F-4/A 1 d199994df4a.htm AMENDMENT NO. 1 TO FORM F-4 Amendment No. 1 to Form F-4
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As filed with the Securities and Exchange Commission on October 18, 2021.

Registration No. 333-258915

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

Amendment No. 1 to

FORM F-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

ALPHA TAU MEDICAL LTD.

(Exact name of registrant as specified in its charter)

 

 

 

State of Israel

(State or other jurisdiction of

incorporation or organization)

 

3841

(Primary Standard Industrial

Classification Code Number)

Alpha Tau Medical Ltd.

Kiryat HaMada St. 5

Jerusalem, Israel 9777605

+972 (3) 577-4115

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

 

Alpha Tau Medical, Inc.

1 Union Street 3rd Floor

Lawrence, MA 01840

(833) 455-3278

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

 

 

Copies of all correspondence to:

 

Nathan Ajiashvili

Eyal Orgad

Michael J. Rosenberg

Latham & Watkins LLP

1271 Avenue of the Americas

New York, New York 10020

Tel: (212) 906-1200

 

Joshua G. Kiernan

Latham & Watkins LLP

99 Bishopsgate

London EC2M 3XF

United Kingdom

Tel: +44 (20) 7710-1000

 

Shachar Hadar

Yoav Nahir

Matthew R. Rudolph

Meitar | Law Offices

16 Abba Hillel Silver Rd.

Ramat Gan 5250608, Israel

Tel: +972 (3) 610-3100

 

Douglas S. Ellenoff

Wei Wang

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas

New York, NY 10105

Tel: (212) 370-1300

Fax: (212) 370-7889

 

Eran Yaniv

Ron Sitton

Sharon Rosen

FISCHER (FBC & Co)

146 Menachem Begin Street

Tel Aviv 6492103, Israel

Tel: +972(3) 694-4111

Fax: +972(3) 609-1116

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effective date of this registration statement and all other conditions to the proposed Business Combination described herein have been satisfied or waived.

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

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

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

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

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933. Emerging growth company  ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, 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
Securities to be Registered
  Amount to be
Registered(1)(7)
  Proposed
Maximum
Offering Price
per Security(2)
  Proposed
Maximum
Aggregate
Offering Price
  Amount of
Registration Fee(3)

Ordinary shares, no par value per share(4)

  33,343,750   $9.83   $327,769,062.50   $35,760

Warrants to purchase ordinary shares(5)

  19,530,000      

Ordinary shares underlying warrants(6)

  19,530,000   $12.22   $238,656,600.00   $26,038

Total

          $566,425,062.50   $61,798(8)

 

 

(1)

The number of ordinary shares, no par value per share (“Alpha Tau ordinary shares”), of Alpha Tau Medical Ltd. (“Alpha Tau”) and warrants (“Alpha Tau warrants”) to purchase Alpha Tau ordinary shares being registered is based upon an estimate of the sum of (a) the maximum number of shares of Class A common stock, par value $0.0001 per share (“Class A Stock”), of Healthcare Capital Corp. (“HCCC”) that will be outstanding immediately prior to the Business Combination (as defined herein) and exchanged for one Alpha Tau ordinary share for each such share of Class A Stock, assuming the Share Split (as defined herein) has occurred; (b) the maximum number of shares of Class B common stock, par value $0.0001 per share of HCCC (“Class B Stock” and, together with the Class A Stock, the “HCCC Common Stock”) that will be outstanding immediately prior to the Business Combination, after giving effect to the Forfeiture (as defined herein), and exchanged for one Alpha Tau ordinary share for each such share of Class B Stock, assuming the Share Split occurred; and (c) the maximum number of warrants of HCCC (“HCCC warrants”) that will be outstanding immediately prior to the Business Combination and exchanged for one Alpha Tau warrant for each such HCCC warrant, assuming the Share Split has occurred.

(2)

In accordance with Rule 457(f)(1) and Rule 457(c), as applicable, based on (i) in respect of Alpha Tau ordinary shares to be issued to HCCC stockholders, the average of the high ($9.85) and low ($9.81) prices of the shares of Class A Stock on the Nasdaq Capital Market (“Nasdaq”) on August 13, 2021, and (ii) in respect of Alpha Tau warrants to be issued to HCCC warrant holders, the sum of (a) the average of the high ($0.75) and low ($0.69) prices for the HCCC warrants on Nasdaq on August 13, 2021 and (b) $11.50, the exercise price of the HCCC warrants, resulting in a combined maximum offering price per warrant of $12.22. The maximum number of Alpha Tau warrants and Alpha Tau ordinary shares issuable upon exercise of the Alpha Tau warrants are being simultaneously registered hereunder. Consistent with the response to Question 240.06 of the Securities Act Rules Compliance and Disclosure Interpretations, the registration fee with respect to the Alpha Tau warrants has been allocated to the underlying Alpha Tau ordinary shares and those Alpha Tau ordinary shares are included in the registration fee.

(3)

Calculated by multiplying the proposed maximum aggregate offering price by 0.0001091.

(4)

Represents Alpha Tau ordinary shares issuable in exchange for outstanding HCCC Common Stock upon the merger of Archery Merger Sub Inc. (“Merger Sub”) with and into HCCC pursuant to the Business Combination.

(5)

Represents warrants of Alpha Tau, each whole warrant entitling the holder to purchase one Alpha Tau ordinary share, to be issued in exchange for HCCC warrants upon the merger of Merger Sub with and into HCCC pursuant to the Business Combination.

(6)

Represents Alpha Tau ordinary shares underlying warrants of Alpha Tau.

(7)

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

(8)

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 that 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.

 

 

 


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The information in this proxy statement/prospectus is not complete and may be changed. Alpha Tau Medical Ltd. may not sell these securities until the registration statement filed with the Securities and Exchange Commission, of which this proxy statement/prospectus is a part, is effective. This proxy statement/prospectus is neither an offer to sell these securities, nor a solicitation of an offer to buy these securities, in any state or jurisdiction where the offer or sale is not permitted. Any representation to the contrary is a criminal offense.

 

PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION DATED OCTOBER 18, 2021

PROXY STATEMENT/PROSPECTUS

 

LOGO    LOGO

PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS

OF

HEALTHCARE CAPITAL CORP.

 

 

PROSPECTUS FOR UP TO 33,343,750 ORDINARY SHARES,

19,530,000 WARRANTS,

AND 19,530,000 ORDINARY SHARES UNDERLYING WARRANTS

OF

ALPHA TAU MEDICAL LTD.

 

 

The board of directors of Healthcare Capital Corp., a Delaware corporation (“HCCC”), has approved the Agreement and Plan of Merger (the “Merger Agreement”), dated as of July 7, 2021, by and among HCCC, Alpha Tau Medical Ltd., a company organized under the laws of the State of Israel (the “Company” or “Alpha Tau”) and Archery Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”). Pursuant to the Merger Agreement, Merger Sub will merge with and into HCCC, with HCCC surviving the merger (the “Business Combination”). As a result of the Business Combination, and upon consummation of the Business Combination and the other transactions contemplated by the Merger Agreement (the “Transactions”), HCCC will become a wholly owned subsidiary of the Company, with the securityholders of HCCC becoming securityholders of the Company.

Prior to the effective time of the Business Combination (the “Effective Time”), (i) each preferred share of Alpha Tau will be automatically converted into such number of Alpha Tau ordinary shares as determined in accordance with the existing articles of association of Alpha Tau; (ii) each Alpha Tau ordinary share that is issued and outstanding immediately prior to the Effective Time will be split into 0.905292 Alpha Tau ordinary shares (rounded to the nearest whole number on a shareholder-by-shareholder basis) and set as of the date of the execution of the Merger Agreement based upon the agreed pre-money equity value of the Company of $600 million (the “Share Split”); and (iii) outstanding securities convertible into Alpha Tau ordinary shares shall be adjusted to give effect to the foregoing transactions and remain outstanding. The closing for HCCC’s Class A Common Stock on Nasdaq was $9.64 per share on July 7, 2021, immediately prior to the execution of the Merger Agreement. The price per share of HCCC’s Class A Common Stock on Nasdaq was $9.91 per share on October 11, 2021.

Pursuant to the Merger Agreement and assuming the Share Split has been effected, at the Effective Time, (a) each share of Class A Common Stock of HCCC, par value $0.0001 per share (“Class A Stock”), outstanding immediately prior to the Effective Time will be exchanged for one Alpha Tau ordinary share, (b) each share of Class B Common Stock of HCCC, par value $0.0001 per share (“Class B Stock” and, together with the Class A Stock, the “HCCC Common Stock”), outstanding immediately prior to the Effective Time, after giving effect to the forfeiture of 1,031,250 shares of Class B Stock pursuant to that certain support agreement dated July 7, 2021, by and among HCCC, Alpha Tau and certain holders of Class B Stock (the “Sponsor Support Agreement”), will be exchanged for one Alpha Tau ordinary share; and (c) each warrant of HCCC entitling the holder to purchase one share of Class A Stock per warrant at a price of $11.50 per share (each, a “HCCC warrant”) outstanding immediately prior to the Effective Time, after giving effect to the forfeiture of 1,020,000 HCCC warrants pursuant to the Sponsor Support Agreement, will be assumed by Alpha Tau and will become one warrant of Alpha Tau (“Alpha Tau warrant”), with the 19,530,000 Alpha Tau ordinary shares initially underlying the Alpha Tau warrants and the exercise price of such Alpha Tau warrants subject to adjustment in accordance with the Merger Agreement in the event of a share split, share dividend or distribution, or any change in Alpha Tau’s share capital by reason of any split-up, reverse share split, recapitalization, combination, reclassification, exchange of shares.

Concurrently with the execution of the Merger Agreement, Alpha Tau and certain accredited investors (the “PIPE Investors”) entered into a series of subscription agreements (“Subscription Agreements”), providing for the purchase by the PIPE Investors at the Effective Time of an aggregate of 9,263,006 Alpha Tau ordinary shares (“PIPE Shares”) at a price per share of $10.00 (assuming the Share Split has been effected), for gross proceeds to Alpha Tau of $92,630,060 (collectively, the “PIPE Investment”). The closing of the PIPE Investment is conditioned upon the consummation of the Transactions.

It is anticipated that, upon completion of the Business Combination, HCCC’s existing public stockholders will own approximately 28.2%, Healthcare Capital Sponsor LLC will own approximately 4.6% (and an additional 1.4% of Conditional Equity that is subject to market vesting conditions described elsewhere in this proxy statement/prospectus), PIPE Investors will own approximately 9.5% and Alpha Tau’s existing securityholders will own approximately 56.3% of the Company’s outstanding ordinary shares. These percentages are calculated based on a number of assumptions and are subject to adjustment in accordance with the terms of the Merger Agreement. These relative percentages assume that none of HCCC’s existing stockholders exercise their redemption rights in connection with the Business Combination. If any of HCCC’s stockholders exercise their redemption rights, or any of the other assumptions underlying these percentages become inaccurate, these percentages may vary from the amounts shown above. Please see “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

This proxy statement/prospectus covers the Alpha Tau ordinary shares and Alpha Tau warrants issuable to the securityholders of HCCC as described above. Accordingly, we are registering up to an aggregate of 33,343,750 Alpha Tau ordinary shares, 19,530,000 Alpha Tau warrants, and 19,530,000 Alpha Tau ordinary shares issuable upon the exercise of the Alpha Tau warrants. We are not registering the Alpha Tau ordinary shares issuable to the Alpha Tau Securityholders or the PIPE Investors.

Proposals to approve the Merger Agreement and the other matters discussed in this proxy statement/prospectus will be presented at the special meeting of HCCC stockholders scheduled to be held on                 , 2021 in virtual format.

Although Alpha Tau is not currently a public reporting company, following the effectiveness of the registration statement of which this proxy statement/prospectus is a part and the closing of the Business Combination, Alpha Tau will become subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Alpha Tau intends to apply for listing of the Alpha Tau ordinary shares and Alpha Tau warrants on Nasdaq under the proposed symbols “DRTS” and “DRTSW”, respectively, to be effective at the consummation of the Business Combination. It is a condition of the consummation of the Transactions that the Alpha Tau ordinary shares and Alpha Tau warrants are approved for listing on Nasdaq (subject only to official notice of issuance thereof and round lot holder requirements). While trading on Nasdaq is expected to begin on the first business day following the date of completion of the Business Combination, there can be no assurance that Alpha Tau’s securities will be listed on Nasdaq or that a viable and active trading market will develop. If such listing condition is not met or if such confirmation is not obtained, the Business Combination will not be consummated unless the Nasdaq condition set forth in the Merger Agreement is waived by the applicable parties. See “Risk Factors ” beginning on page 20 for more information.

Alpha Tau will be an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, and is therefore eligible to take advantage of certain reduced reporting requirements otherwise applicable to other public companies.

Alpha Tau will also be a “foreign private issuer” as defined in the Exchange Act and will be exempt from certain rules under the Exchange Act that impose certain disclosure obligations and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, Alpha Tau’s officers, directors and principal shareholders will be exempt from the reporting and “short-swing” profit recovery provisions under Section 16 of the Exchange Act. Moreover, Alpha Tau will not be required to file periodic reports and financial statements with the U.S. Securities and Exchange Commission as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

The accompanying proxy statement/prospectus provides HCCC stockholders with detailed information about the Business Combination and other matters to be considered at the special meeting of HCCC stockholders, including HCCC stockholders’ right to redeem their shares for a pro rata portion of the cash held in HCCC’s Trust Account in connection with the Business Combination. See “Questions and Answers About the Business Combination and the Special Meeting” for additional detail regarding the redemption process. We encourage you to read the entire accompanying proxy statement/prospectus, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 20 of the accompanying proxy statement/prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in connection with the Business Combination, or determined if this proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated                , 2021, and is first being mailed to HCCC stockholders on or about                 , 2021.


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Notice of Special Meeting of Stockholders

of Healthcare Capital Corp.

To Be Held on                , 2021

TO THE STOCKHOLDERS OF HEALTHCARE CAPITAL CORP.:

NOTICE IS HEREBY GIVEN that a special meeting of stockholders of Healthcare Capital Corp., a Delaware corporation (“HCCC”), will be held at                  a.m. Eastern Time, on                 , 2021 (the “special meeting”). Due to health concerns stemming from the COVID-19 pandemic, and to support the health and well-being of our stockholders, the special meeting will be a virtual meeting. You are cordially invited to attend and participate in the special meeting online by visiting https://                . The special meeting will be held for the following purposes:

 

1.

Proposal No. 1 — The Business Combination Proposal — to consider and vote upon a proposal to approve and adopt the Merger Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A, and the transactions contemplated therein, including the Business Combination whereby Archery Merger Sub Inc., a Delaware corporation (“Merger Sub”), will merge with and into HCCC, with HCCC surviving the merger as a wholly owned subsidiary of Alpha Tau Medical Ltd., a company organized under the laws of Israel (“Alpha Tau”) (the “Business Combination Proposal”);

 

2.

Proposal No. 2 — The Charter Proposals — to approve the following material differences between HCCC’s amended and restated certificate of incorporation (the “HCCC Charter”) and Alpha Tau’s amended and restated articles of association (the “Alpha Tau Articles”) to be effective upon the consummation of the Business Combination:

i. the name of the new public entity will be “Alpha Tau Medical Ltd.” as opposed to “Healthcare Capital Corp.”;

ii. the Alpha Tau Articles will provide for one class of ordinary shares as opposed to the two classes of common stock provided for in the HCCC Charter;

iii. Alpha Tau’s corporate existence is perpetual as opposed to HCCC’s corporate existence terminating if a business combination is not consummated within a specified period of time; and

iv. the Alpha Tau Articles will not include the various provisions applicable only to special purpose acquisition corporations that the HCCC Charter contains (collectively, the “Charter Proposals”);

 

3.

Proposal No. 3 — The Adjournment Proposal — to consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, if the parties are not able to consummate the Business Combination (the “Adjournment Proposal”).

We also will transact any other business as may properly come before the special meeting or any adjournment or postponement thereof.

The items of business listed above are more fully described elsewhere in the proxy statement/prospectus. Whether or not you intend to attend the special meeting, we urge you to read the attached proxy statement/prospectus in its entirety, including the annexes and accompanying financial statements, before voting. IN PARTICULAR, WE URGE YOU TO CAREFULLY READ THE SECTION IN THE PROXY STATEMENT/PROSPECTUS ENTITLED “RISK FACTORS.”

Only holders of record of shares of Class A Common Stock of HCCC, par value $0.0001 per share (“Class A Stock”), or shares of Class B Common Stock of HCCC, par value $0.0001 per share (“Class B Stock” and, together with the Class A Stock, the, “HCCC Common Stock”), at the close of business on                 , 2021 (the “record date”) are entitled to notice of the special meeting and to vote and have their votes counted at the special meeting and any adjournments or postponements of the special meeting.

After careful consideration, HCCC’s board of directors has determined that each of the proposals listed is fair to and in the best interests of HCCC and its stockholders and recommends that you vote or give instruction to


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vote “FOR” each of the proposals set forth above. When you consider the recommendations of HCCC’s board of directors, you should keep in mind that HCCC’s directors and officers may have interests in the Business Combination that conflict with, or are different from, your interests as a stockholder of HCCC. See the section entitled “Proposal One — The Business Combination Proposal — Interests of Certain Persons in the Business Combination.”

The closing of the Business Combination is conditioned on approval of the Business Combination Proposal and the Charter Proposals. If either of these proposals is not approved and the applicable closing condition in the Merger Agreement is not waived, the remaining proposals will not be presented to stockholders for a vote. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

All HCCC stockholders are cordially invited to attend the special meeting, which will be held virtually over the Internet at https://                . To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If you are a holder of record of HCCC Common Stock on the record date, you may also cast your vote at the special meeting. If your HCCC Common Stock is held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting, obtain a proxy from your broker or bank.

A complete list of HCCC stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at the principal executive offices of HCCC for inspection by stockholders during business hours for any purpose germane to the special meeting.

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

If you have any questions or need assistance voting your HCCC Common Stock, please contact                 . Questions can also be sent by email to                . This notice of special meeting is and the proxy statement/prospectus relating to the Business Combination will be available at https://                .

Thank you for your participation. We look forward to your continued support.

By Order of the Board of Directors

William Johns

Chief Executive Officer

            , 2021

IF YOU RETURN YOUR SIGNED PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS.

ALL HOLDERS (THE “PUBLIC STOCKHOLDERS”) OF SHARES OF CLASS A STOCK ISSUED IN HCCC’S INITIAL PUBLIC OFFERING (THE “PUBLIC SHARES”) HAVE THE RIGHT TO HAVE THEIR PUBLIC SHARES REDEEMED FOR CASH IN CONNECTION WITH THE PROPOSED BUSINESS COMBINATION. PUBLIC STOCKHOLDERS ARE NOT REQUIRED TO AFFIRMATIVELY VOTE FOR OR AGAINST THE BUSINESS COMBINATION PROPOSAL, TO VOTE ON THE BUSINESS COMBINATION PROPOSAL AT ALL, OR TO BE HOLDERS OF RECORD ON THE RECORD DATE IN ORDER TO HAVE THEIR SHARES REDEEMED FOR CASH.

THIS MEANS THAT ANY PUBLIC STOCKHOLDER HOLDING PUBLIC SHARES MAY EXERCISE REDEMPTION RIGHTS REGARDLESS OF WHETHER THEY ARE EVEN ENTITLED TO VOTE ON THE BUSINESS COMBINATION PROPOSAL.


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TO EXERCISE REDEMPTION RIGHTS, HOLDERS MUST TENDER THEIR STOCK TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY, HCCC’S TRANSFER AGENT, NO LATER THAN TWO (2) BUSINESS DAYS PRIOR TO THE SPECIAL MEETING. YOU MAY TENDER YOUR STOCK BY EITHER DELIVERING YOUR STOCK CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DEPOSIT WITHDRAWAL AT CUSTODIAN SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE “SPECIAL MEETING OF HCCC STOCKHOLDERS — REDEMPTION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.


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TABLE OF CONTENTS

 

ABOUT THIS PROXY STATEMENT/PROSPECTUS

     ii  

INDUSTRY AND MARKET DATA

     iii  

TRADEMARKS, TRADE NAMES AND SERVICE MARKS

     iv  

SELECTED DEFINITIONS

     v  

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE SPECIAL MEETING

     vi  

SUMMARY

     1  

RISK FACTORS

     21  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS; MARKET, RANKING AND OTHER INDUSTRY DATA

     102  

SPECIAL MEETING OF HCCC STOCKHOLDERS

     105  

PROPOSAL ONE—THE BUSINESS COMBINATION PROPOSAL

     112  

PROPOSAL TWO—THE CHARTER PROPOSALS

     126  

PROPOSAL THREE—THE ADJOURNMENT PROPOSAL

     127  

THE MERGER AGREEMENT

     128  

AGREEMENTS ENTERED INTO IN CONNECTION WITH THE MERGER AGREEMENT

     138  

INFORMATION ABOUT THE COMPANIES

     140  

HCCC’S BUSINESS

     143  

ALPHA TAU’S BUSINESS

     149  

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

     202  

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

     207  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     223  

MANAGEMENT FOLLOWING THE BUSINESS COMBINATION

     236  

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     262  

CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

     266  

CERTAIN MATERIAL ISRAELI TAX CONSIDERATIONS

     283  

DESCRIPTION OF ALPHA TAU ORDINARY SHARES

     290  

DESCRIPTION OF ALPHA TAU WARRANTS

     298  

COMPARISON OF RIGHTS OF ALPHA TAU SHAREHOLDERS AND HCCC STOCKHOLDERS

     302  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF HCCC, ALPHA TAU AND THE COMBINED COMPANY

     311  

FUTURE SHAREHOLDER PROPOSALS AND NOMINATIONS

     316  

APPRAISAL RIGHTS

     317  

STOCKHOLDER COMMUNICATIONS

     318  

LEGAL MATTERS

     319  

EXPERTS

     320  

DELIVERY OF DOCUMENTS TO SHAREHOLDERS

     321  

ENFORCEABILITY OF CIVIL LIABILITIES

     322  

TRANSFER AGENT AND REGISTRAR

     324  

WHERE YOU CAN FIND MORE INFORMATION

     325  

INDEX TO FINANCIAL STATEMENTS

     F-1  

ANNEX A - MERGER AGREEMENT

     A-1  

ANNEX B - FORM OF AMENDED & RESTATED ARTICLES OF ASSOCIATION

     B-1  

ANNEX C - PROXY CARD

     C-1  


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ABOUT THIS PROXY STATEMENT/PROSPECTUS

This proxy statement/prospectus, which forms a part of a registration statement on Form F-4 filed with the Securities and Exchange Commission, or SEC, by Alpha Tau, constitutes a prospectus of Alpha Tau under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the Alpha Tau ordinary shares to be issued to HCCC stockholders in connection with the Business Combination, as well as the warrants to acquire Alpha Tau ordinary shares to be issued to HCCC warrant holders and the Alpha Tau ordinary shares underlying such warrants. This document also constitutes a proxy statement of HCCC under Section 14(a) of the Exchange Act, and the rules thereunder, and a notice of meeting with respect to the special meeting of HCCC stockholders to consider and vote upon the proposals to adopt the Merger Agreement, to adopt the Charter Proposals (as defined herein) and to adjourn the meeting, if necessary, to permit further solicitation of proxies because there are not sufficient votes to adopt the Merger Agreement.

