serve may be subject to general economic conditions and cyclical demand, which could lead to significant shifts in our results of operations from quarter to quarter that make it difficult to project long-term performance;

 

•        we may be unable to attract or retain customers;

 

•        we may be subject to the negative impacts of catastrophic events;

 

•        we may face competition and consolidation of the specific sector of the industry within which the target business operates;

 

•        we may be subject to volatility in costs for strategic raw material and energy commodities (such as natural gas, including exports of material quantities of natural gas from the United States) or disruption in the supply of these commodities could adversely affect our financial results;

 

•        we may be unable to obtain necessary insurance coverage for the target business’ operations;

 

•        we may incur additional expenses and delays due to technical problems, labor problems (including union disruptions) or other interruptions at our manufacturing facilities after our initial business combination;

 

•        we may experience work-related accidents that may expose us to liability claims;

 

•        our manufacturing processes and products may not comply with applicable statutory and regulatory requirements, or if we manufacture products containing design or manufacturing defects, demand for our products may decline and we may be subject to liability claims;

 

•        we may be liable for damages based on product liability claims, and we may also be exposed to potential indemnity claims from customers for losses due to our work or if our employees are injured performing services;

 

•        our products may be are subject to warranty claims, and our business reputation may be damaged and we may incur significant costs as a result;

 

•        we may be unable to protect our intellectual property rights;

 

•        our products and manufacturing processes will be subject to technological change;

 

•        we may be subject to increased government regulations, including with respect to, among other matters, increased environmental regulation and worker safety regulation, and the costs of compliance with such regulations; and

 

•        the failure of our customers to pay the amounts owed to us in a timely manner.

 

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Any of the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifying prospective target businesses will not be limited to the sustainable industrial technology and infrastructure industries. Accordingly, if we acquire a target business in another industry, these risks we will be subject to risks attendant with the specific industry in which we operate or target business which we acquire, which may or may not be different than those risks listed above.

 

Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.

 

In recent months, the market for directors and officers liability insurance for special purpose acquisition companies has changed. Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable. There can be no assurance that these trends will not continue.

 

The increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate an initial business combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post business combination entity might need to incur greater expense, accept less favorable terms or both. However, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s ability to attract and retain qualified officers and directors.

 

In addition, even after we were to complete an initial business combination, our directors and officers could still be subject to potential liability from claims arising from conduct alleged to have occurred prior to the initial business combination. As a result, in order to protect our directors and officers, the post-business combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for runoff insurance would be an added expense for the post-business combination entity, and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to our investors.

 

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USE OF PROCEEDS

 

We are offering 20,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering together with the funds we will receive from the sale of the private placement warrants will be used as set forth in the following table.

 

    Without
Option to
Purchase
Additional
Units
    Option to
Purchase
Additional
Units Exercised
in Full
 
Gross proceeds                
Gross proceeds from units offered to public(1)   $ 200,000,000     $ 230,000,000  
Gross proceeds from private placement warrants offered in the private placement     6,000,000       6,600,000  
Total gross proceeds   $ 206,000,000     $ 236,600,000  
Estimated offering expenses(2)                
Underwriting commissions (2.0% of gross proceeds from units offered to public, excluding deferred portion)(3)     4,000,000       4,600,000  
Legal fees and expenses     250,000       250,000  
Printing and engraving expenses     25,000       25,000  
Accounting fees and expenses     47,000       47,000  
SEC/FINRA expenses     60,093       60,093  
Travel and road show     25,000       25,000  
Directors and officers insurance premiums     500,000       500,000  
Nasdaq listing and filing fees     75,000       75,000  
Miscellaneous expenses     17,907       17,907  
Total estimated offering expenses (other than underwriting commissions)     1,000,000       1,000,000  
Proceeds after estimated offering expenses   $ 201,000,000     $ 231,000,000  
Held in trust account(3)   $ 200,000,000     $ 230,000,000  
Percent of public offering size     100 %     100 %
Not held in trust account   $ 1,000,000     $ 1,000,000  

 

The following table shows the use of the approximately $1,000,000 of net proceeds not held in the trust account(3).

 

    Amount   % of Total  
Legal, accounting, due diligence, travel, and other expenses in connection with any business combination   $ 400,000   40.0 %
Legal and accounting fees related to regulatory reporting obligations     185,000   18.5 %
Nasdaq continued listing fees     75,000   7.5 %
Payment for secretarial and administrative support(4)     240,000   24.0 %
Working capital to cover miscellaneous expenses, including D&O insurance premiums     100,000   10.0 %
Total   $ 1,000,000   100.0 %

 

(1)Includes amounts payable to public stockholders who properly redeem their shares in connection with our successful completion of our initial business combination.
(2)Our sponsor has agreed to loan us up to $300,000 as described in this prospectus. As of February 9, 2021, we had borrowed approximately $15,849 under such promissory note. These loans will be repaid upon completion of this offering out of the $1,000,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account. In the event that our offering expenses are more than as set for in this table, we may fund such excess from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than as set for in this table, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.

 

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(3)The underwriters have agreed to defer underwriting commissions equal to 3.5% of the gross proceeds of this offering. Upon completion of our initial business combination, $7,000,000, which constitutes the underwriters’ deferred commissions (or up to $8,050,000 if the underwriters’ option to purchase additional units is exercised in full) will be paid to the underwriters from the funds held in the trust account and the remaining funds, less amounts released to the trustee to pay redeeming stockholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.
(4)This represents payments for 24 months to an affiliate of our sponsor of $10,000 per month for secretarial and administrative support.

 

Of the net proceeds of this offering and the sale of the private placement warrants, $200,000,000 (or $230,000,000 if the underwriters’ over-allotment option is exercised in full), including $7,000,000 (or $8,050,000 if the underwriters’ over-allotment option is exercised in full) of deferred underwriting commissions, will, upon the consummation of this offering, be placed in a U.S.-based trust account with Continental Stock Transfer & Trust Company acting as trustee. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act and that invest only in direct U.S. government obligations. Based on current interest rates, we estimate that the interest earned on the trust account will be approximately $200,000 per year, assuming an interest rate of 0.10% per year. We will not be permitted to withdraw any of the principal or interest held in the trust account, except with respect to amounts necessary to pay taxes. The funds held in the trust account will not be released from the trust account until the earliest of: (1) the completion of our initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance and timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within the completion window; and (3) the redemption of all of our public shares if we are unable to complete our initial business combination within the completion window, subject to applicable law. Based on current interest rates, we expect that interest earned on the trust account will be sufficient to pay taxes.

 

The net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our initial business combination. If our initial business combination is paid for using equity or debt securities or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination.

 

Following this offering and prior to the completion of our initial business combination, our principal use of working capital will be to fund our activities to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination. During that period, we expect our other principal expenses to include franchise and income taxes and regulatory reporting requirements. Commencing on the date of this prospectus, we have agreed to pay an affiliate of our sponsor a total of $10,000 per month for secretarial and administrative support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.

 

Our sponsor, an affiliate of our sponsor or our officers and directors may, but none of them is obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans by our sponsor, an affiliate of our sponsor or our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor, an affiliate of our sponsor or our officers and directors, if any, as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

 

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If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may also purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Please see “Proposed Business — Permitted purchases of our securities” for a description of how such persons will determine from which stockholders to seek to acquire shares. The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, such persons have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.

 

We may not redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules) and the agreement for our initial business combination may require as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights so that we cannot satisfy the net tangible asset requirement or any net worth or cash requirements, we would not proceed with the redemption of our public shares or the business combination, and instead may search for an alternate business combination.

 

A public stockholder will be entitled to receive funds from the trust account only upon the earlier to occur of: (1) the completion of our initial business combination and then, only in connection with those public shares that such stockholder has properly elected to redeem, subject to the limitations described in this prospectus; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window; and (3) the redemption of all of our public shares if we are unable to complete our initial business combination within the completion window, subject to applicable law. In no other circumstances will a public stockholder have any right or interest of any kind to or in the trust account.

 

Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to (1) waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination and (2) waive their redemption rights with respect to any founder shares and public shares held by them in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within the completion window. In addition, our initial stockholders, officers and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within the completion window. However, if our sponsor or any of our officers or directors acquires public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the completion window.

 

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DIVIDEND POLICY

 

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future, except if we increase the size of this offering, in which case we will effect a stock dividend or other appropriate mechanism immediately prior to the consummation of this offering in an amount as to maintain the ownership of our initial stockholders prior to this offering at 20% of our issued and outstanding shares of common stock upon the consummation of this offering. Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

 

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DILUTION

 

The difference between the public offering price per share of Class A common stock, assuming no value is attributed to the warrants included in the units we are offering pursuant to this prospectus or the private placement warrants, and the pro forma net tangible book value per share of our Class A common stock after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution associated with the sale and exercise of warrants, including the private placement warrants, which would cause the actual dilution to the public stockholders to be higher, particularly where a cashless exercise is utilized. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of Class A common stock which may be redeemed for cash), by the number of outstanding shares of our Class A common stock.

 

At February 9, 2021, our net tangible book deficit was $20,849 or approximately ($0.00) per share of Class B common stock. After giving effect to the sale of 20,000,000 shares of Class A common stock included in the units we are offering by this prospectus, the sale of the private placement warrants and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at February 9, 2021 would have been $5,000,002 or $0.82 per share, representing an immediate increase in net tangible book value (as decreased by the value of 18,902,411 shares of Class A common stock that may be redeemed for cash in connection with our initial business combination and assuming no exercise of the underwriters’ option to purchase additional units) of $0.82 per share to our initial stockholders as of the date of this prospectus and an immediate dilution of $9.18 per share or 91.8% to our public stockholders not exercising their redemption rights. The dilution to new investors if the underwriters exercise their option to purchase additional units in full would be an immediate dilution of $9.28 per share or 92.8%.