Unless otherwise indicated or the context otherwise requires, all references in this proxy statement/prospectus to the terms “Alpha Tau” and the “Company” refer to Alpha Tau Medical Ltd., together with its subsidiaries. All references in this proxy statement/prospectus to “HCCC” refer to Healthcare Capital Corp.

 

ii


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INDUSTRY AND MARKET DATA

Unless otherwise indicated, information contained in this proxy statement/prospectus concerning Alpha Tau’s industry and the regions in which it operates, including Alpha Tau’s general expectations and market position, market opportunity, market share and other management estimates, is based on information obtained from various independent publicly available sources and other industry publications, surveys and forecasts. Alpha Tau has not independently verified the accuracy or completeness of any third-party information. Similarly, internal surveys, industry forecasts and market research, which Alpha Tau believes to be reliable based upon its management’s knowledge of the industry, have not been independently verified. Alpha Tau assumes liability for the accuracy and completeness of such information to the extent included in this proxy statement/prospectus, but it has not independently verified the market and industry data contained in this proxy statement/prospectus or the underlying assumptions relied on therein. As a result, you should be aware that any such market, industry and other similar data may not be reliable. In addition, assumptions and estimates of Alpha Tau’s future performance and growth objectives and the future performance of its industry and the markets in which it operates are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those discussed under the headings “Risk Factors,” “Cautionary Statement Regarding Forward-Looking Statements; Market, Ranking and Other Industry Data” and “Alpha Tau’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this proxy statement/prospectus.

 

iii


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TRADEMARKS, TRADE NAMES AND SERVICE MARKS

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

 

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SELECTED DEFINITIONS

 

“Aggregate Transaction Proceeds”

means an amount equal to the aggregate cash proceeds available for release to HCCC from HCCC’s trust account in connection with the transactions contemplated by the Merger Agreement (after, for the avoidance of doubt, giving effect to all of the SPAC Redemptions (as defined herein) and the payment of the deferred underwriting fees of HCCC in connection with the consummation of the Transactions) plus the aggregate purchase price under all subscription agreements entered into in respect of the PIPE Investment.

 

“Alpha Tau preferred shares”

means, collectively, the Series A Convertible Preferred Shares of Alpha Tau, no par value (“Series A Preferred Shares”) and Series B Convertible Preferred Shares of Alpha Tau, no par value (“Series B Preferred Shares”).

 

“Alpha Tau warrants”

means the warrants to be received by warrant holders of HCCC in exchange for HCCC warrants pursuant to the Merger Agreement.

 

“Ancillary Documents”

means the Sponsor Support Agreement (as defined herein), the Subscription Agreements (as defined herein), the Alpha Tau Support Agreement (as defined herein), the Amended IRA (as defined herein) and each other agreement, document, instrument and/or certificate contemplated by the Merger Agreement executed or to be executed in connection with the transactions contemplated thereby.

 

“Closing”

means the consummation of the Business Combination.

 

“Closing Date”

means the date on which the Closing occurs.

 

“DGCL”

means the Delaware General Corporation Law, as amended.

 

“Exchange Act”

means the Securities Exchange Act of 1934, as amended.

 

“Founder Shares”

means the 6,875,000 shares of Class B common stock, par value $0.0001 per share, of HCCC held by the Sponsor, which were acquired for an aggregate purchase price of $25,000 prior to the HCCC IPO.

 

“GAAP”

means accounting principles generally accepted in the United States of America.

 

“HCCC IPO”

means the initial public offering of HCCC, which was consummated on January 20, 2021.

 

“PCAOB”

means the Public Company Accounting Oversight Board.

 

“private placement warrants”

means the 6,800,000 warrants HCCC sold to the Sponsor via private placement in connection with the HCCC IPO.

 

“Securities Act”

means the Securities Act of 1933, as amended.

 

“Sponsor”

means Healthcare Capital Sponsor LLC, a Delaware limited liability company.

 

“Transactions”

means the transactions contemplated by the Merger Agreement and the Ancillary Documents.

 

“units”

means the 27,500,000 units sold as part of the HCCC IPO including the 3,500,000 units sold to the underwriter following the partial exercise of its over-allotment option, each consisting of one share of Class A Stock and one-half of one redeemable HCCC warrant.

 

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE SPECIAL MEETING

The questions and answers below highlight only selected information set forth elsewhere in this proxy statement/prospectus and only briefly address some commonly asked questions about the special meeting and the proposals to be presented at the special meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that may be important to HCCC stockholders. HCCC stockholders are urged to carefully read this entire proxy statement/prospectus, including the annexes and the other documents referred to herein, to fully understand the proposed Business Combination and the voting procedures for the special meeting.

Q: Why am I receiving this proxy statement/prospectus?

A: HCCC and Alpha Tau have agreed to a business combination under the terms of the Merger Agreement that is described in this proxy statement/prospectus. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A, and HCCC encourages its stockholders to read it in its entirety. HCCC’s stockholders are being asked to consider and vote upon a proposal to approve the Merger Agreement, which, among other things, provides for Merger Sub to be merged with and into HCCC with HCCC being the surviving corporation in the Business Combination and becoming a wholly owned subsidiary of Alpha Tau, and the other Transactions contemplated by the Merger Agreement. See the section entitled “Proposal One — The Business Combination Proposal.”

Q: Are there any other matters being presented to stockholders at the meeting?

A: In addition to voting on the Business Combination Proposal, the stockholders of HCCC will vote on the following proposals:

 

   

To approve the following material differences between the HCCC Charter and the Alpha Tau Articles to be effective upon the consummation of the Business Combination: (i) the name of the new public entity will be “Alpha Tau Medical Ltd.” as opposed to “Healthcare Capital Corp.”; (ii) the Alpha Tau Articles will provide for one class of ordinary shares as opposed to the two classes of HCCC Common Stock provided for in the HCCC Charter; (iii) Alpha Tau’s corporate existence is perpetual as opposed to HCCC’s corporate existence terminating if a business combination is not consummated within a specified period of time; and (iv) the Alpha Tau Articles will not include the various provisions applicable only to special purpose acquisition corporations that the HCCC Charter contains. See the section of this proxy statement/prospectus titled “Proposal Two — The Charter Proposals.”

 

   

To consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, if the parties are not able to consummate the Business Combination for any reason. See the section of this proxy statement/prospectus titled “Proposal Three — The Adjournment Proposal.”

HCCC will hold the special meeting of its stockholders to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the proposed Business Combination and the other matters to be acted upon at the special meeting. HCCC stockholders should read it carefully.

The vote of stockholders is important. Regardless of how many shares you own, you are encouraged to vote as soon as possible after carefully reviewing this proxy statement/prospectus.

Q: Why is HCCC providing stockholders with the opportunity to vote on the Business Combination?

A: Pursuant to the HCCC Charter, HCCC is required to provide stockholders with an opportunity to have their shares of HCCC Common Stock redeemed for cash, either through a stockholder meeting or tender offer. Due to the structure of the Transactions, HCCC is providing this opportunity through a stockholder vote.

 

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Q: Why am I receiving this proxy statement/prospectus if I only own HCCC warrants?

A: The HCCC warrants will become exercisable following the Business Combination and will entitle holders to purchase Alpha Tau ordinary shares, as described in more detail herein. This proxy statement/prospectus includes important information about Alpha Tau, the Alpha Tau Articles to be in effect following the closing of the Business Combination and the business of Alpha Tau and its subsidiaries following the closing of the Business Combination. Because holders of HCCC warrants will be entitled to purchase Alpha Tau ordinary shares after the closing of the Business Combination, we urge you to read the information contained in this proxy statement/prospectus carefully.

Q: What will happen to HCCC’s securities upon consummation of the Business Combination?

A: HCCC’s units, Class A Stock and the HCCC warrants are currently listed on Nasdaq under the symbols HCCCU, HCCC and HCCCW, respectively. HCCC’s securities will cease trading upon consummation of the Business Combination. If you own HCCC units, immediately prior to the consummation of the Business Combination, your HCCC units will split into the underlying shares of Class A Stock and warrants, and you will receive Alpha Tau ordinary shares in exchange for your Class A Stock and Alpha Tau warrants in exchange for your HCCC warrants as described herein. Alpha Tau intends to apply for listing of the Alpha Tau ordinary shares and Alpha Tau warrants on Nasdaq under the proposed symbols “DRTS” and “DRTSW,” respectively, to be effective upon the consummation of the Business Combination. It is a condition of the consummation of the Transactions that the Alpha Tau ordinary shares and Alpha Tau warrants are approved for listing on Nasdaq (subject only to official notice of issuance thereof and round lot holder requirements). While trading on Nasdaq is expected to begin on the first business day following the consummation of the Business Combination, there can be no assurance that Alpha Tau’s securities will be listed on Nasdaq or that a viable and active trading market will develop. If such listing condition is not met or if such confirmation is not obtained, the Business Combination will not be consummated unless the Nasdaq condition set forth in the Merger Agreement is waived by the applicable parties. See “Risk Factors — Risks Related to the Combined Company Following the Business Combination” for more information.

Q: Why is HCCC proposing the Business Combination?

A: HCCC was organized to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities.

On January 20, 2021, HCCC consummated the HCCC IPO of units, with each unit consisting of one share of its Class A Stock and one-half of one HCCC warrant, raising total gross proceeds of approximately $268,200,000, including $35,000,000 pursuant to the underwriters’ overallotment option. Simultaneously with the closing of the HCCC IPO, HCCC consummated the sale of 6,800,000 private placement warrants at a price of $1.00 per warrant in a private placement to Sponsor, generating gross proceeds of $6,800,000. The aggregate proceeds held in the trust account (the “Trust Account”) resulting from the HCCC IPO and the private placement warrants was $275,000,000. Since the HCCC IPO, HCCC’s activity has been limited to the evaluation of business combination candidates.

HCCC believes Alpha Tau is a company with an appealing market opportunity and growth profile, a strong position in its industry and a compelling valuation. As a result, HCCC believes that the Business Combination will provide HCCC stockholders with an opportunity to participate in the ownership of a company with significant growth potential. See the section entitled “Proposal One — The Business Combination Proposal — HCCC’s Board of Directors’ Reasons for the Business Combination and Recommendation of the Board of Directors.”

Q: What is the “PIPE” transaction?

A: Concurrently with and following the execution of the Merger Agreement, Alpha Tau entered into subscription agreements with certain parties subscribing for Alpha Tau ordinary shares pursuant to which such investors have agreed to purchase, and Alpha Tau has agreed to sell to them, an aggregate of 9,263,006 Alpha Tau ordinary shares, for a purchase price of $10.00 per share and at an aggregate purchase price of $92,630,060. The $10.00 per share purchase price is a                 % discount to the trading price of HCCC’s Class A Stock on the record date.

 

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Q: Did HCCC’s board of directors obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

A: No. HCCC’s board of directors did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. We note that the prospectus for the HCCC IPO provides that if HCCC seeks to complete a business combination with an entity affiliated with the Sponsor or HCCC’s officers or directors, HCCC would be required to obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that such an initial business combination is fair from a financial point of view. While a family member of Dr. Milch is a minority shareholder of Alpha Tau, such family member holds less than 1% of Alpha Tau’s outstanding securities, and therefore Alpha Tau is not an entity affiliated with the Sponsor or HCCC’s officers or directors. In light of the foregoing and the fact that a majority of HCCC’s board of directors did not have an interest in the proposed transaction, HCCC’s board of directors determined that hiring an independent valuation firm or appointing a committee of independent directors was not necessary to evaluate the proposed transaction. Further, out of an abundance of caution, Dr. Milch did not participate in votes related to the Business Combination and did not engage in significant contact with representatives of Alpha Tau on his own and instead contacted Alpha Tau management only with other members of HCCC management team present.

Additionally, in analyzing the Business Combination, HCCC’s board of directors conducted significant due diligence on Alpha Tau and again concluded that its members’ collective experience and backgrounds, together with the experience and sector expertise of HCCC’s advisors, enabled it to make the necessary analyses and determinations regarding the Business Combination, including that the Business Combination was fair from a financial perspective to its stockholders and that Alpha Tau’s fair market value was at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the agreement to enter into the Business Combination.

Q: Do I have redemption rights?

A: If you are a holder of public shares, you have the right to demand that HCCC redeem such shares for a pro rata portion of the cash held in HCCC’s Trust Account, calculated as of two business days prior to the consummation of the Business Combination. We sometimes refer to these rights to demand redemption of the public shares as “redemption rights.”

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of his or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to 15% or more of the public shares. Accordingly, all public shares in excess of 15% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be converted.

Under the HCCC Charter, the Business Combination may not be consummated if HCCC has net tangible assets of less than $5,000,001 either immediately prior to or upon consummation of the Business Combination after taking into account the redemption for cash of all public shares properly demanded to be redeemed by holders of public shares.

 

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Q: How do I exercise my redemption rights?

A: A holder of public shares may exercise redemption rights regardless of whether it votes for or against the Business Combination Proposal or does not vote on such proposal at all, or if it is a holder of public shares on the record date. If you are a holder of public shares and wish to exercise your redemption rights, you must demand that HCCC convert your public shares into cash and deliver your public shares to HCCC’s transfer agent electronically using The Depository Trust Company’s Deposit/Withdrawal at Custodian (“DWAC”) System no later than two (2) business days prior to the special meeting. Any holder of public shares seeking redemption will be entitled to their pro rata portion of the amount then in the Trust Account (which, for illustrative purposes, was $                 , or $                 per share, as of the record date), less any owed but unpaid taxes on the funds in the Trust Account. Such amount will be paid promptly upon consummation of the Business Combination. There are currently no owed but unpaid income taxes on the funds in the Trust Account.

Any request for redemption, once made by a holder of public shares, may be withdrawn at any time prior to the time the vote is taken with respect to the Business Combination Proposal at the special meeting. If you deliver your shares for redemption to HCCC’s transfer agent and later decide prior to the special meeting not to elect redemption, you may request that HCCC’s transfer agent return the shares (physically or electronically). You may make such request by contacting HCCC’s transfer agent at the address listed at the end of this section.

Any written demand of redemption rights must be received by HCCC’s transfer agent at least two (2) business days prior to the vote taken on the Business Combination Proposal at the special meeting. No demand for redemption will be honored unless the holder’s stock has been delivered (either physically or electronically) to the transfer agent.

If you are a holder of public shares (including through the ownership of HCCC units) and you exercise your redemption rights, it will not result in the loss of any HCCC warrants that you may hold (including those contained in any units you hold). Your whole warrants will become exercisable to purchase one Alpha Tau ordinary share following consummation of the Business Combination.

Value of the Public Warrants:

 

     Assuming no
redemption
     Assuming
50%
redemption
     Assuming
Maximum
redemption
 

Number of public warrants

     13,750,000        13,750,000        13,750,000  

Closing price per public warrant as of October 11, 2021

   $ 0.69      $ 0.69      $ 0.69  

Aggregate trading value of public Warrants as of October 11, 2021

   $ 9,487,500      $ 9,487,500      $ 9,487,500  
Assuming maximum redemptions and based on the market value per warrant as of the closing price on October 11, 2021 for HCCC’s public warrants, redeeming shareholders may retain public warrants with an aggregate value of approximately $9.5 million (after redeeming their shares). Additionally, as a result of redemptions, the trading market for the Alpha Tau ordinary shares may be less liquid than the market for the HCCC Class A Stock was prior to consummation of the Business Combination, and Alpha Tau may not be able to meet the listing standards for the Nasdaq or another national securities exchange.

 

Q: Do I have appraisal rights if I object to the proposed Business Combination?

A: Under Section 262 of the DGCL, the holders of HCCC Common Stock and HCCC warrants will not have appraisal rights in connection with the Business Combination.

 

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Q: What equity stake will the current Alpha Tau shareholders and HCCC stockholders hold in the public company immediately after the consummation of the Business Combination?

A: It is anticipated that, upon completion of the Business Combination, the ownership interests in Alpha Tau as the public company will be as set forth in the table below:

 

    

No Redemption Scenario

  

50% Redemption
Scenario(1)

  

Max Redemption
Scenario(2)

    

Shares

  

%

  

Shares

  

%

  

Shares

  

%

HCCC Public Stockholders

   27,500,000    28.2%    20,803,647    22.9%    14,107,294    17.1%

Alpha Tau Shareholders(3)

   54,718,235    56.3%    54,799,711    60.4%    54,718,235    66.6%

Sponsor(4)

  

5,843,750

   6.0%    5,843,750    6.4%    4,125,000    5.0%

PIPE Shareholders

   9,263,006    9.5%    9,263,006    10.2%    9,263,006    11.3%
  

 

  

 

  

 

  

 

  

 

  

 

Closing Shares

   97,406,467    100.0%    90,710,114    100.0%    82,295,011    100.0%

 

(1)

Assumes that holders of 6,696,353 public shares, or 50% of the maximum redemption, exercise their redemption rights in connection with the Business Combination.

(2)

Assumes that holders of 13,392,706 public shares exercise their redemption rights in connection with the Business Combination.

(3)

Includes the Alpha Tau ordinary shares. Excludes the potential dilutive effect of Alpha Tau options, warrants and restricted share units.

(4)

Assumes forfeiture of 1,031,250 Founder Shares and 1,020,000 private placement warrants (the “Forfeited Equity”). Based on the Aggregate Transaction Proceeds, an additional 1,718,750 Founder Shares and 1,700,000 Private Placement Warrants are subject to forfeiture (the “Redemption Equity”). In the event Aggregate Transaction Proceeds exceed $225.0 million but less than $250.0 million, the Sponsor shall forfeit a percentage of the Redemption Equity that is equal to 100% minus the quotient of (x) the amount by which the Aggregate Transaction Proceeds exceed $225.0 million (not to exceed $25.0 million), divided by (y) $25.0 million. In the event the Aggregate Transaction Proceeds exceed $250.0 million, no Redemption Equity will be forfeited. The table above assumes that the relevant shares and private placement warrants of Redemption Equity are forfeited in the “Max Redemption Scenario.” Further, an additional 1,375,000 Founder Shares and 1,360,000 Private Placement Warrants (the “Conditional Equity”) are subject to vesting over a three-year period following the Closing Date (the “Earnout Period”). The table above assumes that no Conditional Equity is forfeited by the Sponsor.

The share numbers set forth above do not take into account (a) HCCC’s public warrants and private placement warrants that will remain outstanding immediately following the Business Combination and may be exercised thereafter (commencing the later of 30 days after the Closing of the Business Combination and 12 months from the closing of the Initial Public Offering, which occurred on January 20, 2021), or (b) the issuance of any shares upon completion of the Business Combination under Alpha Tau 2021 Share Incentive Plan. If the actual facts are different than the assumptions set forth above, the share numbers set forth above will be different.

Based on HCCC’s public trading price at market close on October 11, 2021 ($9.91), the estimated implied dollar value of the Sponsor post-Business Combination ordinary shares is $57.9 million if none of the Redemption Equity is forfeited, or $40.9 million if the full amount of the Redemption Equity is forfeited.

 

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The table below reflects the ownership percentages immediately after the consummation of the Business Combination if all HCCC warrants are exercised assuming no redemptions, 50% redemptions and maximum redemptions.

 

     No Redemption
Scenario
     50% Redemption
Scenario(1)
     Max Redemption
Scenario(2)
 
     Shares      %      Shares      %      Shares      %  

HCCC Public Shareholders(3)

     41,250,000        35.3%        34,553,647        31.3%        27,857,294        27.8%  

Alpha Tau Shareholders(4)

     54,799,711        46.9%        54,799,711        49.7%        54,799,711        54.7%  

Sponsor(5)(6)

     11,623,750        9.9%        11,623,750        10.5%        8,205,000        8.2%  

PIPE Shareholders

     9,263,006        7.9%        9,263,006        8.4%        9,263,006        9.3%  
  

 

 

    

 

 

    

 

 

    

 

 

       

 

 

 

Closing Shares

     116,936,467        100.0%        110,240,114        100.0%        100,125,011        100.0%  

 

(1)

Assumes that holders of 6,696,353 public shares, or 50% of the maximum redemption, exercise their redemption rights in connection with the Business Combination.

(2)

Assumes that holders of 13,392,706 public shares exercise their redemption rights in connection with the Business Combination.

(3)

Includes 13,750,000 shares which are issuable upon exercise of all Public warrants.

(4)

Excludes the dilutive effect of options, warrants and restricted share units, including (i) options to purchase 4,982,425 ordinary shares (ii) warrants to purchase 4,599,741 ordinary shares and (iii) 1,031,250 restricted share awards and options to purchase 1,020,000 ordinary shares for $11.50 per share that were granted in connection with Business Combination.

(5)

Assumes forfeiture of the Forfeited Equity and the relevant forfeiture of the Redemption Equity in the “Max Redemption Scenario.” The table above assumes that no Conditional Equity is forfeited by the Sponsor.

(6)

Includes 4,080,000 shares issuable upon exercise of the private placement warrants held by the Sponsor after the forfeiture of the Forfeited Equity and, in the “No Redemption” and “50% Redemption” scenarios, 1,700,000 shares issuable upon exercise of the private placement warrants of the Redemption Equity.

For more information, please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

It should be noted that when the HCCC warrants become exercisable, we may require the public warrants to be exercised on a cashless basis and the private placement warrants may be exercised on a cashless basis at the option of each holder thereof.

Q: What happens to the funds deposited in the Trust Account after consummation of the Business Combination?

A: The net proceeds of the HCCC IPO, together with the partial exercise of the over-allotment option by the underwriter and a portion of the amount raised from the simultaneous private placement of HCCC warrants for a total of $275,000,000, was placed in the Trust Account immediately following the HCCC IPO. After consummation of the Business Combination, the funds in the Trust Account will be used to pay, on a pro rata basis, holders of the public shares who exercise redemption rights, to pay fees and expenses incurred in connection with the Business Combination (including aggregate fees of approximately $10.3 million to the underwriter of the HCCC IPO) and for working capital and general corporate purposes.

Q: What happens if a substantial number of public stockholders vote in favor of the Business Combination Proposal and exercise their redemption rights?

A: HCCC’s public stockholders may vote in favor of the Business Combination and still exercise their redemption rights, although they are not required to vote in any way to exercise such redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust

 

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Account and the number of public stockholders are substantially reduced as a result of redemptions by public stockholders. Nonetheless, the consummation of the Business Combination is conditioned upon, among other things, HCCC having an aggregate cash amount of at least $225 million available at Closing from the Trust Account and the PIPE Investors, after payment of deferred underwriting fees (though this condition may be waived by Alpha Tau). If the Business Combination is consummated, but we experience a significant level of redemptions, this may result in fewer public shares and public shareholders, which may result in the trading market for Alpha Tau ordinary shares being less liquid than the market for HCCC’s Class A Stock was prior to consummation of the Business Combination. In addition, Alpha Tau may not be able to meet the listing standards for the Nasdaq or another national securities exchange. Furthermore, with less funds available from the Trust Account, the capital infusion from the Trust Account into Alpha Tau’s business will be reduced. As such, Alpha Tau’s ability to perform against its business plan may be negatively impaired if redemptions by HCCC’s public stockholders are significant. See a discussion of risks related to redemption rights in “Risk Factors Relating to HCCC and the Business Combination”.

Public stockholders who purchased units as part of HCCC’s IPO for $10.00 may experience dilution if they elect not to redeem in connection with the Business Combination. The expense of the deferred underwriting commission would be borne by those stockholders who elect not to redeem.

The Business Combination also involves the $92,630,060 PIPE Investment for ordinary shares of Alpha Tau. These securities are dilutive to HCCC’s IPO investors only to the extent that HCCC’s stock price exceeds $10.00. HCCC also has public and private warrants outstanding. While these securities may be dilutive to HCCC’s IPO investors in the future, they have an exercise price of $11.50, meaning that they are not dilutive to HCCC’s IPO investors until the stock price exceeds $11.50.

HCCC’s IPO investors will also face dilution from the Founder Shares, which will automatically convert into Alpha Tau ordinary shares at the closing on a one-for-one basis, resulting in the issuance of 5,843,750 ordinary shares in the event the Aggregate Transaction Proceeds exceed $250.0 million, with relevant reductions for Redemption Equity in the event the Aggregate Transaction Proceeds are below $250.0 million, reaching 4,125,000 ordinary shares in the event the Aggregate Transaction Proceeds equal $225.0 million. Of such Founder Shares, 1,375,000 are Conditional Equity and subject to vesting over a three year period following the consummation of the Business Combination. The table below illustrates how the conversion of the Founder Shares and other sources of possible dilution affect the public stockholder ownership percentage in the combined entity.

The tables above in Q&A discussing the ownership of Alpha Tau shareholders and HCCC stockholders post-Business Combination show possible sources of dilution and the extent of such dilution that non-redeeming HCCC public stockholders could experience in connection with the closing of the Business Combination. In an effort to illustrate the extent of such dilution, the table above shows the effect of the exercise of all public and private placement warrants, which are exercisable for one whole share at a price of $11.50 per share at any time commencing on the later of 12 months from the closing of HCCC’s IPO and 30 days after the completion of the Business Combination. The table is presented assuming (i) no redemptions, (ii) 50% of the maximum redemptions and (iii) maximum redemptions that may occur but which would still provide for the satisfaction of the Minimum Cash Condition.

 

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The deferred underwriting commissions in connection with the Initial Public Offering will be released to the underwriters only on completion of the Business Combination, in an amount equal to approximately 3.75% of the gross proceeds of the Initial Public Offering. Below is a summary of the total deferred underwriting commission to be paid upon closing of the Business Combination, assuming (i) no redemptions, (ii) 50% of the maximum redemptions and (iii) maximum redemptions that may occur but which would still provide for the satisfaction of the Minimum Cash Condition of a trust account balance greater than $225.0 million, after payment of deferred underwriting fees.

 

Underwriting Fee  
     No
Redemptions
    50%
Redemptions
    Maximum
Redemptions
 

Redemptions ($)

   $ 0     $ 66,963,530     $ 133,927,060  

Redemptions (Shares)

     0       6,696,353       13,392,706  

Effective Underwriting (Total Underwriting less redemptions)

   $ 275,000,000     $ 208,036,470     $ 141,072,940  

Total Deferred Fee (%)

     3.75     3.75     3.75

Total Deferred Underwriting Fee ($)

   $ 10,325,000     $ 10,325,000     $ 10,325,000  
  

 

 

   

 

 

   

 

 

 

Effective Deferred Underwriting Fee (as a percentage of (cash left in Trust Account post redemptions))

     3.75 %      4.96 %      7.32 % 

Q: What happens if the Business Combination is not consummated?

A: If HCCC does not complete the Business Combination with Alpha Tau for whatever reason, HCCC would search for another target business with which to complete a business combination. If HCCC does not complete the Business Combination with Alpha Tau or another business combination by January 20, 2023 (or such later date as may be approved by HCCC’s stockholders in an amendment to the HCCC Charter), HCCC must redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to an amount then held in the Trust Account (net of taxes payable and less up to $100,000 of interest to pay dissolution expenses) divided by the number of outstanding public shares. The Sponsor and HCCC’s officers and directors have waived their redemption rights with respect to their Founder Shares in the event a business combination is not effected in the required time period, and, accordingly, their Founder Shares will be worthless. Additionally, in the event of such liquidation, there will be no distribution with respect to HCCC’s outstanding warrants. Accordingly, the warrants will expire worthless.

Q: How do the Sponsor and the officers and directors of HCCC intend to vote on the proposals?

A: The Sponsor, as well as HCCC’s officers and directors, beneficially own and are entitled to vote an aggregate of approximately 20.0% of the outstanding HCCC Common Stock. These holders have agreed to vote their shares in favor of the Business Combination Proposal. These holders have also indicated that they intend to vote their shares in favor of all other proposals being presented at the meeting. In addition to the shares of HCCC Common Stock held by the Sponsor and HCCC’s officers and directors, HCCC would need 10,312,501 shares, or approximately 37.5%, of the 27,500,000 public shares to be voted in favor of the Business Combination Proposal and other proposals in order for them to be approved.

Q: What interests do the Sponsor and the current officers and directors of HCCC have in the Business Combination?

A: In considering the recommendation of HCCC’s board of directors to vote in favor of the Business Combination, stockholders should be aware that, aside from their interests as stockholders, the Sponsor and certain of HCCC’s directors and officers have interests in the Business Combination that are different from, or in addition to, those of other stockholders generally. HCCC’s directors were aware of and considered these

 

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interests, among other matters, in evaluating the Business Combination, in recommending to stockholders that they approve the Business Combination and in agreeing to vote their shares in favor of the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things, the fact that:

 

   

If the Business Combination with Alpha Tau or another business combination is not consummated by January 20, 2023 (or such later date as may be approved by HCCC’s stockholders in an amendment to the HCCC Charter), HCCC will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares for cash and, subject to the approval of its remaining stockholders and board of directors, dissolving and liquidating. In such event, the Founder Shares held by the Sponsor, which were acquired for an aggregate purchase price of $25,000 prior to the HCCC IPO, would be worthless because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Such shares had an aggregate market value of $                 based upon the closing price of $                 per share on Nasdaq on                 , 2021. On the other hand, if the Business Combination is consummated, each outstanding share of HCCC Common Stock (other than the shares forfeited pursuant to the Sponsor Support Agreement) will be converted into one Alpha Tau ordinary share. In the aggregate, the 5,843,750 founder shares will be converted into HCCC Class A Stock and exchanged for 5,843,750 Alpha Tau ordinary shares.

 

   

The Sponsor purchased 6,800,000 private placement warrants from HCCC for $1.00 per private warrant. This purchase took place on a private placement basis simultaneously with the consummation of the HCCC IPO and the subsequent exercise of the underwriter’s over-allotment option. Nearly all of the proceeds HCCC received from these purchases were placed in the Trust Account. Such private placement warrants had an aggregate market value of $                 based upon the closing price of $                 per warrant on Nasdaq on                 , 2021. The private placement warrants will become worthless if HCCC does not consummate a business combination by January 20, 2023 (or such later date as may be approved by HCCC’s stockholders in an amendment to the HCCC Charter). On the other hand, if the Business Combination is consummated, each outstanding private placement warrant (other than the warrants forfeited pursuant to the Sponsor Support Agreement) will be exchanged for one warrant of Alpha Tau, assuming that the Share Split has been effected.

 

   

If HCCC is unable to complete a business combination within the required time period under the HCCC Charter, the Sponsor will be liable under certain circumstances described herein to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by HCCC for services rendered or contracted for or products sold to HCCC. If HCCC consummates a business combination, on the other hand, HCCC will be liable for all such claims.

 

   

The Sponsor and HCCC’s officers and directors and their affiliates are entitled to reimbursement of activities on HCCC’s behalf, such as identifying and investigating possible business targets and business combinations. However, if HCCC fails to consummate a business combination within the required time period under the HCCC Charter, they will not have any claim against the Trust Account for reimbursement. Accordingly, HCCC may not be able to reimburse these expenses if the Business Combination or another business combination is not completed by January 20, 2023 (or such later date as may be approved by HCCC’s stockholders in an amendment to the HCCC Charter). As of the record date, the Sponsor and HCCC’s officers and directors and their affiliates had incurred approximately $                  of unpaid reimbursable expenses.

 

   

The Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to public stockholders rather than liquidate;

 

   

Based on the difference in the purchase price of $0.004 that the Sponsor paid for the founder shares, as compared to the purchase price of $10.00 per Public Unit sold in the IPO, the Sponsor may earn a positive rate of return even if the share price of the Combined Company after the Closing falls below

 

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the price initially paid for the Public Units in the IPO and the Public Shareholders experience a negative rate of return following the Closing of the Business Combination.

 

   

In the event that a business combination is not effected, the Sponsor will not be entitled to any reimbursement of funds invested in HCCC. In total, the Sponsor has invested $6,825,000 for securities that would be worthless absent the completion of a business combination. The Sponsor, its affiliates and HCCC’s officers and directors have no loans outstanding to HCCC.

 

   

The Merger Agreement provides for the continued indemnification of HCCC’s current directors and officers and the continuation of directors and officers liability insurance covering HCCC’s current directors and officers.

 

   

HCCC’s Sponsor, officers and directors (or their affiliates) may make loans from time to time to HCCC to fund certain capital requirements. On June 16, 2020, the Sponsor agreed to loan HCCC an aggregate of up to $300,000 to cover expenses related to the HCCC IPO pursuant to a promissory note that was repaid in full upon the completion of the HCCC IPO. Additional loans may be made after the date of this proxy statement/prospectus. If the Business Combination is not consummated, the loans will not be repaid and will be forgiven except to the extent there are funds available to HCCC outside of the Trust Account.

 

   

Dr. David M. Milch, HCCC’s chairman, will be a member of the board of directors of Alpha Tau following the closing of the Business Combination and, therefore, in the future Dr. Milch will receive any cash fees, stock options or stock awards that Alpha Tau’s board of directors determines to pay to its non-executive directors.

 

   

In addition, a relative of Dr. Milch owns certain equity interests in Alpha Tau. Milch Investment Holdings LLC (of which one of Dr. Milch’s immediate family members is the beneficiary) is a passive investor in Althera Medical Ltd. (“Althera”), which owns 12,504,000 Alpha Tau ordinary shares. Milch Investment Holdings LLC’s interests in Althera was obtained through two investments totaling $252,500. Althera is under voluntary liquidation. In connection with the liquidation, Milch Investment Holdings LLC will eventually receive a percentage of Althera’s assets (including its holdings in Alpha Tau), which will be distributed to the shareholders of Althera in accordance with the provisions of Althera’s Articles of Association, and the distribution process and preference detailed therein. Milch Investment Holdings II LLC (of which one of Dr. Milch’s immediate family members is the beneficiary) directly owns 250,000 Series B Preferred Shares (the “MIH Shares”). The MIH Shares were purchased (on the same terms as other Series B investors) for an aggregate price of $1.0 million in April 2020 and had an implied aggregate value of $2.26 million based on the consideration under the Merger Agreement. Following the consummation of the Business Combination, the value of Dr. Milch’s shares will fluctuate based on the trading price of the Company’s ordinary shares on Nasdaq. Based on the $9.91 closing price of HCCC’s Class A Stock on October 11, 2021, the MIH shares had an implied aggregate value of $2.24 million.

 

   

In addition to these interests of the Sponsor and HCCC’s current officers and directors, the HCCC Charter waives the application of the “corporate opportunity” doctrine. The “corporate opportunity” doctrine generally provides that a director or officer may not take a business opportunity for his or her own if: (1) the corporation is financially able to exploit the opportunity; (2) the opportunity is within the corporation’s line of business; (3) the corporation has an interest or expectancy in the opportunity; and (4) by taking the opportunity for his or her own, the self-interest of the director or officer will be brought into conflict with the director’s or officer’s duties to the corporation. However, HCCC does not believe that the waiver of the application of the “corporate opportunity” doctrine in the HCCC Charter had any impact on its search for a potential business combination target.

Q: When do you expect the Business Combination to be completed?

A: It is currently anticipated that the Business Combination will be consummated promptly following the HCCC special meeting, which is set for                 , 2021; however, such meeting could be adjourned or postponed to a

 

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later date, as described above. The Closing (as defined below) is also subject to the approval of the holders of Alpha Tau ordinary shares and Alpha Tau preferred shares, as well as other customary closing conditions. For a description of the conditions for the completion of the Business Combination, see the section entitled “The Merger Agreement — Conditions to Closing of the Transactions.”

Q: What do I need to do now?

A: HCCC urges you to carefully read and consider the information contained in this proxy statement/prospectus, including the annexes, and to consider how the Business Combination will affect you as a stockholder and/or a warrant holder of HCCC. Stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card.

Q: When and where will the special meeting take place?

A: The special meeting will be held on                 , 2021, at                  a.m., Eastern Time, solely over the Internet by means of a live audio webcast. You may attend the special meeting webcast by accessing the web portal located at https://                 and following the instructions set forth below. Stockholders participating in the special meeting will be able to listen only and will not be able to speak during the webcast. However, in order to maintain the interactive nature of the special meeting, virtual attendees will be able to:

 

   

vote via the web portal during the special meeting webcast; and

 

   

submit questions or comments to HCCC’s directors and officers during the special meeting.

Stockholders may submit questions or comments during the meeting through the special meeting webcast by typing in the “Submit a question” box.

Q: How do I attend the special meeting?

A: Due to health concerns stemming from the COVID-19 pandemic and to support the health and well-being of HCCC’s stockholders, the special meeting will be held virtually. To register for and attend the special meeting, please follow these instructions as applicable to the nature of your ownership of HCCC Common Stock:

 

   

Shares Held of Record. If you are a record holder, and you wish to attend the virtual special meeting, go to https://                , enter the control number you received on your proxy card or notice of the meeting and click on the “Click here to register for the online meeting” link at the top of the page. Immediately prior to the start of the special meeting, you will need to log back into the meeting site using your control number.

 

   

Shares Held in Street Name. If you hold your shares in “street” name, which means your shares are held of record by a broker, bank or nominee, and you who wish to attend the virtual special meeting, you must obtain a legal proxy from the stockholder of record and e-mail a copy (a legible photograph is sufficient) of your proxy to proxy@continentalstock.com no later than 72 hours prior to the special meeting. Holders should contact their bank, broker or other nominee for instructions regarding obtaining a proxy. Holders who e-mail a valid legal proxy will be issued a meeting control number that will allow them to register to attend and participate in the special meeting. You will receive an e-mail prior to the meeting with a link and instructions for entering the special meeting. “Street” name holders should contact Continental Stock Transfer on or before                 , 2021.

Stockholders will also have the option to listen to the special meeting by telephone by calling:

 

   

Within the U.S. and Canada: (888) 965-8995 (toll-free)

 

   

Outside of the U.S. and Canada: (415) 655-0243 (standard rates apply)

 

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The passcode for telephone access:                 #. You will not be able to vote or submit questions unless you register for and log in to the special meeting webcast as described above.

Q: How do I vote?

A: If you are a holder of record of HCCC Common Stock on the record date, you may vote by virtually attending the special meeting and submitting a ballot via the special meeting webcast or by submitting a proxy for the special meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name,” you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly voted and counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the virtual special meeting and vote through the web portal, obtain a legal proxy from your broker, bank or nominee.

Q: If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

A: Your broker, bank or nominee can vote your shares without receiving your instructions on “routine” proposals only. Your broker, bank or nominee cannot vote your shares with respect to “non-routine” proposals unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee.

The Charter Proposal to approve the name of the public company being “Alpha Tau Medical Ltd.” is considered a routine proposal. Accordingly, your broker, bank or nominee may vote your shares with respect to such proposal without receiving voting instructions.

The Business Combination Proposal, each other Charter Proposal, and the Adjournment Proposal are non-routine proposals. Accordingly, your broker, bank or nominee may not vote your shares with respect to these proposals unless you provide voting instructions.

Q: May I change my vote after I have mailed my signed proxy card?

A: Yes. Stockholders of record may send a later-dated, signed proxy card to HCCC’s transfer agent at the address set forth below so that it is received prior to the vote at the special meeting or virtually attend the special meeting and submit a ballot through the web portal during the special meeting webcast. Stockholders of record also may revoke their proxy by sending a notice of revocation to HCCC’s transfer agent, which must be received prior to the vote at the special meeting. If you hold your shares in “street name,” you should contact your broker, bank or nominee to change your instructions on how to vote. If you hold your shares in “street name” and wish to virtually attend the special meeting and vote through the web portal, you must obtain a legal proxy from your broker, bank or nominee.

Q: What constitutes a quorum for the special meeting?

A: A quorum is the minimum number of shares of HCCC Common Stock that must be present to hold a valid meeting. A quorum will be present at the HCCC special meeting if a majority of the voting power of the issued and outstanding shares of HCCC Common Stock entitled to vote at the meeting are represented at the virtual special meeting or by proxy. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum. The Class A Stock and Class B Stock are entitled vote together as a single class on all matters to be considered at the special meeting.

 

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Q: What stockholder vote thresholds are required for the approval of each proposal brought before the special meeting?

 

   

Business Combination Proposal — The approval of the Business Combination Proposal will require the affirmative vote of the holders of a majority of the outstanding HCCC Common Stock. Abstentions will have the same effect as a vote “against” the Business Combination Proposal. Brokers are not entitled to vote on the Business Combination Proposal absent voting instructions from the beneficial holder and, consequently, broker non-votes will have the effect of voting against the Business Combination Proposal. The Transactions will not be consummated if HCCC has less than $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act) either immediately prior to or upon consummation of the Transactions.

 

   

Charter Proposals — The approval of each of the charter proposals will require the affirmative vote of the holders of a majority of the outstanding HCCC Common Stock. Abstentions will have the same effect as a vote “against” the Charter Proposals. The Charter Proposal to approve “Alpha Tau Medical Ltd.” as the name of the new public entity is a routine proposal and, accordingly, your broker, bank or nominee may vote your shares with respect to such proposal without receiving voting instructions. Consequently, there should be no broker non-votes with respect to such proposal. Each other Charter Proposal is considered a non-routine proposal, and, accordingly, brokers are not entitled to vote on those proposals without receiving voting instructions, and broker non-votes will have the same effect as a vote “against” each such proposal.

 

   

Adjournment Proposal — The approval of the Adjournment Proposal will require the affirmative vote of the holders of a majority of the shares of HCCC Common Stock present and entitled to vote at the special meeting. Abstentions will have the same effect as a vote “against” on the Adjournment Proposal. Broker non-votes will have no effect on the Adjournment Proposal.

Q: What happens if I fail to take any action with respect to the special meeting?

A: If you fail to take any action with respect to the meeting and the Business Combination is approved by the HCCC stockholders and consummated, you will become a shareholder and/or warrant holder of Alpha Tau.

If you fail to take any action with respect to the special meeting and the Business Combination is not approved, you will continue to be a stockholder and/or warrant holder of HCCC, as applicable, and HCCC will continue to search for another target business with which to complete an initial business combination. If HCCC does not complete an initial business combination by January 20, 2023 (or such later date as may be approved by HCCC’s stockholders in an amendment to the HCCC Charter), HCCC must cease all operations except for the purpose of winding up, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to an amount then held in the Trust Account (net of taxes payable and less up to $100,000 of interest to pay dissolution expenses), and as promptly as reasonably possible following such redemption, subject to the approval of HCCC’s remaining stockholders and its board of directors, dissolve and liquidate.

Q: What should I do with my share and/or warrant certificates?

A: Warrant holders and those stockholders who do not elect to have their shares of HCCC Common Stock redeemed for a pro rata share of the Trust Account should wait for instructions from HCCC’s transfer agent regarding what to do with their certificates. HCCC stockholders who exercise their redemption rights must deliver their share certificates to HCCC’s transfer agent (either physically or electronically) no later than two (2) business days prior to the special meeting as described above.

Upon consummation of the Transactions, the HCCC warrants, by their terms, will entitle holders to purchase shares of Alpha Tau. Therefore, warrant holders need not deliver their warrants to HCCC or Alpha Tau at that time.

 

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Q: What should I do if I receive more than one set of voting materials?

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

Q: Who can help answer my questions?

A: If you have questions about the Business Combination or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card, you should contact the proxy solicitor at                 .

Tel:

Attn:

Email:

You may also obtain additional information about HCCC from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.” If you are a holder of public shares and you intend to seek redemption of your shares, you will need to deliver your shares (either physically or electronically) to HCCC’s transfer agent at the address below at least two (2) business days prior to the vote at the special meeting. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Mr. Mark Zimkind

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004

E-mail: mzimkind@continentalstock.com

 

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SUMMARY

This summary highlights selected information from this proxy statement/prospectus. It may not contain all of the information that is important to you. You should carefully read the entire proxy statement/prospectus and the other documents referred to in this proxy statement/prospectus, including the annexes, to fully understand the Merger Agreement, the Business Combination and the other matters being considered at the special meeting of HCCC stockholders. For additional information, see “Where You Can Find More Information” beginning on page 311. Each item in this summary refers to the page of this proxy statement/prospectus on which that subject is discussed in more detail.

The Parties to the Business Combination

Alpha Tau Medical Ltd.

We are a clinical-stage oncology therapeutics company focused on the research, development and commercialization of alpha radiation technology as a highly potent, yet uniquely conformal, localized radiation therapy for solid tumors. Our proprietary Alpha DaRT technology is designed to utilize the specific therapeutic properties of alpha particles while aiming to overcome, and even harness for potential benefit, the traditional shortcomings of alpha radiation’s limited range. We believe that our Alpha DaRT technology has the potential to be broadly applicable across multiple targets and tumor types. We evaluated the feasibility, safety and efficacy of the Alpha DaRT technology in a first-in-human study of locally advanced and recurrent squamous cell carcinoma, or SCC, cancers of the skin and head and neck. Efficacy was evaluated in 28 tumors, and results showed that Alpha DaRT achieved 100% overall response rate and over 78% complete response rate. The Alpha DaRT was generally well-tolerated, with limited local toxicity and no systemic toxicity. On the basis of this clinical trial as well as some of our further clinical trials, we received marketing approval in Israel in August 2020 for the treatment of SCC of the skin or oral cavity using the Alpha DaRT. In June 2021, the FDA granted the Alpha DaRT Breakthrough Device Designation for the treatment of patients with SCC of the skin or oral cavity without curative standard of care. In October 2021, the FDA granted the Alpha DaRT a second Breakthrough Device Designation, in treating recurrent Glioblastoma Multiforme, or GBM, as an adjunct to standard medical therapies or as a standalone therapy after standard medical therapies have been exhausted. We expect these designations will support priority review of potential marketing applications in the U.S. as well as additional reimbursement pathways in these indications. We expect to commercialize our Alpha DaRT technology first in the United States before other markets, including Israel, notwithstanding our existing marketing authorization in Israel. To support our US strategy, we are conducting a multi-center pilot feasibility trial to explore the feasibility of delivering radiotherapy for malignant skin and superficial soft tissue tumors using Alpha DaRT at Memorial Sloan Kettering Cancer Center and up to five other clinical sites around the United States. Our first patient was recruited into this trial in early July 2021. We hold exclusive rights to our proprietary Alpha DaRT technology in our core markets, including the United States and Europe.