 

The following table illustrates the dilution to the public stockholders on a per share basis, assuming no value is attributed to the warrants included in the units or the private placement warrants:

 

    Without
Over-allotment
    With
Over-allotment
 
Public offering price           $ 10.00             $ 10.00  
Net tangible book deficit before this offering   $ (0.00 )           $ (0.00 )        
Increase attributable to public stockholders   $ 0.82             $ 0.72          
Pro forma net tangible book value after this offering and the sale of the private placement warrants           $ 0.82             $ 0.82  
Dilution to public stockholders           $ 9.18             $ 9.28  
Percentage of dilution to public stockholders             91.8 %             92.8 %

 

For purposes of presentation, we have reduced our pro forma net tangible book value after this offering (assuming no exercise of the underwriters’ option to purchase additional units) by $189,024,110 because holders of up to approximately 94.5% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per share redemption price equal to the amount in the trust account as set forth in our tender offer or proxy materials (initially anticipated to be the aggregate amount held in trust two business days prior to the commencement of our tender offer or stockholders meeting, including interest (net of taxes payable) divided by the number of shares of Class A common stock sold in this offering).

 

The following table sets forth information with respect to our initial stockholders and the public stockholders:

 

    Shares Purchased     Total Consideration     Average Price
per Share
 
    Number   Percentage     Amount   Percentage      
Initial Stockholders(1)(2)   5,000,000   20.00 %   $ 25,000   0.012 %   $ 0.005  
Public Stockholders   20,000,000   80.00 %     200,000,000   99.988 %   $ 10.00  
    25,000,000   100.0 %   $ 200,025,000   100.0 %        

 

(1)Assumes the full forfeiture of 750,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ option to purchase additional units is exercised.

 

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(2)Assumes conversion of Class B common stock into Class A common stock on a one-for-one basis. The dilution to public stockholders would increase to the extent that the anti-dilution provisions of the Class B common stock result in the issuance of shares of Class A common stock on a greater than one-to-one basis upon such conversion.

 

The pro forma net tangible book value per share as of February 9, 2021 giving effect to the offering is calculated as follows:

 

    Without
Over-allotment
    With
Over-allotment
 
Numerator:                
Net tangible book value before this offering   $ (20,849 )   $ (20,849 )
Offering costs paid in advance and excluded from tangible book value     44,961       44,961  
Net proceeds from this offering and sale of the private placement warrants     201,000,000       231,000,000  
Plus: Offering costs paid in advance, excluded from tangible book value before this offering            
Less: Deferred underwriting commissions     (7,000,000 )     (8,050,000 )
Less: Proceeds held in trust subject to redemption     (189,024,110 )     (217,974,110 )
    $ 5,000,002     $ 5,000,002  
Denominator:                
Class B common stock outstanding prior to this offering     5,750,000       5,750,000  
Class B common stock forfeited if over-allotment is not exercised     (750,000 )      
Class A common stock included in the units offered     20,000,000       23,000,000  
Less: Shares subject to redemption     (18,902,411 )     (21,797,411 )
      6,097,589       6,952,589  

 

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CAPITALIZATION

 

The following table sets forth our capitalization at February 9, 2021 and as adjusted to give effect to the sale of our 20,000,000 units in this offering for $200,000,000 (or $10.00 per unit) and the sale of 4,000,000 private placement warrants for $6,000,000 (or $1.50 per warrant) and the application of the estimated net proceeds derived from the sale of such securities.

 

    February 9, 2021  
    Actual     As Adjusted(1)  
Note payable to related party   $ 15,849     $  
Deferred underwriting commissions           7,000,000  
Class A common stock subject to possible redemption; -0- and 18,902,411 shares, actual and as adjusted, respectively(2)           189,024,110  
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; none issued and outstanding, actual and as adjusted            
Class A common stock, $0.0001 par value, 300,000,000 shares authorized; -0- and 1,097,589 shares issued and outstanding (excluding -0- and 18,902,411 shares subject to possible redemption), actual and as adjusted, respectively           110  
Class B common stock, $0.0001 par value, 20,000,000 shares authorized; 5,750,000 and 5,000,000 shares issued and outstanding, actual and as adjusted, respectively(3)     575       500  
Additional paid-in capital(4)     24,425       5,000,280  
Accumulated deficit     (888 )     (888 )
Total stockholders’ equity   $ 24,112     $ 5,000,002  
Total capitalization   $ 39,961     $ 201,024,112  

 

(1)Assumes the full forfeiture of 750,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ option to purchase additional units is exercised. The proceeds of the sale of such shares will not be deposited into the trust account, the shares will not be eligible for redemption from the trust account nor will they be eligible to vote upon the initial business combination.

(2)Upon the completion of our initial business combination, we will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable), subject to the limitations described herein whereby our net tangible assets will be maintained at a minimum of $5,000,001 and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination. The “as adjusted” amount of Class A common stock, subject to redemption equals the “as adjusted” total assets of $201,024,112 less the “as adjusted” total liabilities of $7,000,000 less “as adjusted” total stockholder’s equity of $5,000,002. The value of Class A common stock that may be redeemed is equal to $10.00 per share (which is the assumed redemption price) multiplied by 18,902,411 shares of Class A common stock, which is the maximum number of shares of Class A common stock that may be redeemed for a $10.00 purchase price per share and still maintain at least $5,000,001 of net tangible assets.

(3)Actual share amount is prior to any forfeiture of founder shares by our sponsor and the “as adjusted” share amount assumes no exercise of the underwriters’ option to purchase additional units and the forfeiture of 750,000 founder shares by our sponsor.

(4)The “as adjusted” additional paid-in capital calculation is equal to the “as adjusted” total stockholder’s equity of $5,000,002, less Class A common stock (par value) of $110, less Class B common stock (par value) of $500 less the accumulated deficit of $888.

 

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

 

Overview

 

We are a newly incorporated blank check company incorporated as a Delaware corporation on January 15, 2021 and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the private placement warrants, our capital stock, debt or a combination of cash, stock and debt.

 

The issuance of additional shares of our stock in a business combination:

 

may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock;

 

may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;

 

could cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

 

may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and

 

may adversely affect prevailing market prices for our Class A common stock and/or warrants.

 

Similarly, if we issue debt securities or otherwise incur significant indebtedness, it could result in:

 

default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;

 

acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

 

our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;

 

our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;

 

our inability to pay dividends on our common stock;

 

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

 

limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

 

increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

 

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

 

As of February 9, 2021, we had cash of approximately $25,000 and working capital deficit of approximately $20,849. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern.

 

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Results of Operations and Known Trends or Future Events

 

We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering.

 

Liquidity and Capital Resources

 

Our liquidity needs have been satisfied prior to the completion of this offering through receipt of $25,000 from the sale of the founder shares and up to $300,000 in loans from our sponsor under an unsecured promissory note. We estimate that the net proceeds from: (1) the sale of the units in this offering, after deducting offering expenses of approximately $1,000,000 and underwriting commissions of $4,000,000 ($4,600,000 if the underwriters’ option to purchase additional units is exercised in full) (excluding deferred underwriting commissions of $7,000,000 (or up to $8,050,000 if the underwriters’ option to purchase additional units is exercised in full)); and (2) the sale of the private placement warrants for a purchase price of $6,000,000 (or $6,600,000 if the underwriters’ option to purchase additional units is exercised in full), will be $201,000,000 (or $231,000,000 if the underwriters’ option to purchase additional units is exercised in full). Of this amount, $200,000,000 (or $230,000,000 if the underwriters’ option to purchase additional units is exercised in full), which includes $7,000,000 (or up to $8,050,000 if the underwriters’ option to purchase additional units is exercised in full) of deferred underwriting commissions, will be deposited into the trust account. The remaining $1,000,000 will not be held in the trust account. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act of 1940 and that invest only in direct U.S. government obligations. In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.

 

We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (which interest shall be net of taxes payable), if any, to complete our initial business combination. We will make withdrawals from the trust account to pay our taxes, including franchise taxes and income taxes. Delaware franchise tax is based on our authorized shares or on our assumed par and non-par capital, whichever yields a lower result. Under the authorized shares method, each share is taxed at a graduated rate based on the number of authorized shares with a maximum aggregate tax of $200,000 per year. Under the assumed par value capital method, Delaware taxes each $1,000,000 of assumed par value capital at the rate of $400; where assumed par value would be (1) our total gross assets following this offering, divided by (2) our total issued shares of common stock following this offering, multiplied by (3) the number of our authorized shares following this offering. Based on the number of shares of our common stock authorized and outstanding and our estimated total gross proceeds after the completion of this offering, our annual franchise tax obligation is expected to be capped at the maximum amount of annual franchise taxes payable by us as a Delaware corporation of $200,000. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the only taxes payable by us out of the funds in the trust account will be income and franchise taxes. We expect the interest earned on the amount in the trust account will be sufficient to pay our taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

 

Prior to the completion of our initial business combination, our principal use of working capital will be to fund our activities to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination, and to pay taxes to the extent the interest earned on the trust account is not sufficient to pay our taxes.

 

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We expect our primary liquidity requirements during that period to include approximately $400,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; $185,000 for legal and accounting fees related to regulatory reporting requirements; $75,000 for Nasdaq continued listing fees, $240,000 for secretarial and administrative support; and approximately $100,000 for working capital that will be used for miscellaneous expenses, insurance premiums and reserves. In addition, we may pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.