While local radiation therapy has been a mainstay of cancer therapy for years, it has been mostly limited to modalities utilizing beta or gamma emissions, which primarily destroy cells through an indirect mechanism relying on oxygen and the generation of free radicals to cause single-strand DNA breaks. By contrast, alpha radiation has hundreds of times the linear energy transfer rate of beta-emitters. Additionally, alpha particles’ heavier mass and far shorter particle paths (less than 100 µm) relative to beta’s lighter mass and lengthier (up to 12 mm) path, have been shown to destroy radioresistant cells in clinical studies – causing multiple, irreparable, double-strand DNA breaks and other cellular damage upon direct impact – within a very short distance. Accordingly, we believe that alpha radiation has several significant potential advantages for use in cancer radiotherapy, including a high relative biological efficiency (potentially enabling it to destroy tumor cells with administration of lower levels of radiation), imperviousness to factors such as hypoxia, and a very well-defined range of travel with limited collateral damage. Nonetheless, its use has also been limited precisely due to alpha’s extremely short particle range in living tissue, as the range of less than 100 µm is insufficient to provide meaningful clinical utility.


 

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The Alpha DaRT technology employs a series of radioactive sources that are embedded with Radium-224 to enable a controlled, intratumoral release of alpha-emitting atoms which diffuse and decay throughout the tumor, seeking to kill cancerous cells with localized precision, while penetrating deeper into the tumor than can otherwise be reached by the limited ranges of the alpha particles themselves. Due to the inherent limited range of the alpha particles, we believe that the Alpha DaRT technology has the potential to deliver powerful and localized precise killing impact to the tumor without damage to surrounding healthy tissue. By combining the size and potency of alpha particles in a single-use disposable form, we believe that the Alpha DaRT may offer potent local radiation to tumors that have otherwise demonstrated poor response to radiation therapy or other standards of care, with the potential to apply to a wide range of tumors and clinical settings.

We evaluated the feasibility, safety and efficacy of the Alpha DaRT technology in a first-in-human study of locally advanced and recurrent SCC cancers of the skin and head and neck, the results of which were subsequently published in the International Journal for Radiation Oncology, Biology, Physics and which elicited a positive editorial reaction in the same journal. Efficacy was evaluated in 28 tumors of the skin and head and neck, and results showed that Alpha DaRT achieved a >78% complete response rate. The trial was conducted in an elderly (median age = 80.5 years) and largely pre-treated patient population, with 42% of the target lesions, including non-evaluated lesions, having already received radiation therapy. The Alpha DaRT was generally well- tolerated, with limited local toxicity and no systemic toxicity. Following these initial positive results, we substantially expanded our clinical evaluations in later trials to a much wider patient population. Specifically, we initiated follow-on studies at multiple clinical sites in Israel and around the world, to evaluate Alpha DaRT in cancers of the skin, superficial soft tissue, or oral cavity, regardless of cell type, which includes SCC as well as basal cell carcinoma, melanoma, skin metastases, and others. As of September 30, 2021, across our clinical trials involving superficial lesions, i.e. tumors of the skin, head or neck, the Alpha DaRT treatment has been administered to over 90 lesions, with no treatment-related severe adverse events, and among those lesions that reached the evaluation endpoint we observed an overall response rate of 93%. The supportive data from these first trials also led to the U.S. Food and Drug Administration, or FDA, granting Breakthrough Device Designation to the Alpha DaRT for the treatment of patients with SCC of the skin or oral cavity without curative standard of care. We expect the designation will support priority review of potential marketing applications in the U.S. as well as an expedited reimbursement pathway in this indication.

In parallel, we are pursuing a similar approach towards seeking FDA marketing authorization for other uses for the Alpha DaRT technology in other indications by conducting feasibility studies and then generating potentially registrational data in other indications, such as breast, pancreas and prostate cancers, or applications such as combinations with immunotherapies.

We have engaged with a number of prestigious medical and educational institutions and, as of June 30, 2021, currently have seven clinical studies ongoing worldwide across these two parallel strategies, of generating data in superficial tumors as well as conducting studies in other indications.

Additionally, in our pre-clinical studies, we evaluated the Alpha DaRT on 19 tumor models (both human and mouse). Alpha DaRT sources were observed to have killed multiple types of mouse and human tumors in vivo. The intensity of the killing activity varied between tumor types, and was dependent on the ability of the radioactive atoms to diffuse inside the tumor and on the intrinsic sensitivity of the tissue to DNA damage induced by the radiation, but all tumor types showed responsiveness to Alpha DaRT, i.e., there was no observed resistance. We therefore believe that our technology may potentially be relevant for treatment across a broad range of tumors. We are currently focused on developing the Alpha DaRT for use in a number of potential applications, particularly in refractory or unresectable localized tumors which are not being adequately addressed by standard of care, tumor types with a high unmet need (such as pancreatic adenocarcinoma or glioblastoma multiforme), and metastatic tumors in combination with systemic therapies such as checkpoint inhibitors. We are also investigating the potential of the Alpha DaRT to elicit an immune response as observed in previous pre-clinical data, as well as anecdotal evidence of response from untreated tumors, or abscopal effects, which may have the potential to inhibit or even reduce metastases.


 

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The Company was founded in November 2015 by Uzi Sofer, our Chief Executive Officer and Chairman, along with the inventors of the Alpha DaRT technology including Professor Itzhak Kelson and Professor Yona Keisari of Tel Aviv University, our Chief Physics Officer and Chief Scientific Officer, respectively. Together, they founded Alpha Tau with the goal of bringing this innovative technology out of the laboratory and into patients, in order to harness the unique and precise strength of alpha radiation to bring hope to cancer patients around the world.

The main address of Alpha Tau’s principal executive offices is Kiryat HaMada St. 5, Jerusalem, Israel 9777605 and its telephone number is +972 (3) 577-4115.

Healthcare Capital Corp.

HCCC was formed under the laws of the State of Delaware on August 18, 2020 for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities.

On January 20, 2021, HCCC closed its initial public offering of 27,500,000 units, including 3,500,000 units issued pursuant to the partial exercise of the underwriters’ over-allotment option, with each unit consisting of one share of Class A Stock and one-half of one redeemable warrant, with each whole warrant entitling the holder to purchase one share of Class A Stock at a price of $11.50 commencing 30 days after the consummation of an initial business combination.

HCCC’s units, the Class A Stock and the HCCC warrants are listed on the Nasdaq under the symbols HCCCU, HCCC and HCCCW, respectively.

The mailing address of HCCC’s principal executive office is 301 North Market Street, Suite 1414 Wilmington, DE 19801, and its telephone number is (561) 810-0031. After the consummation of the Business Combination, HCCC’s principal executive office will be that of Alpha Tau.

Archery Merger Sub, Inc.

Archery Merger Sub Inc. (“Merger Sub”) is a newly formed Delaware corporation and a wholly owned subsidiary of Alpha Tau. Merger Sub was formed solely for the purpose of effecting the Business Combination and has not carried on any activities other than those in connection with the Business Combination. The address and telephone number for Merger Sub’s principal executive offices are the same as those for Alpha Tau.

The Merger Agreement (page A-1)

The terms and conditions of the merger of Merger Sub with and into HCCC, with HCCC surviving the merger as a wholly owned subsidiary of Alpha Tau (the “Business Combination”) are contained in the Merger Agreement, which is attached as Annex A to this proxy statement/prospectus. We encourage you to read the Merger Agreement carefully, as it is the legal document that governs the Business Combination.

Merger Consideration

Prior to the Effective Time, Alpha Tau intends to effect a share split (the “Share Split”) such that each Alpha Tau ordinary share that is issued and outstanding immediately prior to the Effective Time will be split into 0.905292 Alpha Tau ordinary shares (the “Split Factor”). The Split Factor was set as of the date of the execution of the Merger Agreement and is based upon the pre-money equity value of the Company.


 

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The pro forma equity valuation of the Company upon consummation of the Transactions is estimated to be approximately $1 billion (assuming no redemptions, and based only on outstanding shares and vested warrants/options on a net exercise basis). Alpha Tau estimates that, upon consummation of the Transactions (the “Effective Time”), assuming (i) none of HCCC’s public stockholders demand redemption (“SPAC Redemptions”) pursuant to HCCC’s amended and restated certificate of incorporation (“HCCC Charter”), (ii) the completion of the Share Split and (iii) the completion of the Forfeiture, the securityholders of Alpha Tau will own approximately 56.3% of the outstanding Alpha Tau ordinary shares, the current securityholders of HCCC will own approximately 28.2% of the outstanding Alpha Tau ordinary shares, the Sponsor will own approximately 4.6% of the outstanding Alpha Tau ordinary shares (and an additional 1.4% of Conditional Equity that is subject to market vesting conditions described below) and the PIPE Investors will own will own approximately 9.5% of the outstanding Alpha Tau ordinary shares.

Pursuant to the Merger Agreement and assuming the Share Split has been effected, at the Effective Time (a) each share of Class A Stock, outstanding immediately prior to the Effective Time will be exchanged for one Alpha Tau ordinary share, subject to adjustment described herein, (b) each share of Class B Stock, outstanding immediately prior to the Effective Time, after giving effect to the forfeiture of 1,031,250 shares of Class B Stock pursuant to the Sponsor Support Agreement (as defined below), will be exchanged for one Alpha Tau ordinary share and (c) each warrant of HCCC entitling the holder to purchase one share of Class A Stock per warrant at a price of $11.50 per share (each, an “HCCC warrant”) outstanding immediately prior to the Effective Time, after giving effect to the forfeiture of 1,020,000 HCCC warrants pursuant to the Sponsor Support Agreement, will be assumed by Alpha Tau and will become a warrant of Alpha Tau (each, an “Alpha Tau warrant”), with the number of Alpha Tau ordinary shares underlying the Alpha Tau warrants and the exercise price of such Alpha Tau warrants subject to adjustment in accordance with the Merger Agreement in the event of a share split, share dividend or distribution, or any change in Alpha Tau’s share capital by reason of any split-up, reverse share split, recapitalization, combination, reclassification, exchange of shares, in each case less any applicable withholding taxes.

Agreements Entered Into in Connection with the Merger Agreement (page 135)

Subscription Agreements

Concurrently with the execution of the Merger Agreement, Alpha Tau entered into subscription agreements (each, a “Subscription Agreement” and collectively, the “Subscription Agreements”) with certain parties subscribing for Alpha Tau ordinary shares (the “PIPE Investors”), pursuant to which the PIPE Investors have agreed to purchase, and Alpha Tau has agreed to sell the PIPE Investors, an aggregate of 9,263,006 Alpha Tau ordinary shares, at a purchase price of $10.00 per share, for an aggregate purchase price of $92,630,060, which price per share and aggregate purchase price assume that Alpha Tau has effected the Share Split prior to the Effective Time. The obligations to consummate the transactions contemplated by the Subscription Agreements are conditioned upon, among other things, the consummation of the transactions contemplated by the Merger Agreement.

The Subscription Agreements provide that Alpha Tau is required to file with the SEC, within 45 days (the “Subscription Filing Deadline”) after the Closing, a registration statement registering the resale of the Alpha Tau ordinary shares to be issued to any such investor and to use its commercially reasonable efforts to have such registration statement declared effective as soon as practicable after the filing thereof but no later than the earlier of (i) the 90th calendar day (or 120th calendar day if the SEC notifies Alpha Tau that it will “review” such registration statement) following the earlier of (A) the filing of the registration statement and (B) the Subscription Filing Deadline and (ii) the 10th business day after the date Alpha Tau is notified (orally or in writing, whichever is earlier) by the SEC that such registration statement will not be “reviewed” or will not be subject to further review.


 

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Alpha Tau Support Agreement

Concurrently with the execution of the Merger Agreement, Alpha Tau and HCCC entered into a support agreement (the “Alpha Tau Support Agreement”) with certain shareholders of Alpha Tau (each, a “Supporting Alpha Tau Shareholder” and collectively, the “Supporting Alpha Tau Shareholders”) that collectively hold Alpha Tau ordinary shares and Alpha Tau preferred shares representing the majority of the voting power of the Alpha Tau ordinary shares and the Alpha Tau preferred shares, on an as-converted basis, and a majority of the voting power of the Alpha Tau preferred shares. The Alpha Tau Support Agreement provides, among other things, that each Supporting Alpha Tau Shareholder will, among other items, (i) vote all beneficially owned shares of Alpha Tau in favor of the Business Combination and the other transactions contemplated by the Merger Agreement and each other proposal on the agenda at a shareholder meeting called by Alpha Tau, (ii) appear at such meeting or otherwise cause such shares to be counted as present thereat for the purpose of establishing a quorum; (iii) vote or execute a written consent against any Company Alternative Transaction Proposal (as defined in the Merger Agreement) and any other action that would reasonably be expected to impede, interfere with, delay, postpone or adversely affect the Business Combination or any of the other transactions contemplated by the Merger Agreement or result in a breach of any covenant, representation or warranty or other obligation or agreement of Alpha Tau under the Merger Agreement or any other agreement entered into in connection with; and (iv) not transfer, assign or sell such shares, except to certain permitted transferees, prior to the consummation of the Transactions.

Additionally, pursuant to the Alpha Tau Support Agreement, such Supporting Alpha Tau Shareholders agreed not to transfer any of Alpha Tau’s equity securities owned by owned by such Supporting Alpha Tau Shareholders, except to certain permitted transferees, beginning at the Effective Time and continuing until the earlier of (x) 180 days following the Closing Date and (y) following the date that the last sale price of the Alpha Tau ordinary shares equals or exceeds $12.00 per share (subject to certain adjustments) for any 20 trading days within any 30 trading day period commencing at least 150 days after the Closing Date.

Investors’ Rights Agreement

On July 7, 2021, Alpha Tau amended and restated its existing Amended Investors’ Rights Agreement, dated as of April 16, 2020 (the “Amended IRA”), which provides, among other things, that certain holders of Alpha Tau’s ordinary shares, have the right to demand that Alpha Tau file a registration statement, or to request that their shares be covered by a registration statement that Alpha Tau is otherwise filing. The Amended IRA will also provide that Alpha Tau will pay certain expenses relating to such registrations and indemnify the shareholders against certain liabilities.

Sponsor Support Agreement

Concurrently with the execution of the Merger Agreement, the Sponsor and officers and directors of HCCC entered into a letter agreement (the “Sponsor Support Agreement”) in favor of Alpha Tau and HCCC, pursuant to which they agreed to (i) vote all shares of HCCC Common Stock beneficially owned by them in favor of the Transactions and each other proposal related to the Transactions proposed by HCCC’s board of directors at the meeting of the HCCC stockholders relating to the Transactions; (ii) appear at such stockholder meeting (or otherwise cause such shares to be counter as present thereat) for the purpose of establishing a quorum; (iii) vote all such shares against any action that would reasonably be expected to impede, interfere with, delay, postpone or adversely affect the Business Combination or any of the other transactions contemplated by the Merger Agreement or result in a breach of any covenant, representation or warranty or other obligation or agreement of HCCC under the Merger Agreement or any other agreement entered into in connection with the Transactions or result in any of the conditions set forth in Article IX of the Merger Agreement not being fulfilled and against any change in business, management or the board of directors of HCCC (other than as contemplated by the


 

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Transactions); (v) not redeem or seek to redeem any such shares, in connection with the required approval by the stockholders of HCCC; and (vi) not transfer, assign or sell such shares, except to certain permitted transferees, prior to the consummation of the Transactions.

Additionally, pursuant to the Sponsor Support Agreement, the Sponsor and such insiders agreed not to transfer any of the Alpha Tau’s equity securities owned by the Sponsor and such insiders, except to certain permitted transferees, beginning at the Effective Time and continuing until the earlier of (x) one year following the Closing Date and (y) following the date that the last sale price of the Alpha Tau ordinary shares equals or exceeds $12.00 per share (subject to certain adjustments) for any 20 trading days within any 30 trading day period commencing at least 150 days after the Closing Date.

The Sponsor Support Agreement also provides that (i) immediately prior to the Effective Time, the Sponsor will forfeit (and the Sponsor shall take all actions necessary to effect such transfer, surrender and forfeiture) for no consideration, 1,031,250 Founder Shares and 1,020,000 private placement warrants (the “Forfeiture”) (ii) up to 1,718,750 Founder Shares and up to 1,700,000 private placement warrants (the “Redemption Equity”) owned by the Sponsor or the insiders is subject to forfeiture (for no consideration), the terms and amounts of such forfeiture dependent both on the closing of the Business Combination and on the amount of Aggregate Transaction Proceeds and (iii) an additional 1,375,000 shares and 1,360,000 private placement warrants (the “Conditional Equity”) are subject to vesting over a three year period following the Closing Date (the “Earnout Period”) based upon the trading price of the Alpha Tau ordinary shares on the Nasdaq during the Earnout Period.

Amended and Restated Warrant Agreement

Upon the closing of the Business Combination, Alpha Tau, HCCC and Continental Stock Transfer & Trust Company (“Continental”) will enter into an amended and restated warrant agreement (the “Amended and Restated Warrant Agreement”). Such agreement will amend and restate that certain Warrant Agreement, dated as of January 14, 2021, between HCCC and Continental (the “Existing Warrant Agreement”), to provide for the assignment by HCCC of all its rights, title and interest in the outstanding warrants of HCCC to Alpha Tau. Pursuant to the Amended and Restated Warrant Agreement, all HCCC warrants under the Existing Warrant Agreement will no longer be exercisable for shares of Class A Stock, but instead will be exercisable for Alpha Tau ordinary shares.

The Charter Proposals

The HCCC stockholders will vote on separate proposals to approve the following material differences between the HCCC Charter and the Alpha Tau Articles to be effective upon the consummation of the Business Combination: (i) the name of the new public entity will be “Alpha Tau Medical Ltd.” as opposed to “Healthcare Capital Corp.”; (ii) the Alpha Tau Articles provide for one class of ordinary shares as opposed to the two classes of HCCC Common Stock provided for in the HCCC Charter; (iii) Alpha Tau’s corporate existence is perpetual as opposed to HCCC’s corporate existence terminating if a business combination is not consummated within a specified period of time; and (iv) the Alpha Tau Articles do not include the various provisions applicable only to special purpose acquisition corporations that the HCCC Charter contains. The Alpha Tau Articles to be in effect upon consummation of the Business Combination is attached as Annex B to this proxy statement/prospectus. See the section of this proxy statement/prospectus titled “Proposal Two—The Charter Proposals.”

The Adjournment Proposal

If HCCC is unable to consummate the Business Combination at the time of the special meeting for any reason, the chairman presiding over the special meeting may submit a proposal to adjourn the special meeting to a later date or dates, if necessary. See the section of this proxy statement/prospectus titled “Proposal Three—The Adjournment Proposal.”


 

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Date, Time and Place of Special Meeting of HCCC’s Stockholders

The special meeting will be held at                , Eastern time, on                 , 2021, via live webcast at https://                , or such other date, time and place to which such meeting may be adjourned, to consider and vote upon the proposals.

Voting Power; Record Date

HCCC stockholders will be entitled to vote or direct votes to be cast at the special meeting if they owned HCCC Common Stock at the close of business on                 , 2021, which is the record date for the special meeting. HCCC stockholders will have one vote for each share of HCCC Common Stock owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. HCCC warrants do not have voting rights. On the record date, there were                 shares of HCCC Common Stock outstanding, of which                  were public shares with the rest being held by the initial stockholders and their respective affiliates (including the Sponsor).

Redemption Rights

Pursuant to the HCCC Charter, a holder of public shares may demand that HCCC redeem such shares for cash if the Business Combination is consummated; provided that HCCC may not consummate the Business Combination if it has less than $5,000,001 of net tangible assets either immediately prior to or upon consummation of the Business Combination. Holders of public shares will be entitled to receive cash for these shares only if they deliver their shares to HCCC’s transfer agent no later than two (2) business days prior to the special meeting. Holders of public shares do not need to affirmatively vote on the Business Combination Proposal or be a holder of such public shares as of the record date to exercise redemption rights. If the Business Combination is not consummated, these shares will not be redeemed for cash. If a holder of public shares properly demands redemption, delivers his, her or its shares to HCCC’s transfer agent as described above, and the Business Combination is consummated, HCCC will redeem each public share for a pro rata portion of the Trust Account, calculated as of two (2) business days prior to the date of the special meeting. It is anticipated that this would amount to approximately $                 per share. If a holder of public shares exercises his, her or its redemption rights, then such holder will be exchanging his, her or its shares of HCCC Class A Stock for cash and will not become a shareholder of Alpha Tau. See the section of this proxy statement/prospectus titled “Special Meeting of HCCC Stockholders — Redemption Rights” for a detailed description of the procedures to be followed if you wish to redeem your shares into cash.

HCCC warrant holders do not have redemption rights with respect to such securities.

Appraisal Rights

HCCC stockholders and HCCC warrant holders do not have appraisal rights in connection with the Transactions under the DGCL. See the section of this proxy statement/prospectus titled “Special Meeting of HCCC Stockholders—Appraisal Rights.”

HCCC’s Board of Directors’ Reasons for the Business Combination

In evaluating the Business Combination, HCCC’s board of directors reviewed a number of materials, including the transaction documentation, certain due diligence summary materials prepared by HCCC’s management and advisors, investor presentations, and various industry and financial data and consulted with HCCC’s management, legal, financial, medical and other advisors, including medical advisor Dr. Stephen Hahn,


 

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a former Commissioner of the Food and Drug Administration, former Chief Medical Officer of the University of Texas MD Anderson Cancer Center and a board certified medical and radiation oncologist. The advisors had full access to all of the materials provided to HCCC and advised the board of directors on the opportunity and risks of the Business Combination.

In light of the number and wide variety of factors considered in connection with its evaluation of the Business Combination, the HCCC’s board of directors did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors that it considered in reaching its determination and supporting its decision to approve the Business Combination. The HCCC’s board of directors viewed its decision as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors. This explanation of the HCCC’s board of directors’ reasons for the Business Combination and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under “Cautionary Statement Regarding Forward-Looking Statements; Market, Ranking and Other Industry Data.”