 

As indicated in the accompanying financial statements, at February 9, 2021, we had $25,000 in cash and working capital deficit of approximately $20,849. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. Management’s plans to address this uncertainty through this offering are discussed below. We cannot assure you that our plans to raise capital or to consummate an initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern.

 

Our sponsor, an affiliate of our sponsor or our officers and directors may, but none of them is obligated to, loan us funds as may be required to fund our working capital requirements. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans by our sponsor, an affiliate of our sponsor or our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor, an affiliate of our sponsor or our officers and directors, if any, as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

 

We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. In addition, we intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of this offering and the sale of the private placement warrants, if any, and, as a result, if the cash portion of the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy redemptions by public stockholders, we may be required to seek additional financing to complete such proposed initial business combination. We may also obtain financing prior to the closing of our initial business combination to fund our working capital needs and transaction costs in connection with our search for and completion of our initial business combination. There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements we may enter into following the consummation of this offering. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

 

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Controls and Procedures

 

We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2022. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer and no longer an emerging growth company would we be required to comply with the independent registered public accounting firm attestation requirement.

 

Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.

 

Prior to the closing of this offering, we have not completed an assessment, nor has our independent registered public accounting firm tested our systems, of internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as:

 

staffing for financial, accounting and external reporting areas, including segregation of duties;

 

reconciliation of accounts;

 

proper recording of expenses and liabilities in the period to which they relate;

 

evidence of internal review and approval of accounting transactions;

 

documentation of processes, assumptions and conclusions underlying significant estimates; and

 

documentation of accounting policies and procedures.

 

Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expenses in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financial reporting. Once our management’s report on internal controls is complete, we will retain our independent auditors to audit and render an opinion on such report when required by Section 404 of the Sarbanes-Oxley Act. The independent auditors may identify additional issues concerning a target business’s internal controls while performing their audit of internal control over financial reporting.

 

Quantitative and Qualitative Disclosures about Market Risk

 

The net proceeds of this offering and the sale of the private placement warrants held in the trust account will be invested in U.S. government treasury bills with a maturity of 185 days or less or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act of 1940 and that invest only in direct U.S. government obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

 

Off-Balance Sheet Arrangements; Commitments and Contractual Obligations

 

As of February 9, 2021 we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

 

Related Party Transactions

 

In February, 2021, our sponsor subscribed to purchase an aggregate of 5,750,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.004 per share. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of common stock upon the completion of this offering. The purchase price of the founder shares was determined by dividing the amount of cash contributed to us by the number of founder shares issued.

 

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Commencing on the date of this prospectus, we have agreed to pay an affiliate of our sponsor a total of $10,000 per month for secretarial and administrative support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.

 

Our sponsor, officers and directors or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers, directors or our or any of their respective affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

 

Our sponsor has agreed to loan us up to $300,000 as described in this prospectus. As of February 9, 2021, we had borrowed approximately $15,849 under such promissory note. These loans are non-interest bearing, unsecured and are due at the earlier of September 30, 2021 and the closing of this offering. These loans will be repaid upon completion of this offering out of the $1,000,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account.

 

In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor, an affiliate of our sponsor or our officers and directors may, but is not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans by our sponsor, an affiliate of our sponsor or our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor, an affiliate of our sponsor or our officers and directors, if any, as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

 

Our sponsor has agreed to purchase an aggregate of 4,000,000 (or 4,400,000 if the underwriters’ option to purchase additional units is exercised in full) private placement warrants at a price of $1.50 per warrant ($6,000,000 in the aggregate or $6,600,000 in the aggregate if the underwriters’ option to purchase additional units is exercised in full) in the Private Placement. A significant majority of the purchase price of the private placement warrants will be funded by our management team and certain members of our board of directors and associates of the Blueprint Health Advisory Network. Each private placement warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. Our sponsor will be permitted to transfer the private placement warrants held by them to certain permitted transferees, including our officers and directors and other persons or entities affiliated with or related to them, but the transferees receiving such securities will be subject to the same agreements with respect to such securities as our sponsor. Otherwise, these warrants will not, subject to certain limited exceptions, be transferable or salable until 30 days after the completion of our initial business combination. Except as set forth elsewhere in this prospectus, the private placement warrants will be non-redeemable so long as they are held by our sponsor, or their permitted transferees except as set forth under “Description of Securities — Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00. The private placement warrants may also be exercised by our sponsor, or their permitted transferees for cash or on a cashless basis. Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering.

 

Pursuant to a registration rights agreement we will enter into with our initial stockholders on or prior to the closing of this offering, we may be required to register certain securities for sale under the Securities Act. Our initial stockholders, and holders of warrants issued upon conversion of working capital loans, if any, are entitled under the registration rights agreement to make up to three demands that we register certain of our securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by us. We will bear the costs and expenses of filing any such registration statements. Please see “Certain Relationships and Related Party Transactions.”

 

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JOBS Act

 

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

 

Additionally, we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30th.

 

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions we may not be required to, among other things: (1) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; (2) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (3) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis); and (4) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.

 

PROPOSED BUSINESS

 

Overview

 

A decade ago, a group of visionary entrepreneurs and investors came together in New York City to launch a first-of-its-kind digital health community called Blueprint Health. Passionate about making a difference by improving people’s health and with conviction that advances in technology were unleashing a disruptive force that would revolutionize healthcare, this team set out to construct a platform for innovation and business creation. While building a respected brand in healthcare, they successfully rallied hundreds of innovative healthcare executives, attracted $500 million dollars of investment capital, and helped build over eighty digital health companies that created over $2 billion dollars of enterprise value. Blueprint Health successes include companies like Lumere (acquired by Global Healthcare Exchange, “GHX”), Digital Surgery (acquired by Medtronic), Doctor.com (acquired by Press Ganey), DocASAP, RubiconMD, Avail, Health Recovery Solutions, Andros, Artemis Health, and Healthify. Over the years, the Blueprint Health network – its founders, investors, mentors, and portfolio company principals – have created and led enterprises that not only scaled rapidly and returned significant capital to shareholders but also transformed their respective verticals, positively influencing the wellbeing of millions of people around the world. Along the way, this group of digital health innovators has amassed unrivaled knowledge, experience, and connections that continue to power many large, market-leading companies in healthcare today. For example, individuals in the Blueprint Health network have helped found and lead prominent companies including Phreesia, Teladoc, Everyday Health, Best Doctors, Kryuus, Liazon, and Zocdoc.

 

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Blueprint Health Merger Corp. (“BHMC”) seeks to draw on the past experience of the Blueprint Health founders. BHMC, led by Dr. Rajiv Kumar, Mathew Farkash, Dr. Brad Weinberg, and Neil Parikh, will leverage the management team’s expertise and connections to successfully partner with the next generation of transformative digital health companies. BHMC will seek to invest in digital healthcare businesses that will benefit from being public in the acceleration of their value-creation strategies. We believe BHMC is uniquely positioned to engage with a high volume of potential investment opportunities sourced through our management team’s network of existing relationships, including Blueprint Health’s portfolio companies and their founders, venture capital and private equity firms that are part of our investment network, health plans and health systems that have previously partnered with us, and the Blueprint Health Advisory Network.

 

The BHMC Opportunity

 

When Blueprint Health was first launched in 2010, digital health was an emerging concept. The first cohort of digital health companies were promising but had yet to prove their ability to scale efficiently, drive widespread adoption, and capture significant market share from healthcare incumbents. They faced significant challenges such as a lack of proven efficacy, byzantine regulatory hurdles, unclear reimbursement pathways, and low adoption of digital health tools by consumers, employers, payers, and providers. A decade later, many digital health solutions have published clinically significant outcomes, achieved CDC-recognition or even FDA approval, become reimbursable as a medical claim, and climbed the rankings of the most-downloaded mobile applications by consumers. Self-insured employers, health plans, and health systems have enthusiastically embraced digital health platforms and programs as they seek to improve the patient experience, optimize workflows, and rein in soaring costs. These profound changes have led to a coming-of-age moment in the digital health space, as evidenced by companies that have gone public like Teladoc, Phreesia, GoodRX, Livongo, Amwell, Accolade, One Medical, and Peloton, who have demonstrated the wide reach and transformative impact of digital health.

 

These companies represent just the tip of the digital health iceberg. A large and growing cohort of businesses are developing innovative new models, rapidly acquiring customers, disrupting industry incumbents, and voraciously capturing market share. While these market leaders were already benefiting from major industry tailwinds, COVID-19 has acted as a catalyst that has spurred further acceleration of growth and adoption. As the digital health industry expands, we believe the number of high-quality businesses that deserve to be public companies will continue to rise rapidly, and that these public companies will scale their platforms in part through acquisitions. Recent examples include Teladoc’s acquisition of Livongo to create a virtual care and chronic condition management platform as well as Accolade’s acquisition of 2nd.MD to nearly double their addressable market and complement their healthcare navigation suite. As digital health companies seek larger amounts of investment capital to scale their businesses, look to capitalize on strategic M&A opportunities, and strive to provide liquidity for employees and investors, going public through a digital health-focused Special Purpose Acquisition Company (“SPAC”) represents a unique and promising pathway.

 

The Digital Health Opportunity

 

The COVID-19 crisis exacerbated longstanding issues of access within our existing healthcare infrastructure and traditional care models. As a result, we have witnessed accelerated demand for convenient digital health solutions, leading to expanded innovation and a key shift in the healthcare landscape. The enormous digital health category represented a $350 billion opportunity in 2019, which McKinsey estimates will grow at least 8% annually through 2024. Digital health companies provide enterprises and consumers with technology-based solutions to improve the patient experience and reduce healthcare costs. Key pillars of the digital health space, including technology-centric primary care, telemedicine, wearable devices, artificial intelligence, and analytics, target a growing audience with large, unmet needs.

 

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In response to the soaring demand for digital health solutions, Rock Health estimated venture capital funding for digital health companies reached an all-time high in 2020 of $14.1 billion, more than double the total amount of funding in 2019. Ten digital health categories saw their highest funding years ever, and the same enthusiasm translated into public markets. Mercom Capital Group noted 2020 as the biggest year for digital health IPOs, with six companies raising over $6 billion. Since the beginning of 2020, there have been eight announced or closed SPAC transactions with healthcare technology companies totaling over $25 billion. Accompanying accelerated activity in capital markets, large healthcare incumbents and technology giants have made significant investments acquiring assets that extend their footprint in the healthcare ecosystem – the top 20 digital health M&A transactions in 2020 totaled $50 billion.

 

Underlying all of this growth, we believe there are five major catalysts driving digital health that make this an attractive opportunity:

 

Consumerization of Healthcare

Increasing patient cost sharing and better technology have contributed toward patients engaging with digital health platforms to better inform their financial and personal health decision-making. Similarly, employers are seeking solutions that help their employees navigate the complex healthcare landscape.

 

Massive COVID-19 Tailwinds

COVID-19 has caused a dramatic shift in consumer and enterprise behavior. Patients, providers, and payers have been forced to rapidly adopt telemedicine and other technology-enabled services as a first line of care. For example, a survey of specialists conducted by GlobalData found that fewer than half of cardiology, gastroenterology, pulmonology, and respiratory specialists used telehealth before COVID-19, but almost 80% embraced the technology during the pandemic. Express Scripts, a large pharmacy benefit manager, noted far greater adoption of digital tools and apps for pharmacies, with a 47% increase in average refills per week via the Accredo mobile app. We expect this level of activity and comfort from providers and consumers to continue and accelerate in the post-COVID-19 world.

 

Data Liquidity

The ability to access and utilize data has grown in importance and become the backbone of digital health offerings. Importantly, increased data liquidity allows for more sophisticated analytics, longitudinal patient understanding, and real-time interventions, enabling more coordinated care and better outcomes.

 

Proven Efficacy, Scalability, and Return on Investment

As healthcare costs and outcomes become increasingly important with the continued shift to value-based care paradigms, digital health solutions have proven their ability to produce ROI and improve patient outcomes while also utilizing technology infrastructures that are immensely scalable. A review by Becker’s Healthcare found that more than 75% of hospitals and health systems have implemented at least one advanced digital health tool, ranging from virtual care to the use of analytics and artificial intelligence. Similarly, payers have readily adopted digital health platforms to automate activities, such as data processing and collection, which saves 35-40% in administrative and medical costs according to McKinsey.

 

Regulation and Reimbursement Mechanisms

Government agencies, which dictate how money and data flow, greatly influence digital health adoption. On the reimbursement front, Centers for Medicare & Medicaid Services (“CMS”) and other government agencies have demonstrated a commitment to digital health and virtual care through telehealth payment policies during the pandemic. On data interoperability, CMS released final data blocking regulations last year requiring Electronic Health Record (“EHR”) vendors to make patient data more available via application programming interfaces (“APIs”), unlocking an impediment to innovation.

 

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Areas of Focus

 

Based on the experience and expertise of the Blueprint Health network, we have identified key areas of focus. We believe our platform is uniquely positioned to source companies, conduct due diligence, and add ongoing operating value in these areas.

 

Enterprise-First Companies

 

Engagement

At the core of digital health is the ability to engage patients at every point across their healthcare journey. Solutions increasingly incorporate better understanding of patient behavioral and utilization patterns to enhance user engagement with more convenient and effective modalities. Technologies like Artificial Intelligence (“AI”) have also enabled various digital health companies to fill key gaps for enterprises that are lacking in patient engagement.

 

Navigation
Several types of companies help patients, health plan members, and/or employees navigate the complexities of the healthcare ecosystem. This category includes digital health program aggregators and marketplaces, benefits navigation platforms, and care guidance tools (e.g. cost transparency, provider search, second opinion, and decision support).

 

Wellbeing
Wellbeing solutions continue to gain popularity and adoption as consumers seek to take personal responsibility for their own health. We will be targeting solutions that include nutrition, weight loss, physical activity, and stress management programs sold to employers, health plans, and providers.

 

Digital Therapeutics
Digital therapeutics are condition-specific health interventions that help an individual manage or reverse their illness. As they continue to prove that they can replicate and often improve upon the outcomes delivered by in-person, onsite health interventions, and in some cases medications, these solutions continue to be rapidly adopted by enterprises. Digital therapeutics continue to expand in their use cases across various specialty and chronic conditions.

 

Mental Health Services
Telemedicine has de-stigmatized and increased access to behavioral health programs and mental health therapy. A growing global mental health epidemic, further exacerbated by COVID-19, is driving demand for these solutions.

 

Artificial Intelligence
Personalization is one of the key elements for driving sustained engagement in digital health solutions. Machine learning is enabling these programs and platforms to provide unique and increasingly more effective user experiences including for personalized medicine. Additionally, AI is being used more effectively across larger data categories and incorporating evidence based guidelines to optimize and enhance care recommendations and workflows in all settings of care.

 

Advanced Data/Analytics
From medical records and claims data to wearable health devices and social determinants of health data, digital health companies have access to a massive amount of information about an individual’s health and behaviors. Several exciting companies are harnessing this data to provide critical and actionable insights for employers, health plans, life sciences, and providers.

 

Provider Tools
A large cohort of companies is improving upon the patient and provider experience in clinical settings by developing new clinical decision-making solutions, administrative workflow optimization tools, and patient communication platforms.

 

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Consumer-First Companies

 

Pharmacy
Digital pharmacies are pioneering same-day medication delivery for customers. These companies make it easier for patients to quickly get the medications they need, coordinate refills and renewals, and help patients better understand out-of-pocket costs. Some have combined telemedicine and pharmacy to meet more of their patients’ needs.

 

Telemedicine
Virtual medical care has become ubiquitous during the COVID-19 pandemic, and patients will continue to leverage these services in the future. We plan to explore new angles within the telemedicine space, including platforms that target specific conditions or populations.

 

Primary Care

Software is empowering a new generation of primary care clinics to provide a superior patient experience when it comes to scheduling, billing, medical record access, virtual visits, and provider-patient communication.

 

Insurance
The consumer experience of purchasing health insurance is notoriously painful and difficult. Online insurance platforms are disrupting the industry by reducing the cognitive load on consumers and guiding them to select the right plan based on their specific needs as well as providing more advanced technology solutions that engage and inform consumers regarding their ongoing care utilization.

 

Wellbeing

Consumers have demonstrated an insatiable appetite for digital-first nutrition, physical activity, weight loss, meditation, and sleep solutions that improve their overall sense of wellbeing.

 

Wearables and Remote Monitoring

While the first generation of fitness wearables were limited in scope and engagement, the next generation has shown that broader capabilities combined with engaging app experiences can attract consumers and change behavior in a sustainable way. The increasing quality of data from these wearables are enabling clinical capabilities as witnessed by the latest Apple Watch’s ECG functionality. In addition, there are increasingly sophisticated solutions that provide methods of collecting more specific and deeper patient information that enhance exams and other direct patient engagement solutions.

 

Strategy and Competitive Advantages

 

Our strategy is to identify and complete our initial business combination with a company that complements the experience of our management, board of directors, and advisory group and that can benefit from their operational expertise. Our selection process will leverage our team’s broad and deep relationship network, unique industry experience and proven deal sourcing capabilities to access a broad spectrum of differentiated opportunities. We intend to capitalize on the following competitive strengths in our pursuit of a target business:

 

Proprietary Network & Relationship Driven Target Sourcing

Given the extensive network of the BHMC management team, our Blueprint Health Advisory Network, and our board of directors, we will have a highly proprietary sourcing engine from which we will proactively search for a potential acquisition. These individuals can put us in direct contact with nearly any company doing business in healthcare. Our experience in managing a network of advisors will enable us to leverage these relationships to gain unique insights and access into our target companies.

 

Operating Expertise

Our management team, Blueprint Health Advisory Network, board of directors, and strategic partners have invested in over 200 companies. We believe our experience in founding, running, scaling, and investing in companies will make us the ideal partner to companies. Our experience includes customer and sales strategy, marketing and public relations, technology development, finance, recruiting and human resource, and capital markets strategy. In addition to our management team, we will leverage the members of our board of directors and Advisory Network to help scale and assist the company with continued growth post-merger.

 

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Marketing, Public Relations, Customer Acquisition, and Sales

Our management team has extensive experience in marketing and public relations, and we believe this will uniquely help our target company during the merger and post transaction. We will assist our target in developing a compelling narrative around operations and growth to be easily digestible by public markets and potential customers. We also have an extensive network of best-in-class marketing and public relations partners that we have worked with in the past and are able to call upon to assist our company. Additionally, our team, advisors, and board are uniquely qualified to assist our target company with business development and sales strategy as they grow into new markets.

 

Healthcare and Technology Expertise

Our management team has a combined more than three decades of experience operating and investing in healthcare and technology companies. We are positioned to source, diligence, and complete a merger with a target company. We believe our experience using technology to improve business performance will yield superior results for our shareholders.

 

Our Management Team

 

Our executive officers include our Chief Executive Officer Dr. Rajiv Kumar, our Director Neil Parikh, our President Mathew Farkash, and our Chief Operating Officer and Chief Financial Officer Dr. Brad Weinberg.