The officers and directors of HCCC have substantial experience in evaluating the operating and financial merits of companies within the healthcare sector and concluded that their experience and background and sector expertise enabled them to make the necessary analyses and determinations regarding the Business Combination. In addition, HCCC’s officers and directors have substantial experience with mergers and acquisitions across a variety of sectors in the healthcare industry.

In evaluating the Business Combination, the HCCC’s board of directors considered the criteria and guidelines to evaluate prospective business opportunities set by the HCCC’s management team in the HCCC IPO prospectus and has determined that Alpha Tau meets all of these criteria. Specifically, the HCCC’s board of directors noted, among others, that:

 

   

Demonstrated science and scalable platform attributes. Alpha Tau’s pre-clinical results and initial human use results with the Alpha DaRT have generated a response observed in all of the tumor types it has been used to treat, while demonstrating a mild side effect profile. The global addressable market is very large given the broad set of potential indications, and Alpha Tau has demonstrated production capabilities required to build scale and serve demand by manufacturing products at an attractive marginal cost.

 

   

Proprietary technology driven by world-class science and medical research. Alpha Tau’s proprietary technology is well developed and protected. Alpha Tau is unique in its alpha radiation therapy approach. The Alpha DaRT source is directly inserted into the tumor and is designed to release radiation with a high-linear energy transfer over a range of a few millimeters, potentially sparing the surrounding healthy tissue.

 

   

Benefits to Alpha Tau from being a public company. Commercializing and scaling Alpha Tau’s broadly applicable oncology therapy will require significant capital investment in coming years, and public markets could serve as an offer attractive low-cost source of capital.

 

   

Strong management team with a demonstrated track record. Alpha Tau’s management team has significant experience across the scientific and medical device space, in addition to having financial and global management capabilities. Alpha Tau’s management team includes renowned doctors, scientists, and engineers who have been contributing to development of the treatment for over a decade.

 

   

Attractive valuation that can provide attractive returns for public investors. The board of directors believes that Alpha Tau’s valuation is attractive relative to comparable publicly traded companies. Moreover, the valuation is supported by insiders and strategic investors that have subscribed to the PIPE.


 

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Alpha Tau would benefit from our team’s expertise. The HCCC team’s continued involvement in Alpha Tau as shareholders, as well as Dr. Milch’s involvement as a board member, following the Business Combination and their diverse experience in clinical work, academia, regulatory affairs, research, technology development and operations management can add substantial value to accelerate Alpha Tau’s research and development and commercialization efforts.

HCCC’s board of directors also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination, including, but not limited to, the following:

 

   

Market Adoption. Whether the adoption of the Alpha DaRT therapy would occur and be widespread.

 

   

Limited Operating History. Alpha Tau’s limited operating history makes evaluating its business and future prospects difficult.

 

   

Public Company Infrastructure. The need to update Alpha Tau’s operations and financial systems necessary for it to transition from a private to a public company.

 

   

Clinical Trial Risk. The importance of clinical trial results demonstrating attractive safety and efficacy profiles for the Alpha DaRT, as Alpha Tau continues to expand its clinical trials across geographies and indications.

 

   

Regulatory Matters. Regulatory approvals have an impact on Alpha Tau’s research and development timelines, go-to-market strategy, and commercialization efforts.

 

   

Key Personnel. It is vital for Alpha Tau to retain and continue to find experienced personnel in a competitive industry. Loss of key personnel could be detrimental to Alpha Tau’s research and development efforts and to its operations.

 

   

Macroeconomic Risks and Uncertainty. Macroeconomic and geo-political risks could prohibit Alpha Tau from achieving the full benefits of the proposed Business Combination.

 

   

Redemption Risk. The potential that a significant number of HCCC stockholders elect to redeem their shares prior to the consummation of the Business Combination and pursuant to HCCC’s existing charter, which would potentially make the Business Combination more difficult or impossible to complete.

 

   

Stockholder Vote. The risk that HCCC’s stockholders may fail to provide the respective votes necessary to effect the Business Combination.

In addition to considering the factors described above, HCCC’s board of directors also considered other factors including, without limitation:

 

   

Interests of Certain Persons. Some officers and directors of HCCC may have interests in the Business Combination. See the section titled “Proposal One—The Business Combination Proposal—Interests of Certain Persons in the Business Combination” beginning on page 118 of this proxy statement/prospectus; and

 

   

Other Risks. Various other risks associated with Alpha Tau’s business, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus.

HCCC’s board of directors concluded that the potential benefits that it expected HCCC and its stockholders to achieve as a result of the Business Combination outweighed the potentially negative factors associated with the Business Combination. Accordingly, HCCC’s board of directors determined that the Merger Agreement and the Business Combination contemplated therein were advisable, fair to and in the best interests of HCCC and its stockholders.


 

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Interests of HCCC’s Directors and Officers in the Business Combination

In considering the recommendation of HCCC’s board of directors to vote in favor of the Business Combination Proposal and the Charter Proposals, stockholders should keep in mind that the Sponsor and HCCC’s directors and executive officers have interests in such proposals that are different from, or in addition to, those of HCCC’s stockholders generally. In particular:

 

   

If the Business Combination with Alpha Tau or another business combination is not consummated by January 20, 2023 (or such later date as may be approved by HCCC’s stockholders in an amendment to the HCCC Charter), HCCC will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares for cash and, subject to the approval of its remaining stockholders and HCCC’s board of directors, dissolving and liquidating. In such event, the Founder Shares held by the Sponsor, which were acquired for an aggregate purchase price of $25,000 prior to the HCCC IPO, would be worthless because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Such shares had an aggregate market value of $                 based upon the closing price of $                 per share on Nasdaq on                 , 2021. On the other hand, if the Business Combination is consummated, each outstanding share of HCCC Common Stock (other than the shares forfeited pursuant to the Sponsor Support Agreement) will be converted into one Alpha Tau ordinary share, subject to adjustment described herein. In the aggregate, the 5,843,750 founder shares will be converted into HCCC Class A Stock and exchanged for 5,843,750 Alpha Tau ordinary shares.

 

   

The Sponsor purchased 6,800,000 private placement warrants from HCCC for $1.00 per private warrant. This purchase took place on a private placement basis simultaneously with the consummation of the HCCC IPO and the subsequent exercise of the underwriter’s overallotment option. Nearly all of the proceeds HCCC received from these purchases were placed in the Trust Account. Such private placement warrants had an aggregate market value of $                 based upon the closing price of $                 per warrant on Nasdaq on                 , 2021. The private placement warrants will become worthless if HCCC does not consummate a business combination by January 20, 2023 (or such later date as may be approved by HCCC’s stockholders in an amendment to the HCCC Charter). On the other hand, if the Business Combination is consummated, each outstanding private placement warrant (other than the warrants forfeited pursuant to the Sponsor Support Agreement) will become exercisable for one Alpha Tau ordinary share for $11.50 per share, subject to adjustment as described herein.

 

   

If HCCC is unable to complete a business combination within the required time period, the Sponsor will be liable under certain circumstances described herein to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by HCCC for services rendered or contracted for or products sold to HCCC. If HCCC consummates a business combination, on the other hand, HCCC will be liable for all such claims.

 

   

The Sponsor and HCCC’s officers and directors and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on HCCC’s behalf, such as identifying and investigating possible business targets and business combinations. However, if HCCC fails to consummate a business combination within the required period, they will not have any claim against the Trust Account for reimbursement. Accordingly, HCCC may not be able to reimburse these expenses if the Business Combination or another business combination is not completed by January 20, 2023 (or such later date as may be approved by HCCC’s stockholders in an amendment to the HCCC Charter). As of the record date, the Sponsor and HCCC’s officers and directors and their affiliates had incurred approximately $                  of unpaid reimbursable expenses.

 

   

The Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to public stockholders rather than liquidate;


 

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Based on the difference in the purchase price of $0.004 that the Sponsor paid for the founder shares, as compared to the purchase price of $10.00 per Public Unit sold in the IPO, the Sponsor may earn a positive rate of return even if the share price of the Combined Company after the Closing falls below the price initially paid for the Public Units in the IPO and the Public Shareholders experience a negative rate of return following the Closing of the Business Combination.

 

   

In the event that a business combination is not effected, the Sponsor will not be entitled to any reimbursement of funds invested in HCCC. In total, the Sponsor has invested $6,825,000 for securities that would be worthless absent the completion of a business combination. The Sponsor, its affiliates and HCCC’s officers and directors have no loans outstanding to HCCC.

 

   

The Merger Agreement provides for the continued indemnification of HCCC’s current directors and officers and the continuation of directors and officers liability insurance covering HCCC’s current directors and officers.

 

   

HCCC’s Sponsor, officers and directors (or their affiliates) may make loans from time to time to HCCC to fund certain capital requirements. On September 2, 2020, the Sponsor agreed to loan HCCC an aggregate of up to $300,000 to cover expenses related to the HCCC IPO pursuant to a promissory note that was repaid in full on March 31, 2021. Additional loans may be made after the date of this proxy statement/prospectus. If the Business Combination is not consummated, the loans will not be repaid and will be forgiven except to the extent there are funds available to HCCC outside of the Trust Account.

 

   

Dr. David M. Milch, HCCC’s chairman, will be a member of the board of directors of Alpha Tau following the closing of the Business Combination and, therefore, in the future Dr. Milch will receive any cash fees, stock options or stock awards that Alpha Tau’s board of directors determines to pay to its non-executive directors.

 

   

In addition, a relative of Dr. Milch owns certain equity interests in Alpha Tau. Milch Investment Holdings LLC (of which one of Dr. Milch’s immediate family members is the beneficiary) is a passive investor in Althera Medical Ltd. (“Althera”), which owns 12,504,000 Alpha Tau ordinary shares. Milch Investment Holdings LLC’s interests in Althera was obtained through two investments totaling $252,500. Althera is under voluntary liquidation. In connection with the liquidation, Milch Investment Holdings LLC will eventually receive a percentage of Althera’s assets (including its holdings in Alpha Tau), which will be distributed to the shareholders of Althera in accordance with the provisions of Althera’s Articles of Association, and the distribution process and preference detailed therein. Milch Investment Holdings II LLC (of which one of Dr. Milch’s immediate family members is the beneficiary) directly owns 250,000 Series B Preferred Shares (the “MIH Shares”). The MIH Shares were purchased (on the same terms as other Series B investors) for an aggregate price of $1.0 million in April 2020 and had an implied aggregate value of $2.26 million based on the consideration under the Merger Agreement. Following the consummation of the Business Combination, the value of Dr. Milch’s shares will fluctuate based on the trading price of the Company’s ordinary shares on Nasdaq. Based on the $9.91 closing price of HCCC’s Class A Stock on October 11, 2021, the MIH shares had an implied aggregate value of $2.24 million.

Recommendation to HCCC Stockholders

HCCC’s board of directors has determined that each of the proposals outlined above is fair to and in the best interests of HCCC and its stockholders and recommended that HCCC stockholders vote “FOR” the Business Combination Proposal, “FOR” each of the Charter Proposals, and “FOR” the Adjournment Proposal, if presented.


 

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Certain Material U.S. Federal Income Tax Considerations (page 254)

For a description of certain material U.S. federal income tax consequences of the Business Combination, the exercise of redemption rights in respect of shares of HCCC Common Stock and the ownership and disposition of Alpha Tau ordinary shares and/or Alpha Tau warrants, please see “Certain Material U.S. Federal Income Tax Considerations” beginning on page 254.

Certain Material Israeli Tax Considerations (page 269)

For a description of certain material Israeli tax consequences of the ownership and disposition of Alpha Tau ordinary shares and/or Alpha Tau warrants, please see “Certain Material Israeli Tax Considerations” beginning on page 269.

Anticipated Accounting Treatment

The Transactions are comprised of a series of transactions pursuant to the Merger Agreement, as described elsewhere in this proxy statement/prospectus. For accounting purposes, the Transactions will be effectuated by three main steps:

(1)    The exchange of shares held by Alpha Tau shareholders, which is accounted for as a recapitalization in accordance with GAAP.

(2)    The merger of HCCC with Merger Sub, which is not within the scope of ASC 805 (“Business Combinations”) because HCCC does not meet the definition of a business in accordance with ASC 805. Any difference between the fair value of Alpha Tau ordinary shares issued and the fair value of HCCC’s identifiable net assets should be recorded as additional paid-in capital. For purposes of the unaudited pro forma condensed combined financial information, it is assumed that the fair value of each Alpha Tau ordinary share issued to HCCC stockholders is equal to the fair value of each Alpha Tau ordinary share resulting from the $1 billion pro forma combined equity value assigned to the combined company in the Merger Agreement (assuming no redemptions).

(3)    The Subscription Agreements related to the PIPE, which were executed concurrently with the Merger Agreement, will result in the issuance of Alpha Tau ordinary shares, leading to an increase in share capital and share premium.

Comparison of Rights of Stockholders of HCCC and Shareholders of Alpha Tau (page 311)

If the Business Combination is successfully completed, holders of HCCC Common Stock will become holders of Alpha Tau ordinary shares and their rights as shareholders will be governed by Alpha Tau’s organizational documents. There are also differences between the laws governing HCCC, a Delaware corporation, and Alpha Tau, an Israeli company. Please see “Comparison of Rights of Alpha Tau Shareholders and HCCC Stockholders” on page 311 for more information.

Emerging Growth Company

Each of HCCC and Alpha Tau is, and, following the Business Combination, the combined company will be, an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, the combined company will be 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 their 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 the combined company’s securities less attractive as a result, there may be a less active trading market for the combined company’s securities and the prices of the combined company’s securities may be more volatile.


 

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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. The combined company has 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, the combined company, 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 the combined company’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

The combined company will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the date on which Alpha Tau ordinary shares were offered in exchange for HCCC Common Stock in connection with the Transactions, (b) in which the combined company has total annual gross revenue of at least $1.07 billion, or (c) in which the combined company is deemed to be a large accelerated filer, which means the market value of the combined company’s common equity that is held by non-affiliates exceeds $700 million as of the last business day of its most recently completed second fiscal quarter; and (ii) the date on which the combined company has issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

Regulatory Matters

The Business Combination is not subject to any federal or state regulatory requirement or approval, except for filings with the State of Delaware necessary to effectuate the Business Combination.

Summary Risk Factors

You should consider all the information contained in this proxy statement/prospectus in deciding how to vote for the proposals presented in this proxy statement/prospectus. In particular, you should consider the risk factors described under “Risk Factors” beginning on page 20. Such risks include, but are not limited to:

 

   

Alpha Tau has incurred significant losses since inception and have not generated any revenue to date. Alpha Tau expects to incur losses over the next several years and may not be able to achieve or sustain revenues or profitability in the future;

 

   

Even if the Transactions are consummated, Alpha Tau will need substantial additional funding, and if Alpha Tau is unable to raise capital when needed, Alpha Tau could be forced to delay, reduce or terminate the development of its Alpha DaRT technology or other product discovery and development programs or commercialization efforts;

 

   

Alpha Tau’s limited operating history may make it difficult for you to evaluate the success of Alpha Tau’s business to date and to assess its future viability;

 

   

Alpha Tau’s approach to the development of its proprietary Alpha DaRT technology represents a novel approach to radiation therapy, which creates significant and potentially unpredictable challenges for Alpha Tau;

 

   

The commercial success of Alpha Tau’s Alpha DaRT technology, if authorized for commercial sale or certified, will depend in part upon public perception of radiation therapies, and to a lesser extent, radiopharmaceuticals, and the degree of their market acceptance by physicians, patients, healthcare payors and others in the medical community;


 

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The ongoing COVID-19 pandemic could continue to adversely impact Alpha Tau’s business, including its clinical trials, supply chain and business development activities;

 

   

The market opportunities for Alpha Tau’s Alpha DaRT technology may be smaller than it anticipated or may be limited to those patients who are ineligible for or have failed prior treatments. If Alpha Tau encounters difficulties enrolling patients in its clinical trials, its clinical development activities could be delayed or otherwise adversely affected;

 

   

Alpha Tau currently has no commercial marketing and sales organization and has no experience in marketing products. If Alpha Tau is unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell its Alpha DaRT technology, if approved for commercial sale, Alpha Tau may not be able to generate product revenue;

 

   

Alpha Tau currently conducts and in the future intends to continue conducting pre-clinical studies, clinical trials for its Alpha DaRT technology outside the United States, and the FDA and similar foreign regulatory authorities may not accept data from such trials;

 

   

Alpha Tau’s Alpha DaRT technology and operations are subject to extensive government regulation and oversight both in the United States and abroad, and Alpha Tau’s failure to comply with applicable requirements could harm its business;

 

   

Alpha Tau may not receive, or may be delayed in receiving, the necessary marketing authorizations or certifications for its Alpha DaRT technology or any future products or product candidates, and failure to timely obtain necessary marketing authorizations or certifications for Alpha Tau’s product candidates would have a material adverse effect on Alpha Tau’s business;

 

   

If Alpha Tau does not obtain and maintain international regulatory registrations, marketing authorizations or certifications for any product candidates it develops, Alpha Tau will be unable to market and sell such product candidates outside of the United States;

 

   

If in the future Alpha DaRT is approved for commercial sale or certified, but Alpha Tau is unable to obtain adequate reimbursement or insurance coverage from third-party payors, it may not be able to generate significant revenue;

 

   

Alpha Tau may be unable to obtain a sufficient or sufficiently pure supply of radioisotopes to support clinical development or at commercial scale;

 

   

If Alpha Tau is unable to obtain and maintain patent or other intellectual property protection for its Alpha DaRT technology and for any other products or product candidates that Alpha Tau develops, or if the scope of the patent or other intellectual property protection obtained is not sufficiently broad, Alpha Tau’s competitors could develop and commercialize products and technology similar or identical to Alpha Tau, and Alpha Tau’s ability to commercialize any product candidates that it may develop, and its technology may be adversely affected;

 

   

Alpha Tau will incur increased costs as a result of operating as a public company, and its management will devote substantial time to new compliance initiatives;

 

   

If HCCC’s stockholders fail to properly demand redemption rights, they will not be entitled to convert their shares of Class A Stock into a pro rata portion of the Trust Account;

 

   

HCCC’s board of directors did not obtain a third-party fairness opinion in determining whether or not to proceed with the Business Combination;

 

   

HCCC’s current directors’ and executive officers’ affiliates own shares of HCCC Common Stock and private placement warrants that will be worthless if the Business Combination is not approved. Such interests may have influenced their decision to approve the Business Combination.


 

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The Alpha Tau securities to be received by HCCC’s securityholders as a result of the Business Combination will have different rights from HCCC securities;

 

   

HCCC’s stockholders will have a reduced ownership and voting interest after consummation of the Transactions and will exercise less influence over management; and

 

   

The other matters described in the section titled “Risk Factors” beginning on page 20.


 

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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following summary unaudited pro forma condensed combined financial information (the “Summary Pro Forma Information”) gives effect to the transactions contemplated by the Merger Agreement and related transactions. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Defined terms included below have the same meaning as terms defined and included elsewhere in this proxy statement/prospectus.

The Business Combination will be accounted for as a recapitalization in accordance with GAAP. Under this method of accounting, HCCC will be treated as the “accounting acquiree” and Alpha Tau as the “accounting acquirer” for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of Alpha Tau issuing shares for the net assets of HCCC, followed by a recapitalization. The net assets of HCCC will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of Alpha Tau. The summary unaudited pro forma condensed combined balance sheet as of June 30, 2021 gives effect to the Business Combination and related transactions as if they had occurred on June 30, 2021. The summary unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2021 and the year ended December 31, 2020 gives effect to the Business Combination and related transactions, and HCCC’s IPO as if they had occurred on January 1, 2020.

The Summary Pro Forma Information has been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed combined financial information included in the section titled “Unaudited Pro Forma Condensed Combined Financial Information” in this proxy statement/prospectus and the accompanying notes thereto. The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical financial statements and related notes of HCCC and Alpha Tau for the applicable periods included in this proxy statement/prospectus. The Summary Pro Forma Information has been presented for informational purposes only and is not necessarily indicative of what HCCC’s financial position or results of operations actually would have been had the Business Combination and related transactions been completed as of the dates indicated. In addition, the Summary Pro Forma Information does not purport to project the future financial position or operating results of HCCC following the recapitalization.

The following represents the aggregate merger consideration under the no redemption and maximum redemption scenarios:

 

     No Redemption      Maximum Redemption  
     Purchase
Price
     Shares
Issued
     Purchase
Price
     Shares
Issued
 

HCCC public stockholders and Sponsor shares (1)

   $ 10.00        33,343,750      $ 10.00        18,232,294  

 

(1)

Sponsor shares include Conditional Equity, and all Redemption Equity, which is forfeited in the maximum redemption scenario, both defined elsewhere in this proxy statement/prospectus.

As part of the recapitalization, the HCCC Sponsor will forfeit 15% of outstanding shares and warrants, and an identical number of RSUs and options are being granted to Alpha Tau employees, board members and service providers for purposes of retention, to be vested over 4 years from the Closing. Additionally, the HCCC Sponsor is subject to contingent forfeiture of 25% of shares and warrants based on the Aggregate Transaction Proceeds and contingent consideration of 20% of shares and warrants based on the future performance of the combined company.


 

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Upon the terms and subject to the conditions set forth in the Merger Agreement, at the Closing, Merger Sub, a wholly owned subsidiary of Alpha Tau will merge with and into HCCC, with HCCC surviving the merger (the “Merger”). As a result of the Merger, and upon consummation of the Business Combination and the other transactions contemplated by the Merger Agreement, HCCC will become a wholly owned subsidiary of Alpha Tau, with the securityholders of HCCC becoming securityholders of Alpha Tau. The Business Combination shall be consummated in accordance with the Merger Agreement. The pro forma adjustments giving effect to the Business Combination and related transactions are summarized below, and are discussed further in the footnotes to these unaudited pro forma condensed combined financial statements:

 

   

the merger of Merger Sub, a wholly-owned subsidiary of Alpha Tau, with and into HCCC, with HCCC surviving the merger as a wholly owned subsidiary of Alpha Tau;

 

   

the consummation of the HCCC IPO, which include the sale of Public Units and Private Placement Warrants (as defined elsewhere in this proxy statement/prospectus);

 

   

the consummation of the Business Combination;

 

   

the reclassification of the HCCC Class A Stock subject to possible redemption units sold into permanent equity; net of redemptions (see below);

 

   

the consummation of the PIPE Investment;

 

   

the conversion of the Alpha Tau preferred shares to permanent equity;

 

   

the accounting for transaction costs incurred by both HCCC and Alpha Tau; and

 

   

the issuance of equity awards to Alpha Tau employees, Board members and service providers.

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below with respect to the potential redemption into cash of HCCC’s Class A Stock:

 

   

Assuming No Redemptions: This scenario assumes that no public stockholders of HCCC exercise redemption rights with respect to their public shares for a pro rata share of the funds in HCCC’s trust account.