 

Dr. Rajiv Kumar, our Chief Executive Officer and Director, previously served from 2016 to 2020 as Chief Medical Officer of Virgin Pulse, a private equity-backed software-as-a-service company in the enterprise digital health space, where he was a key member of the executive leadership team and worked closely with the Chief Executive Officer and board of directors on company vision, strategy, and M&A. His responsibilities included serving as President of the Virgin Pulse Institute and leading corporate development, data analytics, and the company’s Science Advisory Board. During his tenure at Virgin Pulse, the company grew to be the dominant player in the employee health and wellbeing industry, reaching approximately $300 million in annual revenue in 2020 and executing on nine M&A transactions totaling nearly $1 billion in enterprise value. Prior to Virgin Pulse, from 2006 to 2016, he was the co-founder and Chief Executive Officer at ShapeUp, a venture capital-backed software-as-a-service company acquired by Virgin Pulse in 2016. Dr. Kumar is a member of the board of directors of Providence Mutual, the nation’s fifth oldest insurance company. He is also an Entrepreneur-in-Residence at Cue Ball Capital, a venture capital firm based in Boston, MA. Dr. Kumar was an early investor and mentor at Blueprint Health, and he continues to invest primarily in digital health companies, leveraging his extensive experience in enterprise software and services. He holds an MD from the Brown University School of Medicine and a BA in business economics also from Brown University.

 

Neil Parikh, our Director, will be designated as Vice Chairman of the Board upon the closing of this offering. Mr. Parikh co-founded, and now serves as a Director of, Casper Sleep Inc, which he helped grow from inception in 2014 to IPO. He served as Casper Sleep’s first Chief Operating Officer and subsequently as its Chief Strategy Officer until January 2021. Casper was one of the fastest growing Direct to Consumer brands ever, reaching revenues of $1 million in their first month, $100 million in their first calendar year, and over $1 billion since its inception. Mr. Parikh worked across the business from business development, operations, supply chain, customer service, as well as marketing and public relations. Mr. Parikh has also served as an investor or advisor to 100+ disruptive technology companies including Hyliion (NYSE: HYLN), Relativity Space, Ro, Affirm (NASDAQ:AFRM), Oura, Care/Of, and Simulate Brands. He holds a BA in Commerce, Organizations, and Entrepreneurship from Brown University, where he was Class President. Mr. Parikh is also a co-author of seven patents, ranging from mattresses to robotics.

 

Mathew Farkash, our President, is a founding partner of Blueprint Health, an early-stage healthcare investment firm that has invested in over 80 digital health companies, since 2011. Blueprint Health portfolio companies have raised over $500 million in investment capital and have generated over $2 billion in cumulative enterprise value. At Blueprint Health, he created and managed the Blueprint Health Mentor & Advisor Network, which was a group of 200 healthcare & technology executives and investors who helped accelerate the growth of their portfolio companies and provided access to decision makers across the healthcare industry. Since 2018, Mr. Farkash has also served as an advisor to Epsilon Health Investors, a healthcare-focused strategic investor, supported by and organized for a consortium of five leading regional not-for-profit health systems across eight states and including 29 hospitals, 450+ non-acute sites of care and $7B+ in net patient revenue. From 2017 to 2018, he served as the Interim Vice President of Strategy and Business Development at Touch Surgery, a Blueprint Health Portfolio Company and helped them raise their private financing rounds and refine and execute their US & global commercial plan prior to their acquisition by Medtronic. Mr. Farkash is an international speaker having presented in Beirut, Copenhagen and Dubai on topics like entrepreneurship, innovation and resiliency. He is also a visiting faculty member on digital health entrepreneurship at Università della Svizzera italiana. He holds an MBA from NYU Stern School of Business and a BA in Public and Private Sector Organizations from Brown University.

 

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Dr. Brad Weinberg, our Chief Financial Officer and Chief Operating Officer, is a founding partner of Blueprint Health, an early-stage healthcare investment firm that has invested in over 80 digital health companies, since 2011. Blueprint Health portfolio companies have raised over $500 millionn in investment capital and have generated over $2 billion in cumulative enterprise value. Prior to Blueprint Health, from 2006 to 2011, he was the co-founder and Chief Technology Officer at ShapeUp, a venture capital-backed software-as-a-service company acquired by Virgin Pulse in 2016. Prior to ShapeUp, from 2003 to 2005, he served as a senior investment analyst at the Brown University Endowment. He holds an MD from the Brown University School of Medicine and a BA in business economics also from Brown University. He is a CFA charterholder and a member of the CFA Institute.

 

Our Independent Directors

 

In addition to Dr. Kumar and Mr. Parikh, three additional individuals have agreed to serve on our board of directors as independent directors following the completion of this offering.

 

Richard J. Harrington, Former President & CEO of Thomson Reuters Corporation; Former Member of the Board of Directors at Aetna and Xerox Corporation 

 

Richard J. Harrington, our Chairman nominee, is the former President and Chief Executive Officer of The Thomson Reuters Corporation. As CEO from 1997 to 2008, he led its transformation from a diverse newspaper holding company into the leading global provider of online business information, software, and services—including healthcare information services. During his tenure he quadrupled the cash flow and market value of the company and created one of the world’s largest business-to-business information media companies. Mr. Harrington led more than $60 billion in acquisitions and disposals, with two of the most well-known acquisitions being Reuters and Westlaw. He previously held a number of senior leadership positions within Thomson Corporation since 1982.

 

Mr. Harrington served on the board of directors of Aetna from 2008 to 2018. He also served on the board of directors of Xerox Corporation from 2004 to 2017. During his time at Aetna and Xerox, he was involved in over $100 billion in acquisitions. Mr. Harrington is currently the Chairman Emeritus and Senior Advisor at Cue Ball, a Boston-based venture capital group.

 

Mr. Harrington has received many honors during his career, including the “Legend in Leadership” award from Yale University, the CEO of the Year award from the Executive Council, and the “Man of the Year” award from the National Executive Council for his many philanthropic activities. He was formerly the Chairman of the Thomson Reuters Foundation. He is also a New York Times best-selling co-author of Heart, Smarts, Guts and Luck. Mr. Harrington began his professional career with Arthur Young & Co., where he became a licensed C.P.A. He is a graduate of University of Rhode Island, where he was also awarded an honorary doctorate degree.

 

Mark Blake, Global Head of Strategy & Corporate Development, S&P Global; former EVP of Strategy and Corporate Development at Cardinal Health

 

Mark Blake, our director nominee, joined S&P Global, Inc. in 2017 as the Global Head of Corporate Development, and became Global Head of Strategy and Corporate Development in early 2020. Mr. Blake previously served as EVP of Corporate Development at Nielsen from 2014 to 2017 and EVP of Strategy and Corporate Development at Cardinal Health from 2009 to 2014. As the enterprise transaction leader of three industry-leading corporations, over the past eleven years Mr. Blake has been involved in nearly 100 acquisitions, investments and divestitures with a total value of more than $50 billion.

 

In his current role, Mr. Blake is responsible for developing the strategy for overall company growth, sourcing acquisition opportunities, executing transactions and cultivating strategic relationships. He also leads S&P Global Ventures fintech investing for the company. Mr. Blake led the transaction to acquire key ESG assets from RobecoSAM in 2019, was instrumental in the acquisition of artificial intelligence and machine learning provider Kensho in 2018, and played a key role in S&P Global’s recently announced $44 billion merger with IHS Markit.

 

Mr. Blake has almost a decade of experience in healthcare from his tenure at Cardinal Health, a leading healthcare distributor and services provider, and Medco Health Solutions, a leading pharmacy benefit manager that is now part of Express Scripts. At these companies he completed partnerships and transactions in distribution, sourcing, digital health, and healthcare services.

 

Mr. Blake’s additional work experience includes turnaround consulting and investment banking. He received a bachelor’s degree in Government from Harvard College and an MBA in Finance and Accounting from the Wharton School of Business. Mr. Blake also serves on the board of WhyHunger, a charitable organization that focuses on addressing the root causes of hunger and food insecurity.

 

Rachel Winokur, Chief Executive Officer of NeueHealth

 

Rachel Winokur, our director nominee, is a seasoned operator and investor with years of experience in health care. She currently serves as the Chief Executive Officer of NeueHealth, the care delivery, provider enablement, and network management business within Bright Health Group, a role she has held since 2020. As CEO of NeueHealth, Ms. Winokur leads the company’s expansion into new geographies, including all of its health system and provider relationships, as well as oversees all of Bright Health’s owned and affiliated provider organizations, including a full platform of provider enablement and risk management solutions. Ms. Winokur helped found Bright Health in 2016 as its Chief Business Officer, where in addition to the above responsibilities, she also had accountability for mergers, acquisitions, fundraising, and overall business strategy.

 

Before joining Bright Health, Ms. Winokur worked for Aetna as a senior executive from 2011 to 2015 where she helped found and lead Healthagen, Aetna’s payer-neutral population health management business. Prior to Aetna, Ms. Winokur worked for the Carlyle Group from 2007 to 2011 as a health care private equity investor. Her previous experience includes roles at Datascope from 2003 to 2007, Bertelsmann from 1999 to 2003, and Goldman Sachs from 1994 to 1997.

 

Ms. Winokur currently sits on the board of Maven and is an advisor to Greycroft Partners and Primetime Partners. She holds an MBA from Stanford University’s Graduate School of Business and a Bachelor of Science in Engineering, with honors in both biomedical and electrical engineering, from Duke University.

 

The Blueprint Health Advisory Network

 

In addition to our management team and board of directors, a group of advisors will help us identify and conduct diligence on a target company, as well as assist the target company with business development post-merger. This group consists of individuals that the management team has generally known and worked with in the past and have proven to be immensely helpful in unlocking value for our portfolio companies.

 

We expect our Blueprint Health Advisory Network to:

 

Assist in sourcing and negotiations with potential targets

 

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Provide industry, customer, and market insights when identifying and assessing potential companies

 

Assist our management team with diligence efforts

 

Help create value for a target company through assistance with strategy, operations, and business development

 

In this regard, our special advisors will fulfill some of the same functions as our board members; however, they will not owe any fiduciary obligations to us nor will they perform board or committee functions or have any voting or decision-making capacity on our behalf. They will also not be required to devote any specific amount of time to our efforts. While certain of our advisors are members of our sponsor, none of our advisors have any employment, consulting fee or other similar compensation arrangements with us.

 

Our group of advisors includes:

 

Ana Gupte, Ph.D, Former Chief Strategy and Innovation Officer at Florida Blue Cross Blue Shield & GuideWell

 

Dr. Gupte is a Strategy, Finance and Innovation Leader and Principal Advisor with over two decades of experience in the field of Healthcare Services, Digital Health and Therapeutics. Dr. Gupte is a former Healthcare Equity Analyst with over a decade on Wall Street bookended by senior Corporate Strategy, Finance & Management Consulting roles. Most recently, she served as Senior Vice President, Chief Strategy & Innovation Officer at Florida Blue Cross Blue Shield & its parent GuideWell. Prior to the Street, she served as Managing Director Corporate Strategic Planning at Aetna, Inc, and also headed up the WorldWide Drug Development Strategy Department at Pfizer. She started her career in healthcare as a Management Consultant at McKinsey & Company. Her thought leadership on all things healthcare over 12 years of equity coverage in the firms of Sanford C. Bernstein, and Leerink Partners garnered multiple awards including Top 3 rankings by All America Institutional Investor and the FT StarMine Top Stock picker award. Her current efforts are focused on advising privately backed healthcare tech enabled services and digital health companies leveraging Data Science, Predictive Analytics, AI, ML, RPM, IoT and Blockchain to solve critical problems in healthcare, where she brings differentiated knowledge about the Payor, provider and Pharma R&D end markets to bear.

 

Anthony Tjan,  Co-Founder and CEO of Cue Ball Group, Co-Founder and Executive Chairman of MiniLuxe

 

Anthony Tjan is the CEO of the Cue Ball Group, an evergreen investment firm based in Boston. His experience includes serving as the former Executive Chairman of ShapeUp, on the prior boards of Virgin Pulse and TB12, and currently as Chairman of WaitWhat, the producers of Meditative Story, the highly-popular mindfulness podcast. He has led investments in the caregiving sector (e.g. IanaCare and Helpr), enterprise health productivity (e.g. Sopris Health and ProofPilot), and wellness (e.g. Athena Club and MiniLuxe). Prior to Cue Ball, Mr. Tjan served as the Chief Strategic Advisor to Richard Harrington (former CEO of Thomson Reuters Corporation), where he helped drive the organization’s transformation including advising on several aspects of its enterprise health care information businesses and numerous mergers and acquisitions. Mr. Tjan started his career at McKinsey working primarily in its health practice and media and technology practice. He was the Vice Chairman of the Parthenon Group for 15 years. His non-profit activity includes serving on the MIT Media Lab Advisory Council and the advisory boards of both the Cure Alzheimer’s Fund and the McCance Center for Brain Health at Massachusetts General Hospital. Mr.Tjan is a New York Times best-selling author, and has written over 100 articles for Harvard Business Review and in 2018 he received the Ellis Island Medal of Honor.

 

 

Aran Ron, MD, Former President and Chief Operating Officer of Group Health Inc / Emblem, Former Chief Medical Officer of Oscar Health Plan

 

Dr. Ron is a physician trained in internal medicine at New York Hospital and the former President and Chief Operating Officer of Group Health Inc/Emblem, Medical Director at Oxford Health Plan and at New York Downtown Hospital. He served as CEO of Partners Health Plan (a special needs MLTC plan), an Operating Partner at Bessemer Venture Partners and was part of the founding team and Chief Medical Officer of Oscar Health Plan. He has published articles in medical journals, served on local and national committees such as URAC and on non-for profit boards St. Christopher Inc and Metropolitan Council on Poverty as well as lectures at Cornell Medical College and Columbia Business School. He recently co-founded Kaden Health – a virtual telemedicine company focusing on treating patients with opioid disorders. He is an investor, board member and consultant to various early stage companies and has participated in several fundraising rounds and exits including Data Driven Delivery System, Pricefalls, Accuity Driven Systems, Nalari, Oscar, ControlRad, Capsule, Epicured, as well as an advisor and LP to Israel BioMed Fund and LifeForce Capital Fund.

 

Benjamin K. Chu, M.D., MPH, MACP, Board Member for Geisinger Health System; former CEO of the Memorial Hermann Health System and former Group President for Kaiser Permanente’s SoCal and Georgia regions

 

Dr. Chu has more than four decades of healthcare experience as a clinician, administrator and policy advocate placing strong emphasis on physician integration, population health and health systems innovation to drive for better outcomes and performance. In January 2018, Dr. Chu joined the Health Practice at Manatt, Phelps and Phillips and is currently a senior advisor with the firm. Prior to this, Dr. Chu has served in many senior level leadership positions including: President and CEO of the Memorial Hermann Health System; Executive Vice President and Group President for Kaiser Permanente’s Southern California and Georgia regions; President of the New York City Health and Hospitals Corporation; Senior Associate Dean at the Columbia College of Physicians and Surgeons; and Vice President; Associate Dean at the NYU School of Medicine; and Acting Commissioner of Health for the New York City Department of Health.

 

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Dr. Chu currently serves on the Boards of the National Committee for Quality Assurance and the Geisinger Health System. In 2015 he was elected to the National Academy of Medicine. He has served on the Boards of the American Hospital Association (Chair in 2013); The Joint Commission; the Commonwealth Fund; and the American Legacy Foundation.

 

Brian J. Marcotte, Former President and CEO of Business Group on Health

 

Brian Marcotte is the former President and CEO of Business Group on Health, the leading advocate for large employers in healthcare policy and benefits strategy. At the Business Group, Mr. Marcotte established the Health Innovations Forum, which helped accelerate market traction for promising digital health startups, and the Executive Committee on Value Purchasing, a cross-industry council focused on shifting the market toward value-based pricing and provider accountability. Prior to the Business Group, Mr. Marcotte was Vice President of Compensation and Benefits for Honeywell International with responsibility for executive compensation, global compensation and benefit programs, and implementing innovative solutions to manage the company’s $500M annual health care spend while helping employees maximize their experience with the healthcare delivery system. Mr. Marcotte is currently working in a board or advisory capacity with Carrot Fertility, Castlight Health, Consumer Medical, Sword Health, Socrates AI, WithMe and UdoTest.

 

Chip Kahn, President and CEO of the Federation of American Hospitals

 

Since June 2001, Chip Kahn has served as President and CEO of the Federation of American Hospitals, the national advocacy organization for tax-paying hospitals, representing nearly 20% of all U.S. hospitals. In 2016, he was appointed the co-chair of the Measure Applications Partnership (MAP) Coordinating Committee of the National Quality Forum (NQF), a multi-stakeholder private-public partnership for developing and implementing a national strategy for health care quality measurement. He also is a former member of the NQF’s Governing Board.

 

Additionally, he serves on the National Academies of Sciences, Engineering, and Medicine’s Roundtable on Quality for People with Serious Illness, as a member of the board of directors of AdhereHealth, a medication therapy management company, and on the U.S. Executive Council for the Center for Digital Innovation (CDI). He is also a founding member and co-chair of the newly formed Future of Health (FOH) community bringing together senior leaders from leading health organizations around the world. Previously, Mr. Kahn served as a principal of the former Hospital Quality Alliance (HQA) and as Commissioner of the American Health Information Community, a former federal policy advisory panel advising then-HHS Secretary Michael Leavitt about the diffusion of health information technology.

 

Christina LaMontagne, Former COO of Pill Club

 

Christina LaMontagne is a health technology leader with over 15 years of experience scaling consumer-facing companies and leading critical business functions. Her specialties include operations, business development, investments, team building and M&A. As COO at Pill Club, a leading women's health start-up, from 2020 to 2021, Ms. LaMontagne helped grow the business to over $100M in profitable ARR. Previously she was an early employee at NerdWallet from 2013 to 2017, where she held multiple senior roles as the company rapidly scaled to >$100M in annual revenue across multiple business units. She has also led digital M&A at Johnson & Johnson and was one of the earliest institutional digital health investors at VC firm Physic Ventures.

 

Dunston Almeida, Former Head of Strategy and M&A at Zelis Healthcare and eviCore

 

Dunston Almeida is a private healthcare investor focused on digital health and healthcare service businesses. Mr. Almeida formerly served as Executive Vice President of Strategy, Product Development and M&A at Zelis completing over $40 billion worth of Merger and Acquisition transactions over the past 10 years. From 2013 to 2018, he served as Executive Vice President of Strategy and Business Development at eviCore, the largest medical benefit manager sold to Express Scrips for $3.6 billion. Before that from 2010 to 2013, Mr. Almeida headed up Emerging Markets strategies at Medco, a leading pharmacy benefit manager which was acquired by Express Scrips for $33 billion. He also serves on the Board at PurpleLab, a provider of real-word evidence medical and pharmacy claims analytics for payers, life sciences and genomics companies.

 

Errol Pierre, Senior Vice President of State Programs at Healthfirst, Inc

 

Errol Pierre is the Senior Vice President of State Programs at Healthfirst, Inc, the largest non-profit health plan in New York State serving 1.6 million members. Prior to Healthfirst, Mr. Pierre spent over 12 years at Empire BlueCross BlueShield where he held various leadership roles in Sales and Strategy until leaving the company as the Vice President and Chief Operating Officer in 2019. Lastly, he is an adjunct professor at New York University teaching various courses for in Healthcare and Business.