 

   

Assuming Maximum Redemptions: This scenario assumes that 13,392,706 of the public shares are redeemed for an aggregate payment of approximately $133.9 million (based on the estimated per share redemption price of approximately $10.00 per share based on HCCC’s trust account). Under the terms of the Merger Agreement, the consummation of the Business Combination is conditioned upon HCCC delivering to Alpha Tau evidence that, immediately prior to the Closing (and following any redemptions of public shares), HCCC will have net tangible assets of at least $5.0 million upon consummation of the Business Combination. Further, the Merger Agreement provides that Alpha Tau is not required to consummate the Transactions if immediately prior to the consummation of the Transactions, HCCC does not have at least $225.0 million of cash available from the Trust Account after payment of the deferred underwriting fees of HCCC plus the proceeds from the PIPE Investment (the “Aggregate Transaction Proceeds”). Additionally, the Redemption Equity is subject to forfeiture dependent on the Aggregate Transaction Proceeds. All Redemption Equity is forfeited in the maximum redemption scenario.


 

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The existing Alpha Tau stakeholders will hold 54,799,711 of the ordinary shares immediately after the Business Combination, which approximates a 56.3% ownership level assuming no redemptions and a 66.6% ownership level assuming maximum redemptions. The following summarizes the pro forma ordinary shares outstanding under the two scenarios (excluding the potential dilutive effect of Alpha Tau options, warrants and the Conditional Equity as further described in Note 4):

 

     No Redemption     Maximum Redemption  
     Ordinary Shares      %     Ordinary Shares      %  

Shareholders

          

Current Alpha Tau ordinary shareholders and preferred shareholders

     54,799,711        56.3     54,799,711        66.6

HCCC Sponsor shares (1)

     4,468,750        4.6     2,750,000        3.3

HCCC Sponsor Conditional Equity (2)

     1,375,000        1.4     1,375,000        1.7

HCCC public stockholders

     27,500,000        28.2     14,107,294        17.1

PIPE Investment

     9,263,006        9.5     9,263,006        11.3
  

 

 

    

 

 

   

 

 

    

 

 

 

Total Alpha Tau ordinary shares outstanding at closing of the Business Combination

     97,406,467        100.0     82,295,011        100.0

 

(1)

Sponsor shares including the Redemption Equity of 1,718,750 shares of Class B Stock subject to forfeiture dependent on the Aggregate Transaction Proceeds. All Redemption Equity is forfeited in the maximum redemption scenario.

(2)

HCCC Conditional Equity subject to market vesting conditions are vested upon the VWAP of Alpha Tau ordinary shares on Nasdaq exceeding $14.00 per share for 20 trading days within any 30-trading day period. The term ends three years after the Closing Date.

 

     Pro Forma Combined  

Summary Unaudited Pro Forma Condensed Combined

   (Assuming No
Redemptions)
    (Assuming
Maximum
Redemptions)
 

U.S. dollars in thousands (except share and per share data)

    

Statement of Operations Data

    

For the six months ended June 30, 2021

    

Net loss

   $ 14,958     $ 14,958  

Net loss per common share - ordinary share - basic and diluted

   $ (0.16   $ (0.18

Weighted-average common shares outstanding - ordinary share - basic and diluted

     96,305,911       81,194,455  

For the year ended December 31, 2020

    

Net loss

   $ 19,966     $ 20,690  

Net loss per common share - ordinary share - basic and diluted

   $ (0.21   $ (0.26

Weighted-average common shares outstanding - ordinary share - basic and diluted

     93,667,055       78,555,599  

Summary Unaudited Pro Forma Condensed Combined

    

Balance Sheet Data

    

As of June 30, 2021

    

Total assets

   $ 385,935     $ 252,008  

Total liabilities

   $ 35,162     $ 35,162  

Total shareholders’ equity

   $ 350,773     $ 216,846  

 

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COMPARATIVE PER SHARE DATA

The following tables present HCCC and Alpha Tau’s historical and pro forma per share data as of and for the six months ended June 30, 2021, and as of and for the year ended December 31, 2020. The pro forma net loss per common share data for the six months ended June 30, 2021 and for the year ended December 31, 2020 is presented as if the Business Combination had been completed on January 1, 2020. The pro forma book value per share information is presented as if the Business Combination had been completed on June 30, 2021. The information provided in the table below is unaudited.

The historical per share data of HCCC Common Stock was derived from the unaudited financial statements of HCCC as of and for the six months ended June 30, 2021 and from the audited financial statements of HCCC as of December 31, 2020 and for the period from August 18, 2020 (inception) through December 31, 2020, included elsewhere in this proxy statement/prospectus. The historical financial information of Alpha Tau was derived from the unaudited condensed consolidated financial statements of Alpha Tau as and for the six months ended June 30, 2021, and from the audited consolidated financial statements of Alpha Tau as of and for the years ended December 31, 2020 and 2019, included elsewhere in this proxy statement/prospectus. This information should be read together with HCCC’s and Alpha Tau’s audited financial statements and related notes, the section titled “Unaudited Pro Forma Condensed Combined Financial Information” and other financial information included elsewhere in this proxy statement/prospectus.

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below with respect to the potential redemption into cash of HCCC’s Class A Stock:

 

   

Assuming No Redemptions: This scenario assumes that no public stockholders of HCCC exercise redemption rights with respect to their public shares for a pro rata share of the funds in HCCC’s trust account.

 

   

Assuming Maximum Redemptions: This scenario assumes that 13,392,706 of the public shares are redeemed for an aggregate payment of approximately $133.9 million (based on the estimated per share redemption price of approximately $10.00 per share based on HCCC’s trust account). Under the terms of the Merger Agreement, the consummation of the Business Combination is conditioned upon HCCC delivering to Alpha Tau evidence that, immediately prior to the Closing (and following any redemptions of public shares), HCCC will have net tangible assets of at least $5.0 million upon consummation of the Business Combination. Further, the Merger Agreement provides that Alpha Tau is not required to consummate the Transactions if immediately prior to the consummation of the Transactions, HCCC does not have at least $225.0 million of cash available from the Trust Account after payment of the deferred underwriting fees of the SPAC plus the proceeds from the PIPE Investment (the “Aggregate Transaction Proceeds”). Additionally, the Redemption Equity is subject to forfeiture dependent on the Aggregate Transaction Proceeds. All Redemption Equity is forfeited in the maximum redemption scenario.


 

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The pro forma data is presented for illustrative purposes only and is not necessarily indicative of the results of operations or the financial condition that would have occurred if the Business Combination had been completed as of the dates described above.

 

     Historical     Pro Forma Combined     Alpha Tau Equivalent Pro
Forma Per Share Data (3)
 

As of and for the six months ended
June 30, 2021

   Alpha Tau
Medical
Ltd.
(Historical)
    Healthcare
Capital Corp.
(Historical)
    Assuming
No
Redemptions
    Assuming
Maximum
Redemptions
    Assuming
No
Redemptions
    Assuming
Maximum
Redemptions
 

Net loss per share - ordinary shares of Class A Stock - basic and diluted (2)

   $ (0.42   $ (0.00   $ (0.16 )   $ (0.18   $ (0.14 )   $ (0.17 )

Book value per ordinary share (1)

   $ (0.60   $ 0.51     $ 3.60     $ 2.63     $ 3.26     $ 2.39  

Weighted average shares outstanding, ordinary shares - basic and diluted

     44,751,270       25,379,500       96,305,911       81,194,455       N/A       N/A  

Net loss per share - Class B Stock - basic and diluted (4)

     N/A     $ 0.59       N/A       N/A       N/A       N/A  

Book value per share - Class B Stock (5)

     N/A     $ 0.51       N/A       N/A       N/A       N/A  

Weighted average shares outstanding, Class B Stock - basic and diluted

     N/A       8,664,505       N/A       N/A       N/A       N/A  
As of and for the year ended
December 31, 2020
                                    

Net loss per share - ordinary shares of Class A Stock - basic and diluted (2)

   $ (0.20     N/A     $ (0.21 )   $ (0.26   $ (0.19 )   $ (0.24

Weighted average shares outstanding, ordinary shares - basic and diluted

     44,488,335       N/A       93,667,055       78,555,599       N/A       N/A  

Net loss per share - Class B Stock - basic and diluted (4)

     N/A     $ (0.00     N/A       N/A       N/A       N/A  

Weighted average shares outstanding, Class B Stock - basic and diluted

     N/A       6,000,000       N/A       N/A       N/A       N/A  

 

(1)

Book value per share is computed as total shareholders’ equity divided by ordinary shares outstanding.

(2)

Net loss per ordinary share is based on the net loss and weighted average number of ordinary shares outstanding for the six months ended June 30, 2021, and for the year ended December 31, 2020

(3)

Equivalent net loss per common share – basic and diluted and equivalent book value per share information is computed by multiplying the combined pro forma per share data by the Split Factor of .905292 set forth in the Merger Agreement. The purpose of equivalent pro forma per share data is to equate the respect per share values to one share of Alpha Tau.

(4)

Book value per share is computed as total shareholders’ equity divided by common shares outstanding.

(5)

Net loss per common share is based on the net loss and weighted average number of common shares outstanding for the six months ended June 30, 2021, and for the year ended December 31, 2020


 

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RISK FACTORS

If the Business Combination is completed, the combined company will operate in a market environment that is difficult to predict and that involves significant risks, many of which will be beyond its control. You should carefully consider the risks described below before voting your shares. Additional risks and uncertainties not presently known to Alpha Tau and HCCC or that they do not currently believe are important to an investor, if they materialize, also may adversely affect the Business Combination. If any of the events, contingencies, circumstances or conditions described in the following risks actually occur, the combined company’s business, financial condition or results of operations could be seriously harmed. If that happens, the trading price of Alpha Tau’s ordinary shares or, if the Business Combination is not consummated, HCCC Common Stock could decline, and you may lose part or all of the value of any Alpha Tau ordinary shares or, if the Business Combination is not consummated, shares of HCCC Common Stock that you hold.

Risks Related to the Combined Company Following the Business Combination

Any of the following risk factors could cause the combined company’s actual results to differ materially from anticipated results. These risks and uncertainties are not the only ones that the combined company faces.

Risks Related to Alpha Tau’s Financial Condition and Capital Requirements

In this section “we,” “us” and “our” refer to Alpha Tau.

We have incurred significant losses since inception and have not generated any revenue to date. We expect to incur losses over the next several years and may not be able to achieve or sustain revenues or profitability in the future.

Investment in the medical device industry and product development is a highly speculative undertaking and entails substantial upfront capital expenditures and significant risk that our Alpha DaRT technology will fail to demonstrate adequate efficacy or an acceptable safety profile, gain marketing authorization in the United States and similar authorization or certification in various other jurisdictions worldwide and become commercially viable. We currently have no products authorized for commercial sale in the United States and have not generated any revenue to date, and we continue to incur significant research and development and other expenses related to our ongoing operations. To date, we have financed our operations primarily through private placements of our ordinary and preferred shares as well as through grants received from government authorities, primarily in Israel.

We have incurred significant net losses in each period since we commenced activity in 2016. For the years ended December 31, 2019 and 2020, we reported net losses of $8.4 million and $8.9 million, respectively and for the six months ended June 30, 2020 and June 30, 2021, we reported net losses of $4.0 million and $18.7 million, respectively. As of June 30, 2021, we had an accumulated deficit of $44.3 million. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase substantially if and as we:

 

   

continue our research and development efforts and submit applications seeking marketing authorizations in the United States or authorizations or certifications outside the United States for our Alpha DaRT technology;

 

   

conduct and expand the scope of our preclinical studies and clinical trials for our Alpha DaRT technology;

 

   

continue to develop manufacturing facilities for our Alpha DaRT technology;

 

   

seek to identify additional potential indications for our Alpha DaRT technology;

 

   

acquire or in-license other products or product candidates or technologies;

 

   

add operational, financial and management information systems and personnel, including personnel to help us comply with our obligations as a public company;

 

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hire and retain additional personnel, such as clinical, quality control, scientific, commercial and administrative personnel, including personnel to support the development and potential commercialization of our Alpha DaRT technology;

 

   

seek marketing authorizations or certifications for our Alpha DaRT technology or any other product candidates that successfully complete clinical trials;

 

   

establish a sales, marketing and distribution infrastructure and scale-up manufacturing capabilities, whether alone or with third parties, to commercialize our Alpha DaRT technology or other products or product candidates for which we may obtain marketing authorization in the United States or similar authorization or certification in other target jurisdictions, if any;

 

   

expand, maintain and protect our intellectual property portfolio; and

 

   

operate as a public company.

Because of the numerous risks and uncertainties associated with the medical device industry, we are unable to accurately predict the timing or amount of increased expenses we will incur or when, if ever, we will be able to achieve profitability. Even if we succeed in commercializing our Alpha DaRT technology in one indication, we will continue to incur substantial research and development and other expenditures to develop, seek marketing authorizations or certifications for, and potentially market our Alpha DaRT technology in other indications. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue. Our prior losses and expected future losses have had and will continue to have an adverse effect on our shareholders’ equity and working capital.

We have not generated any revenue to date and may never be profitable.

Our ability to become profitable depends upon our ability to generate revenue. To date, we have not generated any revenue. We do not expect to generate significant product revenue unless or until we successfully complete clinical development and obtain marketing authorization in the United States and similar authorization or certification in other target jurisdictions of, and then successfully commercialize, our Alpha DaRT technology for at least one indication. Our Alpha-DaRT technology is currently in clinical trials for a number of forms of cancer, including skin, oral, pancreatic and breast cancers, and preclinical studies for hepatic cell carcinoma, lung and prostate cancers, which will all require additional preclinical or clinical studies, clinical development and regulatory review and authorization or certification, substantial investment, access to sufficient commercial manufacturing capacity and significant commercialization and marketing efforts before we can generate any revenue from product sales.

We are conducting clinical trials in a number of forms of cancer and, as such, face significant development risks as our Alpha DaRT technology advances further through clinical development. Our ability to generate revenue depends on a number of factors, including, but not limited to:

 

   

timely completion of our current and future preclinical studies and clinical trials, which may be significantly slower or more costly than we currently anticipate and will depend substantially upon the performance of third-party contractors;

 

   

our ability to pre-clinical studies and successfully submit Investigational Device Exemptions, or IDEs, or comparable applications to allow us to initiate clinical trials for our Alpha DaRT technology or any future products or product candidates, including similar requirements as applicable in foreign jurisdictions;

 

   

being required by the U.S. Food and Drug Administration, or FDA, or similar foreign regulatory authorities or bodies to conduct additional clinical trials or other studies beyond those planned to support the potential marketing authorization or certification and commercialization of our Alpha DaRT technology or any future products or product candidates we develop or acquire;

 

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our ability to demonstrate to the satisfaction of the FDA or similar foreign regulatory authorities or other bodies the safety and efficacy, of our Alpha DaRT technology or any future products or product candidates, if required;

 

   

the prevalence, duration and severity of potential side effects or other safety issues experienced with our Alpha DaRT technology or future products or product candidates, if any;

 

   

the timely receipt of necessary marketing authorizations from the FDA or authorizations or certifications from similar foreign regulatory authorities or other bodies;

 

   

the willingness of physicians, operators of clinics and patients to utilize or adopt our Alpha DaRT technology or future products or product candidates as potential cancer treatments;

 

   

the availability of coverage and adequate reimbursement and pricing by third-party payors, including government authorities;

 

   

our ability, and the ability of third parties with whom we may choose to contract, to manufacture adequate clinical and commercial supplies of our product using Alpha DaRT technology or any future products or product candidates, remain in good standing with regulatory authorities and develop, validate and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices, or cGMP;

 

   

our ability to successfully develop a commercial strategy and thereafter commercialize our Alpha DaRT technology or any future products or product candidates in the United States and internationally, if licensed for marketing, reimbursement, sale and distribution in such countries and territories, whether alone or in collaboration with others; and

 

   

our ability to establish and enforce intellectual property rights in and to our Alpha DaRT technology or any future products or product candidates.

Many of the factors listed above are beyond our control, and could cause us to experience significant delays or prevent us from obtaining marketing authorizations or certifications or commercializing our Alpha DaRT technology. Even if we are able to commercialize our Alpha DaRT technology, we may not achieve profitability soon after generating product sales, if ever. If we are unable to generate sufficient revenue through the sale of our Alpha DaRT technology or any future products or product candidates, we may be unable to continue operations without continued funding.

Even if we consummate the Transactions, we will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or terminate the development of our Alpha DaRT technology or other product discovery and development programs or commercialization efforts.

Our operations have consumed substantial amounts of cash since inception. We expect to continue to spend substantial amounts to continue the clinical and preclinical development of our Alpha DaRT technology. We will need to raise additional capital to complete our currently ongoing planned clinical trials and any future clinical trials. Other unanticipated costs may arise in the course of our development efforts. If we are able to gain marketing authorization or certification for our Alpha DaRT technology or other future products or product candidates that we develop, we may require significant additional amounts of funding in order to launch and commercialize such our Alpha DaRT technology or products or product candidates. We cannot reasonably estimate the actual amounts necessary to successfully complete the development of and commercialize our Alpha DaRT technology and we may need substantial additional funding after consummation of this transaction to complete the development and commercialization of our Alpha DaRT technology.

Our future need for additional funding depends on many factors, including:

 

   

the scope, progress, results and costs of researching and developing our Alpha DaRT technology, as well as other additional products or product candidates we may develop and pursue in the future;

 

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the timing of, and the costs involved in, obtaining marketing authorizations or certifications for our Alpha DaRT technology and any other additional products or product candidates we may develop and pursue in the future;

 

   

subject to receipt of marketing authorizations or certifications, the costs of commercialization activities for our Alpha DaRT technology or future products or product candidates, to the extent such costs are not the responsibility of any future collaborators, including the costs and timing of establishing product sales, marketing and distribution;

 

   

the timing of and costs involved in expanding our manufacturing capabilities as we roll out our Alpha DaRT technology, and any other additional products or product candidates which we may develop, in order to establish necessary infrastructure;

 

   

subject to receipt of marketing authorization or certification, revenue, if any, received from commercial sales of our Alpha DaRT technology or any other additional products or product candidates we may develop and pursue in the future;

 

   

the extent to which we in-license or acquire rights to other products, product candidates or technologies;

 

   

our ability to establish collaboration arrangements for the development of our Alpha DaRT technology or other future products or product candidates on favorable terms, if at all;

 

   

our headcount growth and associated costs as we expand our research and development and manufacturing and establish a commercial infrastructure;

 

   

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

 

   

the costs of operating as a public company.

We cannot be certain that additional funding will be available on acceptable terms, or at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, reduce or terminate the development of our Alpha DaRT technology or plans for commercialization.

We believe that the net proceeds from the Transactions, together with our existing cash and cash equivalents, will enable us to fund its operating expenses and capital expenditure requirements into 2024. Our estimates may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

We are a clinical-stage medical device oncology therapy company with a limited operating history. We commenced operations in 2016, and our operations to date have been limited to organizing and staffing our company, business planning, raising capital, conducting research activities, filing patent applications, developing our Alpha DaRT technology, identifying target indications, initiating and conducting our clinical trials, undertaking preclinical studies and establishing manufacturing infrastructure and capacity to produce our Alpha DaRT technology. We have not yet demonstrated our ability to successfully initiate a pivotal trial in the United States, obtain marketing authorizations (other than in Israel) or similar authorizations or certifications in other foreign jurisdictions, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, or conduct sales, marketing and distribution activities necessary for successful product commercialization. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history.

 

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In addition, as a young business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. We will need to transition at some point from a company with a research and development focus to a company capable of supporting commercial activities. We may not be successful in such a transition.

We may be exposed to financial risk related to the fluctuation of foreign exchange rates and the degrees of volatility of those rates.

We may be adversely affected by foreign currency fluctuations. Our reporting currency and the functional currency of our operating companies is the US Dollar. To date, we have been primarily funded through issuances of equity that have been denominated in U.S. Dollar. However, a meaningful portion of our expenditures are paid in New Israeli Shekel, particularly with respect to our employees, and we are therefore subject to foreign currency fluctuations that may, from time to time, impact our financial position and results of operations.

Risks Related to Alpha Tau’s Business and the Alpha DaRT Technology

In this section “we,” “us” and “our” refer to Alpha Tau.

Our approach to the development of our proprietary Alpha DaRT technology represents a novel approach to radiation therapy, which creates significant and potentially unpredictable challenges for us.

Our future success depends on the successful development of our Alpha DaRT technology, which is designed to treat solid tumors through alpha-irradiation by intratumoral insertion of radium-224 impregnated sources, representing what we believe to be a novel approach to local radiotherapy. Alpha-emitting isotope oncology therapy is relatively new, and only one alpha-emitting isotope therapy has been approved in the United States or the European Union and only a limited number of clinical trials of products based on alpha-emitting isotope therapies have commenced. In addition, the majority of the clinical trials evaluating alpha-emitting isotope oncology therapy have focused on systemic delivery of drugs like radiopharmaceuticals (including Xofigo or certain antibody-radionuclide conjugates), while our Alpha DaRT technology is designed to be a local therapy. As such, it is difficult to accurately predict the developmental challenges we may incur for our Alpha DaRT technology as it proceeds through preclinical studies and clinical trials. In addition, beyond the limited universe of patients treated with Xofigo, the sole alpha-emitting isotope therapy approved in the United States or the European Union, as well as other uses of alpha-emitting isotope therapy outside of oncology, such as in the use in treating ankylosing spondylitis, assessments of the long-term safety of targeted alpha-emitting isotope therapies in humans have been limited, and there may be long-term effects from treatment with our Alpha DaRT technology or any future products or product candidates we develop that we cannot predict at this time. It is difficult for us to predict the time and cost of the regulatory development of our Alpha DaRT technology, and we cannot predict whether the application of our technology, or any similar or competitive technologies, will result in the identification, development, and marketing authorization or certification of any products. There can be no assurance that any development problems we experience in the future related to our technology or any of our research programs will not cause significant delays or unanticipated costs, or that such development problems can be solved at all. Any of these factors may prevent us from completing our preclinical studies and clinical trials that we may initiate or commercializing any product candidates we may develop on a timely or profitable basis, if at all. In addition, the success of our Alpha DaRT technology will depend on several factors, including the following:

 

   

establishing manufacturing capabilities and infrastructure to produce and distribute adequate supply of Alpha DaRT sources in compliance with applicable regulations governing the transport of radiological materials;

 

   

generating meaningful clinical data to support widespread clinical adoption and reimbursement for the Alpha DaRT technology;

 

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educating medical personnel regarding the potential benefits and correct use of our Alpha DaRT technology;

 

   

ensuring appropriate methods of handling and logistics of our products and appropriate capabilities at clinical use points;

 

   

facilitating patient access to the facilities able to administer our Alpha DaRT technology, if authorized for sale or certified;

 

   

establishing sales and marketing capabilities upon obtaining any marketing authorization in the United States and similar authorization or certification in other target jurisdictions to gain market acceptance of a novel therapy; and

 

   

sourcing clinical and, if successfully authorized or certified for commercial sale, commercial supplies for the materials used to manufacture our Alpha DaRT technology, and especially our Alpha DaRT sources.