 

Lisa Prasad, Chief Innovation Officer for the Henry Ford Health System

 

Lisa Prasad is the Chief Innovation Officer for the Henry Ford Health System where she has successfully created and driven the institution’s strategy for leveraging technology, intellectual property, and clinical expertise – all designed to improve quality and access of patient care, create value for the institution and its partners, and foster economic development. She has led the System’s successful entry into international markets with hospital projects in the Middle East and India that have created a future revenue pipeline of over $250 million. She also oversees the Global Technology Program that partners with early stage companies in Israel and India and attracts them to the U.S. for the benefit of local patients and clinicians. Previously, she has served as an executive at the University of Pennsylvania managing $170 million operating budget as well as $200 million in annual capital projects.

 

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Lorna Friedman, Senior Partner at Mercer

 

Dr. Lorna Friedman is a Senior Partner with Mercer’s Global Benefits Services with extensive experience designing health solutions, a role she has held since 2017. Previously, Dr. Friedman was the Director of Health Benefits for Bupa Global from 2015 to 2017, where she oversaw health and network operations across 90 countries. Prior to that, she was a Partner in Mercer’s Global Health Management practice from 2010 to 2015. Her business career includes 20 years at both domestic and international health plans including Medicare and Medicaid. Dr. Friedman trained in Pediatrics at The Children’s Hospital of Philadelphia. She has held academic and teaching positions at University of Pennsylvania and Cornell Medical College and received an MBA from Columbia University. Dr. Friedman has published and presented on issues regarding public health at the HLTH conference, The Institute of Medicine, the Agency for Health Care Quality and Research, and the International Aids conference among others. Dr. Friedman has served on several boards with a focus on improvising access to health including the Global Business Group on Health, The American Council on Exercise and the March of Dimes. In 2020 she was named Health Consultant of the Year by Consulting Magazine.

 

Michelle Snyder, Partner at McKesson Ventures

 

Michelle Snyder is currently a Partner at McKesson Ventures, a venture firm investing in the healthcare technology and services space.  She brings over 25 years healthcare industry experience in marketing, business development, strategic planning and general management and is recognized as an early leader in the digital health space. Prior to joining McKesson Ventures, she was the Chief Marketing Officer at Welltok, a leading consumer health activation company. Ms. Snyder was also one of the early executives at Epocrates and worked for over a decade to build the company into one of the most recognized brands among clinicians. Ms. Snyder has also served as an Executive-in-Residence at InterWest Partners and has held consulting and policy positions at The Wilkerson Group, the Lewin Group and the Georgetown Center for Health Policy Studies.

 

Oliver Kharraz, MD, CEO and Founder of Zocdoc

 

Dr. Kharraz, is CEO and founder of Zocdoc, a digital health company streamlining the physician-patient scheduling ecosystem. Prior to Zocdoc, Dr. Kharraz was an Associate Principal at the global management consulting firm McKinsey & Company. During his seven-year tenure at McKinsey & Co., Dr. Kharraz developed and implemented new patient utilization models for the national health services of a number of governments and major hospital chains. Over the course of his wide-ranging career, Dr. Kharraz has accrued comprehensive experience effecting change and building efficiency in large scale healthcare organizations using information technology.

 

Rich Roth, Chief Strategic Innovation Officer for CommonSpirit Health

 

Rich Roth is the Chief Strategic Innovation Officer and Senior Vice President for CommonSpirit Health, the largest non-profit health system in the United States with 142 hospitals and more than 1,000 care centers serving 21 states. Mr. Roth leads CommonSpirit Health’s innovation efforts, which seek to create and test novel services, programs, partnerships, and technologies that challenge the status quo and have the potential to reduce the cost of care, improve quality, and increase access to services. Working in concert with CommonSpirit Health employees and physicians, Mr. Roth anticipates emerging trends and technologies with the goal of incubating, studying, and scaling efforts to improve care. Mr. Roth regularly advises venture capital organizations.. Mr. Roth also serves on the board of Shields Health Solutions, PriMed and Truveta. In 2020, Mr. Roth was named one of the 25 Most Innovative Individuals in the health industry by Modern Healthcare.

 

Sachin H. Jain, MD, MBA, FACP President and Chief Executive Officer SCAN Group and SCAN Health Plan

 

Dr. Jain is the current president and CEO of SCAN Group and Health Plan.  Most recently, Dr. Jain served as president and CEO of CareMore Health and Aspire Health, where he led growth, diversification, expansion and innovation of these companies and they grew to serve over 180,000 patients in 32 states with $1.6B in revenues.

 

Dr. Jain was previously Chief Medical Information & Innovation Officer at Merck & Co. He also served as an attending physician at the Boston VA-Boston Medical Center and a member of faculties at Harvard Medical School and Harvard Business School. From 2009-2011, Dr. Jain worked in the Obama Administration, where he was senior advisor to Donald Berwick when he led the Centers for Medicare & Medicaid Services (CMS), and was the first deputy director for policy and programs at the Center for Medicare and Medicaid Innovation (CMMI).  He has published over 100 peer-reviewed articles in journals such as the New England Journal of Medicine, JAMA and Health Affairs, and was an editor of the book, “The Soul of a Doctor” (Algonquin Press). Dr. Jain is adjunct professor of medicine at the Stanford University School of Medicine and a contributor at Forbes. In addition, he serves on the Board of Directors at Make-A-Wish America. 

 

Shelby Decosta, President of UCSF Health Affiliates Network and Chief Strategy Officer of UCSF Health

 

Shelby Decosta is the President of UCSF Health Affiliates Network and Chief Strategy Officer of UCSF Health, an internationally recognized medical institution with more than 1,000 beds, nearly 2 million outpatient visits, annual revenue of over $5 billion, and ranked number one hospital in Northern California and seventh best in the country by U.S. News & World Report.  As the Chief Strategy Officer for UCSF Health since 2015, she is responsible for leading and executing all strategic planning and business development functions. She oversees network development as well as concierge and executive health, managed care, marketing and brand for the health system. Beginning in 2019, Decosta was appointed to serve as President of UCSF Health Affiliates and is responsible for executing contracts, managing relationships, and ensuring the successful operational alignment with UCSF Health strategic priorities.  Prior to this role, she was SVP of Mergers, Acquisitions and Partnerships at Trinity Health. Ms. Decosta also served in various strategic planning roles at Dignity Health including Chief Strategy Officer, Vice President of Business Development & Clinical Integration, and Director of Strategy for the system’s Nevada market and VP Mergers & Acquisitions for the system. Ms. Decosta’s experience also includes Southern California Permanente Medical Group Regional Service and Access.

 

Vin Fabiani, Partner at HLM Venture Partners

 

Vin Fabiani is a partner at HLM Venture Partners, a venture capital firm investing in emerging companies focused on healthcare information technology, digital health, tech-enabled healthcare services and medical devices. His focus is primarily on earlier-stage technology and services companies. He is currently on the Board of IMCS, a leading provider of Cognitive Behavioral Therapy (CBT) to the workers’ compensation market; Array Behavioral Health, a large provider of tele-psychiatric care to hospital systems and primary care clinics; Censinet, an emerging technology company focused on governance, security and compliance for health care provider systems; and ClearDATA, a leader in security and compliance for health care organizations as they transition their technology into the public cloud. He is also currently a Board Observer at Carevive, a technology company focused on improving the cancer patient experience, and meQuillibrium, a digital health company enabling Fortune 500 enterprises navigating through employee resiliency and workforce management. Previously, he was active in the success of Binary Fountain and ArroHealth.

 

He has been an active investor, mentor and advisor to several enterprises facilitating the development of emerging health care technology and services companies including Blueprint Health, StartUp Health and Healthbox. Some of the companies he has invested in and/or advised include: AidIn, Healthcare Recovery Solutions, CredSimple (now Andros), Luminate Health, Avail Systems (formerly NuRep), RubiconMD, SwipeSense and WellTrackOne among others.

 

Business Combination Criteria

 

In addition to finding a company operating broadly in the digital health space, we have identified the following general criteria and frameworks for evaluating potential business combination targets. While we intend to use these criteria as guidelines during our evaluation process, we may decide to enter into an initial business combination with a target business that does not fit into this criteria.

 

Use of Technology as a Competitive Advantage

We will seek to acquire a business that uses technology at its core to power its services for its customers. We believe the use of technology will enable better health outcomes, reduce costs, and yield superior long-term profitability and customer retention.

 

Healthcare Platform

The ideal target business has the ability to be a platform upon which other ancillary businesses can be built or acquired. In the complicated world of healthcare, businesses with large client bases constantly search for new solutions to additional client pain points, enabling rapid growth through acquisition and crossover sales. For end customers, this “one-stop-shop” strategy means simplifying the search for access to the best products and care.

 

Existing and Future Growth

We will focus our search on companies that have had significant revenue growth since inception and have significant revenue and earnings potential through a combination of organic growth and inorganic / synergistic acquisitions.

 

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Financial Characteristics

Our ideal target company has significant growth potential from a revenue and earnings perspective, but also features one or more of the following business/financial criteria: recurring revenue cycles, revenue predictability, long-term contracted revenue, profitable unit economics and high gross margins, favorable payment terms or cash conversion cycles.

 

Management Team

We intend to acquire a company that has an excellent management team who are ready to run a public company at scale. This team ideally has a mix of high-growth and public markets experience as well as experience in marketing, product and sales strategy, finance, recruiting top talent, and use of technology as a competitive wedge. We believe the ideal team also understands how to simplify the complicated healthcare matrix to create proprietary business opportunities for their company while pursuing a sustainable business strategy. This team must also be focused on long-term value creation when executing on their plan.