The commercial success of our Alpha DaRT technology, if authorized for commercial sale or certified, will depend in part upon public perception of radiation therapies, and to a lesser extent, radiopharmaceuticals, and the degree of their market acceptance by physicians, patients, healthcare payors and others in the medical community.

Adverse events in clinical trials of our Alpha DaRT technology or in clinical trials of others developing similar products and the resulting negative publicity, as well as any other adverse events in the field of radiation therapies or radiopharmaceuticals that may occur in the future, could result in a decrease in demand for our Alpha DaRT technology or any future products or any product candidates that we may develop that rely on radiation therapy. If public perception is influenced by claims that radiation therapies or radiopharmaceuticals or specific therapies within radiation therapies or radiopharmaceuticals are unsafe or if alternative therapies for cancer treatment are developed and proven to be more successful or provide an actual or perceived, preferred course of treatment for cancer(s), our Alpha DaRT technology or any future products or any product candidates we may develop may not be accepted by the general public or the medical community.

In particular, the future commercial success of our Alpha DaRT technology or any future products or any product candidates we may develop, as applicable, depends and will depend upon, among other things, these products and product candidates gaining and maintaining acceptance by physicians, patients, third-party payors and other members of the medical community as efficacious and cost-effective alternatives to competing products and treatments. If any of our products or product candidates do not achieve and maintain an adequate level of acceptance, we may not generate material sales of that product or product candidate or be able to successfully commercialize it. The degree of market acceptance of our products and product candidates, if authorized for sale or certified, will depend on a number of factors, including:

 

   

our ability to provide acceptable evidence of safety and efficacy;

 

   

the prevalence and severity of any side effects;

 

   

publicity concerning our products and product candidates or competing products and treatments;

 

   

availability, relative cost and relative efficacy of alternative and competing treatments;

 

   

the ability to offer our products for sale at competitive prices;

 

   

the relative convenience and ease of administration of our products and product candidates;

 

   

the willingness of the target patient population to try new products and product candidates and of physicians to prescribe these products and product candidates;

 

   

the strength of marketing and distribution support; and

 

   

the sufficiency of coverage or reimbursement by third parties.

 

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If our Alpha DaRT technology or any of our other future products or product candidates, if authorized or certified, do not become widely accepted by potential customers, physicians, patients, third-party payors and other members of the medical community, such a lack of acceptance could have a material adverse effect on our business, financial condition and results of operations.

We are exploring development of our Alpha DaRT technology in combination with other therapies, which exposes us to additional risks.

We are planning to conduct a combination trial evaluating our Alpha DaRT technology in combination with pembrolizumab for the treatment of locally advanced or metastatic head and neck squamous cell carcinoma, and in the future we may explore conduct additional combination trials with one or more currently approved or experimental cancer therapies for this or other indications. Even if our Alpha DaRT technology receives marketing authorization or obtains certification for use in combination with other existing therapies, we would continue to be subject to the risks that the FDA or similar foreign regulatory authorities could revoke marketing authorization of the therapy used in combination with our Alpha DaRT technology or that safety, efficacy, manufacturing or supply issues could arise with these other therapies. Combination therapies are commonly used for the treatment of cancer, and we would be subject to similar risks if we develop any of our products or product candidates for use in combination with other drugs or for indications other than cancer. This could result in our own products being removed from the market or being less successful commercially.

We may also evaluate our Alpha DaRT technology in combination with one or more other cancer therapies that have not yet been approved for marketing by the FDA or similar foreign regulatory authorities. We will not be able to market and sell our product candidate we develop in combination with any such unapproved cancer therapies that do not ultimately obtain marketing authorization.

If the FDA or similar foreign regulatory authorities do not approve these other drugs or revoke their marketing authorization, or if safety, efficacy, manufacturing, or supply issues arise with, the drugs we choose to evaluate in combination with our product candidate, we may be unable to obtain marketing authorization or certification of or market our product candidate.

The ongoing COVID-19 pandemic could continue to adversely impact our business, including our clinical trials, supply chain and business development activities.

In connection with the ongoing COVID-19 pandemic, governments have implemented significant measures, including closures of businesses, quarantines, travel restrictions and other social distancing directives, intended to control the spread of the virus. Companies have also taken precautions, such as requiring employees to work remotely, imposing travel restrictions and temporarily closing businesses. In response to these public health directives and orders, we have implemented certain travel restrictions and work-from-home policies for our employees, and as a result we have experienced limitations on employee resources. The effects of government actions and our own policies and those of third parties to reduce the spread of COVID-19 may negatively impact productivity and slow down or delay our ongoing and future clinical trials, preclinical studies and research and development activities, may cause disruptions to our supply chain, to the administrative functions of clinical trial sites and/or to the operations of our other partners, and as a result may impair our ability to execute our programs and/or business development strategy. In the event that government authorities were to enhance current restrictions, our employees who currently are not telecommuting may no longer be able to access our facilities, including our laboratories and our operations may be further limited or curtailed.

Our clinical trials have been, and may in the future be, affected by the ongoing COVID-19 pandemic. In particular, certain of our clinical trial sites, most notably Memorial Sloan Kettering Cancer Center in New York, and Centre hospitalier de l’Université de Montréal in Montreal, have both seen significantly decreased clinical trial recruitment in general due to the devastating local impact of COVID-19, and therefore have not yet recruited

 

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any patients in to our clinical trials in these cities. However, in July 2021, the first participant in our U.S. pilot trial for skin cancer was treated with Alpha DaRT at University Cancer Center in Houston, Texas. We may experience other disruptions due to the ongoing COVID-19 pandemic that could severely impact our business, preclinical studies and clinical trials, including:

 

   

delays or difficulties in enrolling and maintaining patients in our clinical trials;

 

   

delays or difficulties in shipping and delivering in a timely manner supplies, samples or products required for our clinical trials due to the impact of the ongoing COVID-19 pandemic on the United States Postal Service, FedEx, United Parcel Service and/or other commercial shipping organizations;

 

   

delays or difficulties in clinical site initiation, including difficulties completing any required contracts, successfully completing institutional review board, or IRB, or other reviewing body reviews in a timely manner, or in recruiting clinical site investigators and clinical site staff;

 

   

disruptions in our supply chain that result in shortages of materials to conduct our laboratory experiments and/or clinical trials;

 

   

changes in local regulations as part of a response to the ongoing COVID-19 outbreak which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or cause us to discontinue such clinical trials altogether;

 

   

diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials, which may also increase the cost of the limited available remaining resources available for use in our clinical trials;

 

   

difficulties in recruiting and retaining principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19;

 

   

interruption of key clinical trial activities, such as clinical trial site monitoring, manufacturing and equipment maintenance due to limitations on travel or access imposed or recommended by federal, state or foreign governments, hospitals, employers and others, or interruption of clinical trial subject visits and study procedures;

 

   

interruption or delays in the operations of the FDA or other regulatory authorities or bodies, which may impact review timelines;

 

   

risk that participants enrolled in our clinical trials will contract COVID-19 while the clinical trial is ongoing, which could result in serious adverse events, potentially including patient deaths, and impact the results of the clinical trial, including by increasing the number of observed adverse events; and

 

   

refusal of the FDA or similar foreign authorities or bodies to accept data from clinical trials in affected geographies.

These and other disruptions in our operations and the global economy could negatively impact our business, operating results and financial condition.

The spread of COVID-19 and actions taken to reduce its spread may also materially affect us economically. While the potential economic impact brought by, and the duration of, the ongoing COVID-19 pandemic may be difficult to assess or predict, there have recently been, and could in the future be, significant disruptions of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity

 

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and financial position. In addition, the trading prices for other medical device and other biopharmaceutical companies have been highly volatile as a result of the ongoing COVID-19 pandemic. As a result, we may face difficulties raising capital or such capital raises may be on unfavorable terms.

COVID-19 and actions taken to reduce its spread continue to rapidly evolve. The extent to which COVID-19 may impede the development of our product Alpha DaRT technology or any future products or product candidates, reduce the productivity of our employees, disrupt our supply chains, delay our clinical trials, reduce our access to capital or limit our business development activities, will depend on future developments, which are highly uncertain and cannot be predicted with confidence. To the extent the ongoing COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those relating to the timing and results of our clinical trials and our financing needs.

The market opportunities for our Alpha DaRT technology may be smaller than we anticipated or may be limited to those patients who are ineligible for or have failed prior treatments. If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

Our current and future target patient populations are based on our beliefs and estimates regarding the incidence or prevalence of certain types of cancers that may be addressable by our Alpha DaRT technology or any future products or product candidates we develop, which is derived from a variety of sources, including scientific literature, publications by medical societies and non-profit organizations, and surveys of clinics. Our projections may prove to be incorrect and the number of potential patients may turn out to be lower than expected. Even if we obtain significant market share for our Alpha DaRT technology, because the potential target populations could be small, we may never achieve profitability without obtaining marketing authorizations for additional indications in the United States or similar authorizations or certifications in other target jurisdictions, including use of our Alpha DaRT technology for front-line and second-line therapy.

We currently have no commercial marketing and sales organization and have no experience in marketing products. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our Alpha DaRT technology, if approved for commercial sale, we may not be able to generate product revenue.

We currently have no in-house sales or distribution capabilities and have no experience in marketing products. We intend to develop an in-house marketing organization and sales force, which will require significant capital expenditures, management resources and time. We will have to compete with other pharmaceutical, medical device and biotechnology companies to recruit, hire, train and retain marketing and sales personnel.

If we are unable or decide not to establish internal sales and marketing capabilities, we will pursue collaborative arrangements regarding the sales and marketing of our products, if licensed, as we have done in Canada and Israel. However, there can be no assurance that we will be able to establish or maintain such collaborative arrangements, or if we are able to do so, that they will have effective sales forces. Any revenue we receive will depend upon the efforts of such third parties, which may not be successful. We may have little or no control over the marketing and sales efforts of such third parties and our revenue from product sales may be lower than if we had commercialized our Alpha DaRT technology ourselves. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our Alpha DaRT technology.

There can be no assurance that we will be able to develop in-house sales and distribution capabilities or establish or maintain relationships with third-party collaborators to commercialize any product in the United States or overseas for which we are able to obtain marketing authorization or certification.

 

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We may expend our resources to pursue a particular indication and forgo the opportunity to capitalize on Alpha DaRT technology in indications that may ultimately be more profitable or for which there is a greater likelihood of success.

We have limited financial and personnel resources and are placing significant focus on the development of our Alpha DaRT technology in certain indications, and as such, we may forgo or delay pursuit of opportunities with other future products or product candidates or other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and other future products or product candidates for specific indications may not yield any commercially viable future products or product candidates. If we do not accurately evaluate the commercial potential or target market for a particular future product candidate, we may relinquish valuable rights to those future products or product candidates through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such future products or product candidates.

We currently conduct and in the future intend to continue conducting pre-clinical studies, clinical trials for our Alpha DaRT technology outside the United States, and the FDA and similar foreign regulatory authorities may not accept data from such trials.

We are currently conducting clinical trials in Israel, Canada, the United States, Japan and Europe and may in the future choose to conduct additional clinical trials, including in Asia, Australia, elsewhere in Europe or other foreign jurisdictions. The acceptance of trial data from clinical trials conducted outside the United States by the FDA may be subject to certain conditions. For example, in cases where data from clinical trials conducted outside the United States are intended to serve as the sole basis for marketing authorization in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless such clinical trials were conducted in accordance with good clinical practices, or GCP, and (i) the data are applicable to the United States population and United States medical practice; (ii) the trials were performed by clinical investigators of recognized competence; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA or, if the FDA considers such an inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. Many foreign regulatory bodies have similar requirements. In addition, such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the FDA or any similar foreign regulatory authority will accept data from trials conducted outside of the United States or the applicable jurisdiction. If the FDA or any similar foreign regulatory authority or other bodies does not accept such data, it would result in the need for additional trials, which would be costly and time-consuming and delay aspects of our business plan, and which may result in our Alpha DaRT not receiving approval, clearance or certification for commercialization in the applicable jurisdiction.

Risks Related to Government Regulation

In this section “we,” “us” and “our” refer to Alpha Tau.

Our Alpha DaRT technology and operations are subject to extensive government regulation and oversight both in the United States and abroad, and our failure to comply with applicable requirements could harm our business.

Any products or product candidates which ultimately integrate our Alpha DaRT technology are expected to be regulated as medical devices in the United States. Medical devices and their manufacturers and product developers are subject to extensive regulation in the United States and elsewhere, including by the FDA and its foreign counterparts. The FDA and foreign regulatory agencies regulate, among other things, with respect to medical devices: design, development and manufacturing; testing, labeling, content and language of instructions

 

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for use and storage; clinical trials; product safety; establishment registration and device listing; marketing, sales and distribution; premarket clearance, classification and approval; recordkeeping procedures; advertising and promotion; recalls and field safety corrective actions; postmarket surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury; post-market studies; and product import and export.

The regulations to which we are subject are complex, burdensome to understand and apply and have tended to become more stringent over time. Regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated sales, if our product candidate receives marketing authorization or certification. The FDA enforces its regulatory requirements through, among other means, periodic unannounced inspections. We do not know whether we or any contract manufacturers we may utilize will be found compliant in connection with any future FDA or foreign inspections. Failure to comply with applicable regulations could jeopardize our ability to sell our Alpha DaRT technology or any future products or product candidates, if they obtain marketing authorization or certification, and result in enforcement actions such as: warning letters; fines; injunctions; civil penalties; termination of distribution; recalls or seizures of products; delays in the introduction of products into the market; total or partial suspension of production; refusal to grant future clearances, approvals or certifications; withdrawals or suspensions of clearances, approvals or certifications, resulting in prohibitions on sales of our products; and in the most serious cases, criminal penalties.

We may not receive, or may be delayed in receiving, the necessary marketing authorizations or certifications for our Alpha DaRT technology or any future products or product candidates, and failure to timely obtain necessary marketing authorizations or certifications for our product candidates would have a material adverse effect on our business.

In the United States, before we can market a new medical device, or a new use of, or other significant modification to an existing, marketed medical device, we must first receive either clearance under Section 510(k) of the Federal Food, Drug, and Cosmetic Act, or the FDCA, approval of a premarket approval application, or PMA, or grant of a de novo classification request from the FDA, unless an exemption applies. In the 510(k) clearance process, before a device may be marketed, the FDA must determine that a proposed device is “substantially equivalent” to a legally-marketed “predicate” device, which includes a device that has been previously cleared through the 510(k) process, a device that was legally marketed prior to May 28, 1976 (pre-amendments device), a device that was originally on the U.S. market pursuant to an approved PMA and later down-classified, or a 510(k)-exempt device. To be “substantially equivalent,” the proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as the predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than the predicate device. Clinical data are sometimes required to support substantial equivalence. In the process of obtaining PMA approval, the FDA must determine that a proposed device is safe and effective for its intended use based, in part, on extensive data, including, but not limited to, technical, pre-clinical, clinical trial, manufacturing and labeling data. The PMA process is typically required for devices that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices. In the de novo classification process, a manufacturer whose novel device under the FDCA would otherwise be automatically classified as Class III and require the submission and approval of a PMA prior to marketing is able to request down-classification of the device to Class I or Class II on the basis that the device presents a low or moderate risk. If the FDA grants the de novo classification request, the applicant will receive authorization to market the device. This device type may be used subsequently as a predicate device for future 510(k) submissions.

The PMA approval, 510(k) clearance and de novo classification processes can be expensive, lengthy and uncertain. The FDA’s 510(k) clearance process usually takes from three to 12 months, but can take longer. The process of obtaining a PMA is much more costly and uncertain than the 510(k) clearance process and generally takes from one to three years, or even longer, from the time the application is submitted to the FDA. In addition, a PMA generally requires the performance of one or more clinical trials. Clinical data may also be required in

 

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connection with an application for 510(k) clearance or a de novo request. Despite the time, effort and cost, a device may not obtain marketing authorization by the FDA. Any delay or failure to obtain necessary regulatory marketing authorizations could harm our business. Furthermore, even if we are granted such marketing authorizations, they may include significant limitations on the indicated uses for the device, which may limit the potential commercial market for the device.

To date, we have not obtained authorization from the FDA to market any product candidate in the United States, and we expect to pursue the de novo classification process for our Alpha DaRT technology. If the FDA requires us to go through a lengthier, more rigorous examination for our products than we had expected, our product introductions or modifications could be delayed or prevented, which would have a material impact on our business and prospects. For example, if the FDA disagrees with our determination that the de novo classification pathway is the appropriate path to obtain marketing authorization for Alpha DaRT, the FDA may require us to submit a PMA application, which is generally more costly, time-consuming, and uncertain.

In the United States, any modification to a product candidate for which we receive marketing authorization may require us to submit a new 510(k) premarket notification and obtain clearance, to submit a PMA and obtain FDA approval, or to submit a de novo request prior to implementing the change. For example, any modification to a 510(k)-cleared device that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, design or manufacture, generally requires a new 510(k) clearance or other marketing authorization. The FDA requires every manufacturer to make such determinations in the first instance, but the FDA may review any manufacturer’s decision. The FDA may not agree with a manufacturer’s decisions regarding whether new clearances or approvals are necessary. If we obtain marketing authorizations from the FDA, we may make modifications or add additional features in the future that we believe do not require a new 510(k) clearance, de novo request or approval of a PMA. If the FDA disagrees with our determination and requires us to seek new marketing authorizations for the modifications for which we have concluded that new marketing authorizations are unnecessary, we may be required to cease marketing or to recall the modified product until we obtain such marketing authorization, and we may be subject to significant regulatory fines or penalties. If the FDA requires us to go through a lengthier, more rigorous examination for future products or modifications to existing products than we had expected, product introductions or modifications could be delayed or canceled, which could adversely affect our business.

The FDA, applicable foreign regulatory entity or notified body can delay, limit or deny marketing authorization or certification of a device for many reasons, including:

 

   

our inability to demonstrate to the satisfaction of the FDA or the applicable regulatory entity or notified body that our products are substantially equivalent to a predicate device or are safe and effective for their intended uses;

 

   

the disagreement of the FDA or the applicable foreign regulatory body with the design or implementation of our clinical trials or the interpretation of data from preclinical studies or clinical trials;

 

   

serious and unexpected adverse device effects experienced by participants in our clinical trials;

 

   

the data from our preclinical studies and clinical trials may be insufficient to support clearance, de novo classification, approval or certification, where required;

 

   

our inability to demonstrate that the clinical and other benefits of the device outweigh the risks;

 

   

the manufacturing process or facilities we use may not meet applicable requirements; and

 

   

the potential for marketing authorization or certification policies or regulations of the FDA or applicable foreign regulatory bodies to change significantly in a manner rendering our clinical data or regulatory filings insufficient for marketing authorization or certification.

In order to sell our products in member states of the European Union, or the EU, our products must comply with the general safety and performance requirements of the EU Medical Devices Regulation (Regulation (EU)

 

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No 2017/745), which repeals and replaces the EU Medical Devices Directive (Council Directive 93/42/EEC) and the Active Implantable Medical Devices Directive (Council Directive 90/385/EEC). Compliance with these requirements is a prerequisite to be able to affix the European Conformity, or CE, mark to our products, without which they cannot be sold or marketed in the EU. All medical devices placed on the market in the EU must meet the general safety and performance requirements laid down in Annex I to the EU Medical Devices Regulation including the requirement that a medical device must be designed and manufactured in such a way that, during normal conditions of use, it is suitable for its intended purpose. Medical devices must be safe and effective and must not compromise the clinical condition or safety of patients, or the safety and health of users and – where applicable – other persons, provided that any risks which may be associated with their use constitute acceptable risks when weighed against the benefits to the patient and are compatible with a high level of protection of health and safety, taking into account the generally acknowledged state of the art. The European Commission has adopted various standards applicable to medical devices. These include standards governing common requirements, such as sterilization and safety of medical electrical equipment and product standards for certain types of medical devices. There are also harmonized standards relating to design and manufacture. While not mandatory, compliance with these standards is viewed as the easiest way to satisfy the general safety and performance requirements as a practical matter, as it creates a rebuttable presumption that the device satisfies the general safety and performance requirements.

To demonstrate compliance with the general safety and performance requirements we must undergo a conformity assessment procedure, which varies according to the type of medical device and its (risk) classification. As a general rule, demonstration of conformity of medical devices and their manufacturers with the general safety and performance requirements must be based, among other things, on the evaluation of clinical data supporting the safety and performance of the products during normal conditions of use. Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions of use, that the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the performance and safety of the device are supported by suitable evidence. Except for low-risk medical devices (Class I), where the manufacturer can issue an EC Declaration of Conformity based on a self-assessment of the conformity of its products with the general safety and performance requirements (except for any parts which relate to sterility, metrology or reuse aspects), a conformity assessment procedure requires the intervention of an organization accredited or designated by a member state of the EU to conduct conformity assessments, or a notified body. Depending on the relevant conformity assessment procedure, the notified body would typically audit and examine the technical file and the quality system for the manufacture, design and final inspection of our devices. If satisfied that the relevant product conforms to the relevant essential requirements, the notified body issues a certificate of conformity, which the manufacturer uses as a basis for its own declaration of conformity. The manufacturer may then apply the CE Mark to the device, which allows the device to be placed on the market throughout the EU. If we fail to comply with applicable EU laws and regulations, and corresponding EU member state laws, we would be unable to affix the CE mark to our products, which would prevent us from selling them within the EU.

The aforementioned EU rules are generally applicable in the European Economic Area, or EEA, which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland. Non-compliance with the above requirements would also prevent us from selling our products in these three countries.

From January 1, 2021 onwards, the Medicines and Healthcare Products Regulatory Agency, or MHRA becomes the sovereign regulatory authority responsible for Great Britain (i.e. England, Wales and Scotland) medical device market according to the requirements provided in the Medical Devices Regulations 2002 (SI 2002 No 618, as amended) that sought to give effect to the three pre-existing EU directives governing active implantable medical devices, general medical devices and in vitro diagnostic medical devices whereas Northern Ireland continues to be governed by EU rules according to the Northern Ireland Protocol. Following the end of the Brexit transitional period on January 1, 2021, new regulations require medical devices to be registered with the MHRA (but manufacturers will be given a grace period of four to 12 months to comply with the new

 

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registration process) before being placed on Great Britain market. The MHRA will only register devices where the manufacturer or their United Kingdom Responsible Person has a registered place of business in the United Kingdom. Manufacturers based outside the United Kingdom will need to appoint a U.K. Responsible Person that has a registered place of business in the United Kingdom to register devices with the MHRA in line with the grace periods. By July 1, 2023, in Great Britain, all medical devices will require a UKCA (UK Conformity Assessed) mark but CE marks issued by EU notified bodies will remain valid until this time. Manufacturers may choose to use the UKCA mark on a voluntary basis until June 30, 2023. However, UKCA marking will not be recognized in the EU. The rules for placing medical devices on the market in Northern Ireland, which is part of the United Kingdom, differ from those in the rest of the United Kingdom. Compliance with this legislation is a prerequisite to be able to affix the UKCA mark to our products, without which they cannot be sold or marketed in Great Britain. Under the terms of the Northern Ireland Protocol, Northern Ireland will follow EU rules on medical devices and devices marketed in Northern Ireland will require assessment according to the EU regulatory regime. Such assessment may be conducted by an EU notified body, in which case a CE mark will be required before placing the device on the market in the EU or Northern Ireland. Alternatively, if a UK notified body conducts such assessment, a ‘UKNI’ mark will be applied and the device may only be placed on the market in Northern Ireland and not the EU.