 

Benefit from Being a Public Company

We intend to acquire a company that will benefit from being a public company. We expect that such a company will be able to use the public markets to fuel their growth by using the currency of their stock to acquire other companies or recruit the very best talent. Being a public company may also significantly increase their visibility and credibility among potential clients, employees, and partners.

 

We believe that the network of contacts and relationships of our management team will provide us with an important source of acquisition opportunities. In addition, we anticipate that potential targets will be brought to our attention from various unaffiliated sources, including founders, business leaders, investors, and members of the venture capital community, investment banks and private equity managers. In evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with management and employees, as well as a review of financial, operational, legal and other information which will be made available to us.

 

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors, or completing the business combination through a joint venture or other form of shared ownership with our sponsor, officers or directors, or their affiliates. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, officers or directors, our board of directors, or a committee of independent directors, would take appropriate steps to mitigate any perceived conflict of interest including obtaining an opinion from an independent investment banking firm or a valuation or appraisal firm stating that such an initial business combination is fair to our company from a financial point of view.

 

Members of our management team may directly or indirectly own founder shares and/or private placement warrants following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

 

Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities, including our sponsor, or their affiliates, pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. No members of our management team have any obligation to present us with any opportunity for a potential business combination of which they become aware, unless presented to such member solely in his or her capacity as a director or officer of the company. Our management in their capacities as employees of the sponsor or in their other endeavors, may be required to present potential business combinations to other entities, before they present such opportunities to the company. In addition, we may pursue an Affiliated Joint Acquisition opportunity with an entity to which an officer or director has a fiduciary or contractual obligation. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by issuing to such entity a class of equity or equity-linked securities. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as 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 another legal obligation.

 

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In addition, our sponsor, officers and directors, or their affiliates, may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.

 

Our Business Combination Process

 

In evaluating prospective business combinations, we expect to conduct a thorough due diligence review process that will encompass, among other things, a review of historical and projected financial and operating data, meetings with management and their advisors (if applicable), on-site inspection of facilities and assets, discussion with customers and suppliers, legal reviews and other reviews as we deem appropriate. We will also utilize our expertise analyzing companies in the sustainable industrial technology and infrastructure sectors in evaluating operating projections, financial projections and determining the appropriate return expectations given the risk profile of the target business.

 

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm that our initial business combination is fair to our company from a financial point of view.

 

Our officers and directors will indirectly own founder shares and/or private placement warrants following this offering. Because of this ownership, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors were to be included by a target business as a condition to any agreement with respect to our initial business combination. For additional information regarding our executive officers’ and directors’ business affiliations and potential conflicts of interest, see “Management — Directors, Director Nominees and Executive Officers” and “Management — Conflicts of Interest.”

 

Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us (including as described in “Proposed Business — Sourcing of Potential Business Combination Targets”). These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us.

 

We do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors will materially affect our ability to complete our initial business combination. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless (i) such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company, (ii) such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue and (iii) the director or officer is permitted to refer the opportunity to us without violating another legal obligation.

 

Our sponsor, officers and directors may participate in the formation of, or become an officer or director of, any other blank check company prior to completion of our initial business combination. As a result, our sponsor, officers or directors could have conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check company with which they may become involved.

 

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Our Management Team

 

Members of our management team are not obligated to devote any specific number of hours to our matters, but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that any member of our management team will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the current stage of the business combination process.

 

We believe our management team’s operating and transaction experience and relationships with companies will provide us with a substantial number of potential business combination targets. Over the course of their careers, the members of our management team have developed a broad network of contacts and corporate relationships in various industries in connection with sustainable industrial technology and infrastructure investing. This network has grown through the activities of our management team sourcing, acquiring and financing businesses, our management team’s relationships with sellers, financing sources and target management teams and the experience of our management team in executing transactions under varying economic and financial market conditions. See the section of this prospectus entitled “Management” for a more complete description of our management team’s experience.

 

This network has provided our management team with a flow of referrals that have resulted in numerous transactions. We believe that the network of contacts and relationships of our management team will provide us with an important source of acquisition opportunities. In addition, we anticipate that target business candidates will also be brought to our attention from various unaffiliated sources, including investment bankers, private investment funds and other intermediaries. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read this prospectus and know the types of businesses we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions.

 

Status as a Public Company

 

We believe our structure will make us an attractive business combination partner to target businesses. As a public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination with us. Following an initial business combination, we believe the target business would have greater access to capital and additional means of creating management incentives that are better aligned with stockholders’ interests than it would have as a private company. A target business can further benefit by augmenting its profile among potential new customers and vendors and aid in attracting talented employees. In a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock in the target business for our shares of Class A common stock (or shares of a new holding company) or for a combination of our shares of Class A common stock and cash, allowing us to tailor the consideration to the specific needs of the sellers.

 

Although there are various costs and obligations associated with being a public company, we believe target businesses will find this a more expeditious and cost effective method to becoming a public company than the typical initial public offering. The typical initial public offering process takes a significantly longer period of time than most business combination transaction processes, and there are significant expenses in the initial public offering process, including underwriting discounts and commissions, marketing and road show efforts that may not be present to the same extent in connection with an initial business combination with us. Furthermore, once a proposed initial business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring or could have negative valuation consequences.

 

While we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder approval of any proposed initial business combination, negatively.

 

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We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

 

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.

 

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

 

Financial Position

 

With funds available for a business combination initially in the amount of $193,000,000 assuming no redemptions and after payment of $7,000,000 of deferred underwriting fees (or $221,950,000 assuming no redemptions and after payment of up to $8,050,000 of deferred underwriting fees if the underwriters’ option to purchase additional units is exercised in full), we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us.

 

Effecting Our Initial Business Combination

 

We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the private placement of the private placement warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to backstop agreements we may enter into following the consummation of this offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.

 

If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A common stock, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.

 

We may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust account. In addition, we intend to target businesses larger than we could acquire with the net proceeds of this offering and the sale of the private placement warrants, and may as a result be required to seek additional financing to complete such proposed initial business combination. Subject to compliance with applicable securities laws, we would expect to complete such financing only simultaneously with the completion of our initial business combination. In the case of an initial business combination funded with assets other than the trust account assets, our proxy materials or tender offer documents disclosing the initial business combination would disclose the terms of the financing and, only if required by law, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise.

 

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We have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. From the period commencing with our formation through the date of this prospectus, there have been no substantive communications or discussions between any of our officers, directors or our sponsor and any of their potential contacts or relationships regarding a potential initial business combination. Additionally, we have not engaged or retained any agent or other representative to identify or locate any suitable acquisition candidate, to conduct any research or take any measures, directly or indirectly, to locate or contact a target business. Accordingly, there is no current basis for investors in this offering to evaluate the possible merits or risks of the target business with which we may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely impact a target business.

 

The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.

 

Other Sources of Target Businesses

 

While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee, advisory fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor or any of our existing officers or directors, or any entity with which our sponsor or officers are affiliated, be paid any finder’s fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation by the company prior to, or in connection with any services rendered for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is). None of our sponsor, executive officers or directors, or any of their respective affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective business combination target in connection with a contemplated initial business combination. We have agreed to pay an affiliate of our sponsor a total of $10,000 per month for secretarial and administrative support and to reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. Some of our officers and directors may enter into employment or consulting agreements with the post-transaction company following our initial business combination. The presence or absence of any such fees or arrangements will not be used as a criterion in our selection process of an initial business combination candidate.

 

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, executive officers or directors, or making the acquisition through a joint venture or other form of shared ownership with our sponsor, executive officers or directors. We are not required to obtain such an opinion in any other context.

 

As more fully discussed in the section of this prospectus entitled “Management — Conflicts of Interest,” if any of our officers or directors becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.

 

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Stockholders May Not Have the Ability to Approve our Initial Business Combination

 

We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required by applicable law or stock exchange rule, or we may decide to seek stockholder approval for business or other reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction.

 

Type of Transaction   Whether
Stockholder
Approval is
Required
Purchase of assets   No
Purchase of stock of target not involving a merger with the company   No
Merger of target into a subsidiary of the company   No
Merger of the company with a target   Yes

 

Under Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:

 

we issue shares of Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock then outstanding;

 

any of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding common shares or voting power of 5% or more; or

 

the issuance or potential issuance of common stock will result in our undergoing a change of control.

 

The decision as to whether we will seek stockholder approval of a proposed business combination in those instances in which stockholder approval is not required by law will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a variety of factors, including, but not limited to:

 

the timing of the transaction, including in the event we determine stockholder approval would require additional time and there is either not enough time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;

 

the expected cost of holding a stockholder vote;

 

the risk that the stockholders would fail to approve the proposed business combination;

 

other time and budget constraints of the company; and

 

additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders.

 

Permitted Purchases of Our Securities

 

In the event we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. In the event our initial stockholders, directors, officers, advisors or any of their respective affiliates determine to make any such purchases at the time of a stockholder vote relating to our initial business combination, such purchases could have the effect of influencing the vote necessary to approve such transaction. None of the funds in the trust account will be used to purchase public shares in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. Prior to the consummation of this offering, we will adopt an insider trading policy which will require insiders to (1) refrain from purchasing securities when they are in possession of any material non-public information and (2) to clear all trades with our compliance personnel or legal counsel prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.

 

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In the event that our sponsor, directors, officers, advisors or any of their respective affiliates purchase public shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling stockholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.

 

The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of our initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our initial business combination that may not otherwise have been possible.

 

In addition, if such purchases are made, the public “floa