The clinical trial process is lengthy and expensive with uncertain outcomes. Results of earlier studies may not be predictive of future clinical trial results.

Clinical testing is difficult to design and implement, can take many years, can be expensive and carries uncertain outcomes. The results of preclinical studies and clinical trials of our products conducted to date and ongoing or future studies and trials of our current, planned or future products may not be predictive of the results of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. The data and results from our clinical trials do not ensure that we will achieve similar results in future clinical trials. In addition, preclinical and clinical data are often susceptible to various interpretations and analyses, and many companies that have believed their products performed satisfactorily in preclinical studies and earlier clinical trials have nonetheless failed to replicate results in later clinical trials, or have viewed such data in different ways than regulators do. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy despite having progressed through nonclinical studies and earlier clinical trials. Failure can occur at any stage of clinical testing. Our clinical studies or investigations may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical and nonclinical testing in addition to those we have planned.

The initiation and completion of clinical studies may be prevented, delayed, or halted for numerous reasons. We may experience delays in our clinical trials for a number of reasons, which could adversely affect the costs, timing or successful completion of our clinical trials, including related to the following:

 

   

we may be required to submit an IDE to the FDA, which must become effective prior to commencing certain human clinical trials of medical devices, and the FDA may reject our IDE application and notify us that we may not begin clinical trials, or place restrictions on the conduct of such trials; similar requirements may apply in foreign jurisdictions;

 

   

regulators and other comparable foreign regulatory authorities may disagree as to the design or implementation of our clinical trials;

 

   

regulators and/or IRBs, or other bodies may not authorize us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site;

 

   

we may not reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

 

   

clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;

 

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the number of subjects or patients required for clinical trials may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate (including as a result of delays in enrollment caused or resulting from the ongoing COVID-19 pandemic), and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate;

 

   

our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

 

   

we might have to suspend or terminate clinical trials for various reasons, including occurrence of adverse events or other findings that the subjects in our clinical trials are being exposed to unacceptable health risks;

 

   

we may have to amend clinical trial protocols or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to submit to an IRB, or other bodies and/or regulatory authorities for re-examination;

 

   

regulators, IRBs, other bodies or other parties may require or recommend that we or our investigators suspend or terminate clinical research for various reasons, including safety signals or noncompliance with regulatory requirements;

 

   

the cost of clinical trials may be greater than we anticipate;

 

   

clinical sites may not adhere to the clinical protocol or may drop out of a clinical trial;

 

   

we may be unable to recruit a sufficient number of clinical trial sites;

 

   

regulators, IRBs, or other bodies may fail to approve or subsequently find fault with our manufacturing processes or facilities of third-party manufacturers with which we enter into agreement for clinical and commercial supplies, the supply of devices or other materials necessary to conduct clinical trials may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply;

 

   

marketing authorization or certification policies or regulations of FDA or applicable foreign regulatory authorities may change in a manner rendering our clinical data insufficient for marketing authorization or certification; and

 

   

our current or future products may have undesirable side effects or other unexpected characteristics.

Any of these occurrences may significantly harm our business, financial condition and prospects. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketing authorization or similar certification of any product candidate.

Patient enrollment in clinical trials and completion of patient follow-up depend on many factors, including the size of the patient population, the nature of the trial protocol, the proximity of patients to clinical sites, the eligibility criteria for the clinical trial, patient compliance, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the product being studied in relation to other available therapies, including any new treatments that may be approved for the indications we are investigating. For example, patients may be discouraged from enrolling in our clinical trials if the trial protocol requires them to undergo extensive post-treatment procedures or follow-up to assess the safety and efficacy of a product candidate, or they may be persuaded to participate in contemporaneous clinical trials of a competitor’s product candidate. In addition, patients participating in our clinical trials may drop out before completion of the trial or experience adverse medical events unrelated to our product candidate. Delays in patient enrollment or failure of patients to continue to participate in a clinical trial may delay commencement or completion of the clinical trial, cause an increase in the costs of the clinical trial and delays, or result in the failure of the clinical trial.

 

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Clinical trials must be conducted in accordance with the laws and regulations of the FDA and other applicable regulatory authorities’ legal requirements, regulations or guidelines, and are subject to oversight by these governmental agencies and IRBs, or other bodies at the medical institutions where the clinical trials are conducted. In addition, clinical trials must be conducted with supplies of our devices produced under current good manufacturing practice, or cGMP, and other regulations. Furthermore, we rely on CROs, and clinical trial sites to ensure the proper and timely conduct of our clinical trials and while we have agreements governing their committed activities, we have limited influence over their actual performance. We depend on our collaborators and on medical institutions and CROs to conduct our clinical trials in compliance with good clinical practice, or GCP, requirements. To the extent our collaborators or the CROs fail to enroll participants for our clinical trials, fail to conduct the study to GCP standards or are delayed for a significant time in the execution of trials, including achieving full enrollment, we may be affected by increased costs, program delays or both. In addition, conducting clinical trials in various countries may subject us to further delays and expenses as a result of increased shipment costs, additional regulatory requirements and the engagement of non-U.S. CROs and other third party contractors, as well as expose us to risks associated with clinical investigators who are unknown to the FDA, and different standards of diagnosis, screening and medical care.

Even if our Alpha DaRT technology obtains marketing authorization in the United States, commercialization of our products in foreign countries would require similar authorization or certification by regulatory authorities in those countries. Marketing authorization and certification practices vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies, clinical trials. Any of these occurrences could have an adverse effect on our business, financial condition and results of operations.

Interim, “top-line” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose interim, top-line or preliminary data from our clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the interim, top-line or preliminary results that we report may differ from future results of the same trial, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Interim, top-line or preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the interim, top-line or preliminary data we previously announced. As a result, interim, top-line and preliminary data should be viewed with caution until the final data are available.

In particular, we may disclose interim data from our preclinical studies and clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Adverse differences between interim data and final data could significantly harm our business prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in our share price.

Further, others, including regulatory agencies or other bodies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, or the approvability or potential for commercialization of the particular product candidate. In addition, the information we choose to publicly disclose regarding a particular study, clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure. If the interim, top-line or preliminary data that we report differ from actual results, or if others,

 

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including regulatory authorities and other bodies, disagree with the conclusions reached, our ability to obtain marketing authorization or certification for, and commercialize, our Alpha DaRT technology may be harmed, which could harm our business, operating results, prospects or financial condition.

Even if we obtain marketing authorization or certification, we will be subject to ongoing regulatory review and scrutiny. Failure to comply with post-marketing regulatory requirements could subject us to enforcement actions, including substantial penalties, and might require us to recall or withdraw a product from the market.

If we obtain marketing authorization or certification for a product candidate, we will remain subject to ongoing and pervasive regulatory requirements governing, among other things, the manufacture, marketing, advertising, medical device reporting, sale, promotion, import, export, registration, and listing of devices. For example, medical device manufacturers must submit periodic reports to the FDA as a condition of obtaining marketing authorization. These reports include information about failures and certain adverse events associated with the device after its marketing authorization. Failure to submit such reports, or failure to submit the reports in a timely manner, could result in enforcement action by the FDA. Following its review of the periodic reports, the FDA might ask for additional information or initiate further investigation.

Regulatory changes could result in restrictions on our ability to continue or expand our operations, higher than anticipated costs, or lower than anticipated sales. Even after we have obtained marketing authorization or certification, we have ongoing responsibilities under FDA regulations and applicable foreign laws and regulations. The FDA, state and foreign regulatory authorities have broad enforcement powers. Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA, state or foreign regulatory authorities, which may include any of the following sanctions:

 

   

untitled letters or warning letters;

 

   

fines, injunctions, consent decrees and civil penalties;

 

   

recalls, termination of distribution, administrative detention, or seizure of our products;

 

   

customer notifications or repair, replacement or refunds;

 

   

operating restrictions or partial suspension or total shutdown of production;

 

   

delays in or refusal to grant our requests for future clearances, de novo classifications or approvals or comparable foreign marketing authorizations or certifications of new products, new intended uses, or modifications to existing products;

 

   

withdrawals or suspensions of any granted marketing authorizations or certifications, resulting in prohibitions on sales of our products;

 

   

FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and

 

   

criminal prosecution.

Any of these sanctions could result in higher than anticipated costs or lower than anticipated sales and have a material adverse effect on our reputation, business, financial condition and results of operations.

In addition, the FDA may change its marketing authorization policies, adopt additional regulations or revise existing regulations, or take other actions, which may prevent or delay marketing authorization of any product candidate under development or impact our ability to modify any products authorized for market on a timely basis. Such changes may also occur in foreign jurisdictions where we intend to market our products. Such policy or regulatory changes could impose additional requirements upon us that could delay our ability to obtain marketing authorizations, increase the costs of compliance or restrict our ability to maintain any marketing authorizations we have obtained. For example, in recent years, the FDA has announced plans to modernize the

 

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premarket notification pathway under Section 510(k) of the FDCA. For more information, see “Legislative or regulatory reforms in the United States or the EU may make it more difficult and costly for us to obtain marketing authorizations or certifications for any product candidate or to manufacture, market or distribute any product candidates after such marketing authorizations or certifications have been obtained.

Any product candidates we develop must be manufactured in accordance with applicable laws and regulations, and we could be forced to recall our devices or terminate production if we fail to comply with these regulations.

In the United States, the methods used in, and the facilities used for, the manufacture of medical devices must comply with the FDA’s cGMPs for medical devices, known as the Quality System Regulation, or QSR, which is a complex regulatory scheme that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging, handling, storage, distribution, installation, servicing and shipping of medical devices. Furthermore, we will be required to verify that our suppliers maintain facilities, procedures and operations that comply with our quality standards and applicable regulatory requirements. The FDA enforces the QSR through periodic announced or unannounced inspections of medical device manufacturing facilities, which may include the facilities of subcontractors. Our product candidates are also subject to similar state regulations and various laws and regulations of foreign countries governing manufacturing.

Our third-party manufacturers may not take the necessary steps to comply with applicable regulations, which could cause delays in the delivery of product candidate. In addition, failure to comply with applicable FDA requirements or later discovery of previously unknown problems with our products or manufacturing processes could result in, among other things: warning letters or untitled letters; fines, injunctions or civil penalties; suspension or withdrawal of marketing authorizations; seizures or recalls of our products; total or partial suspension of production or distribution; administrative or judicially imposed sanctions; the FDA’s refusal to grant pending or future clearances or approvals for our products; clinical holds; refusal to permit the import or export of our products; and criminal prosecution of us, our suppliers, or our employees. Similar requirements may apply in foreign jurisdictions.

Any of these actions could significantly and negatively affect supply of our product candidates, if authorized for sale by the FDA. If any of these events occurs, our reputation could be harmed, we could be exposed to product liability claims and we could lose customers and experience reduced sales and increased costs.

Any product candidate we develop may cause or contribute to adverse medical events, which could interrupt, delay, or prevent their continued development. If certain events occur after marketing authorization or certification, we may be required to report them to the FDA or foreign regulatory authorities, and if we fail to do so, we would be subject to sanctions that could harm our reputation, business, financial condition and results of operations. In addition, the discovery of serious safety issues with our products, or a recall of our products either voluntarily or at the direction of the FDA, another governmental authority or foreign regulatory authorities, could have a negative impact on us.

As is the case with cancer therapies generally, it is likely that there may be side effects and adverse events associated with our Alpha DaRT technology or any future product or product candidate’s use. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Undesirable side effects caused by our product candidates could cause us or regulatory authorities or other bodies to interrupt, delay or halt clinical trials or, may cause us to abandon their development or limit development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Undesirable side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.

 

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Patients treated with our product candidates may also be undergoing surgical, chemotherapy, immunotherapy or alternative radiation treatments, which can cause side effects or adverse events that are unrelated to our product candidate, but may still impact the success of our clinical trials. The inclusion of critically ill patients in our clinical trials may result in deaths or other adverse medical events due to other therapies or medications that such patients may be using or due to the gravity of such patients’ illnesses. Even if the side effects do not preclude the product candidate from obtaining or maintaining marketing authorization or certification, undesirable side effects may inhibit market acceptance due to its tolerability versus other therapies. Any of these developments could materially harm our business, financial condition and prospects.

Additionally, if our Alpha DaRT technology or any future product candidate receives marketing authorization from the FDA, the side effects observed in clinical studies could result in a more restrictive label and we will subject to the FDA’s medical device reporting regulations and similar foreign regulations, which require us to report to the FDA or to foreign regulatory authorities when we receive or become aware of information that reasonably suggests that one or more of our products may have caused or contributed to a death or serious injury or malfunctioned in a way that, if the malfunction were to recur, it could cause or contribute to a death or serious injury. The timing of our obligation to report is triggered by the date we become aware of the event as well as the nature of the event. We may fail to report events of which we become aware within the prescribed timeframe. We may also fail to recognize that we have become aware of a reportable event, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of the product. If we fail to comply with our reporting obligations, the FDA or foreign regulatory authorities could take action, including warning letters, untitled letters, administrative actions, criminal prosecution, imposition of civil monetary penalties, revocation of our marketing authorizations or certification, seizure of our products or delay in obtaining marketing authorizations or certification for our product candidates.

The FDA and foreign regulatory bodies have the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture of a product or in the event that a product poses an unacceptable risk to health. The FDA’s authority to require a recall must be based on a finding that there is reasonable probability that the device could cause serious injury or death. We may also choose to voluntarily recall a product if any material deficiency is found. A government-mandated or voluntary recall by us could occur as a result of an unacceptable risk to health, component failures, malfunctions, manufacturing defects, labeling or design deficiencies, packaging defects or other deficiencies or failures to comply with applicable regulations. Product defects or other errors may occur in the future.

Depending on the corrective action we take to redress a product’s deficiencies or defects, the FDA or foreign regulatory bodies may require, or we may decide, that we will need to obtain new marketing authorizations or certifications for the device before we may market or distribute the corrected device. Seeking such clearances, certifications or approvals may delay our ability to replace the recalled devices in a timely manner. Moreover, if we do not adequately address problems associated with our devices, we may face additional regulatory enforcement action, including FDA warning letters, product seizure, injunctions, administrative penalties or civil or criminal fines or similar actions by the foreign regulatory bodies.

Companies are required to maintain certain records of recalls and corrections, even if they are not reportable to the FDA. We may initiate voluntary withdrawals or corrections for our products in the future that we determine do not require notification of the FDA. If the FDA disagrees with our determinations, it could require us to report those actions as recalls and we may be subject to enforcement action. A future recall announcement could harm our reputation with customers, potentially lead to product liability claims against us and negatively affect our sales. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business and may harm our reputation and financial results.

 

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The misuse or off-label use of our product candidates, if authorized or certified for marketing, may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business.

Any marketing authorization or certification we may receive for a product candidate will be limited to specified indications for use. We plan to train our sales and marketing personnel, as well as any direct sales force which may be hired in the future, to not promote our devices for uses outside of the FDA (or foreign regulatory authorities)- authorized indications for use, known as “off-label uses.” We cannot, however, prevent a physician from using our devices off-label, when in the physician’s independent professional medical judgment he or she deems it appropriate. There may be increased risk of injury to patients if physicians attempt to use our devices off-label, which could harm our reputation in the marketplace among physicians and patients.

If the FDA or any foreign regulatory body determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance or imposition of an untitled letter, which is used for violators that do not necessitate a warning letter, injunction, seizure, civil fine or criminal penalties. It is also possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as false claims laws, if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations.

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

If we do not obtain and maintain international regulatory registrations, marketing authorizations or certifications for any product candidates we develop, we will be unable to market and sell such product candidates outside of the United States.

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

Obtaining marketing authorization from the FDA does not ensure similar marketing authorization or certifications by regulatory authorities in other countries, and registration, marketing authorization or

 

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

Legislative or regulatory reforms in the United States or the EU may make it more difficult and costly for us to obtain marketing authorizations or certifications for any product candidate or to manufacture, market or distribute any product candidates after such authorizations or certifications have been obtained.

From time to time, legislation is drafted and introduced in Congress that could significantly change the statutory provisions governing the regulation of medical devices. In addition, the FDA may change its policies, adopt additional regulations or revise existing regulations, or take other actions, which may prevent or delay marketing authorization of our future products under development or impact our ability to modify any products for which we have already obtained marketing authorizations on a timely basis. Over the last several years, the FDA has proposed reforms to its 510(k) clearance process, and such proposals could include increased requirements for clinical data and a longer review period, or could make it more difficult for manufacturers to utilize the 510(k) clearance process for their products. For example, in November 2018, FDA officials announced steps that the FDA intended to take to modernize the premarket notification pathway under Section 510(k) of the FDCA. Among other things, the FDA announced that it planned to develop proposals to drive manufacturers utilizing the 510(k) pathway toward the use of newer predicates. These proposals included plans to potentially sunset certain older devices that were used as predicates under the 510(k) clearance pathway, and to potentially publish a list of devices that have been cleared on the basis of demonstrated substantial equivalence to predicate devices that are more than 10 years old. These proposals have not yet been finalized or adopted, although the FDA may work with Congress to implement such proposals through legislation. Accordingly, it is unclear the extent to which any proposals, if adopted, could impose additional regulatory requirements on us that could delay our ability to obtain 510(k) clearances in the future, increase the costs of compliance, or restrict our ability to maintain any marketing authorizations that we may obtain, or otherwise create competition that may negatively affect our business.

More recently, in September 2019, the FDA issued revised final guidance describing an optional “safety and performance based” premarket review pathway for manufacturers of “certain, well-understood device types” to demonstrate substantial equivalence under the 510(k) clearance pathway by showing that such device meets objective safety and performance criteria established by the FDA, thereby obviating the need for manufacturers to compare the safety and performance of their medical devices to specific predicate devices in the clearance process. The FDA maintains a list device types appropriate for the “safety and performance based” pathway and continues to develop product-specific guidance documents that identify the performance criteria for each such device type, as well as recommended testing methods, where feasible. The FDA may establish performance criteria for classes of devices similar to ours, and it is unclear the extent to which such performance standards, if established, could impact our ability to obtain marketing authorization or otherwise create competition that may negatively affect our business.

In addition, FDA regulations and guidance are often revised or reinterpreted by the FDA in ways that may significantly affect our business and our products. Any new statutes, regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of any product candidates or make it more difficult to obtain marketing authorizations for, manufacture, market or distribute any product candidate we are developing. We cannot determine what effect changes in regulations, statutes, legal interpretation or policies, when and if promulgated, enacted or adopted may have on our business in the future. Such changes could, among other things, require: additional testing prior to obtaining clearance or approval; changes to manufacturing methods; recall, replacement or discontinuance of our products; or additional record keeping.

The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be promulgated that could prevent, limit or delay marketing authorization of any product candidates we

 

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develop. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may be subject to enforcement action and we may not achieve or sustain profitability.

The EU landscape concerning medical devices in the EU recently evolved. On May 25, 2017, the EU Medical Devices Regulation (Regulation 2017/745) entered into force, which repeals and replaces the EU Medical Devices Directive and the Active Implantable Medical Devices Directive. Unlike directives, which must be implemented into the national laws of the EU member states, regulations are directly applicable (i.e., without the need for adoption of EU member state laws implementing them) in all EU member states and are intended to eliminate current differences in the regulation of medical devices among EU member States. The Medical Devices Regulation, among other things, is intended to establish a uniform, transparent, predictable and sustainable regulatory framework across the EU for medical devices and ensure a high level of safety and health while supporting innovation. Devices lawfully placed on the market pursuant to the Medical Devices Directive prior to May 26, 2021 may generally continue to be made available on the market or put into service until May 26, 2025, provided that the requirements of the transitional provisions are fulfilled. In particular, the certificate in question must still be valid. However, even in this case, manufacturers must comply with a number of new or reinforced requirements set forth in the EU Medical Devices Regulation with regard to registration of economic operators and of devices, post-market surveillance, market surveillance and vigilance requirements.

The EU Medical Devices Regulation became effective on May 26, 2021. The new regulation among other things:

 

   

strengthens the rules on placing devices on the market (e.g. reclassification of certain devices and wider scope than the Medical Devices Directive) and reinforces surveillance once they are available;

 

   

establishes explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market;

 

   

establishes explicit provisions on importers’ and distributors’ obligations and responsibilities;

 

   

imposes an obligation to identify a responsible person who is ultimately responsible for all aspects of compliance with the requirements of the new regulation;

 

   

improves the traceability of medical devices throughout the supply chain to the end-user or patient through the introduction of a unique identification number, to increase the ability of manufacturers and regulatory authorities to trace specific devices through the supply chain and to facilitate the prompt and efficient recall of medical devices that have been found to present a safety risk;

 

   

sets up a central database (Eudamed) to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and

 

   

strengthens the rules for the assessment of certain high-risk devices, such as implants, which may have to undergo a clinical evaluation consultation procedure by experts before they are placed on the market.

These modifications may have an effect on the way we design and manufacture our products candidates and we conduct our business in the EU and EEA (also including Norway, Liechtenstein and Iceland). For example, as a result of the transition towards the new regime, Notified Body review times have lengthened, and product introductions or modifications could be delayed or canceled, which could adversely affect our ability to grow our business.

The EU-UK Trade and Cooperation Agreement, or TCA, came into effect on January 1, 2021. The TCA does not specifically refer to medical devices. However, as a result of Brexit, the EU Medical Devices Regulation will not be implemented in the UK, and previous legislation that mirrored the EU Medical Devices Regulation in the UK law has been revoked. The regulatory regime for medical devices in Great Britain (England, Scotland and Wales) will continue to be based on the requirements derived from current EU legislation, and the UK may

 

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choose to retain regulatory flexibility or align with the EU Medical Devices Regulation going forward. CE markings will continue to be recognized in the UK, and certificates issued by EU-recognized notified bodies will be valid in the UK, until June 30, 2023. For medical devices placed on the market in Great Britain after this period, the UK Conformity Assessment, or UKCA, marking will be mandatory. In contrast, UKCA marking and certificates issued by UK notified bodies will not be recognized on the EU market. The TCA does provide for cooperation and exchange of information in the area of product safety and compliance, including market surveillance, enforcement activities and measures, standardization related activities, exchanges of officials, and coordinated product recalls (or other similar actions). For medical devices that are locally manufactured but use components from other countries, the “rules of origin” criteria will need to be reviewed. Depending on which countries products will be ultimately sold in, manufacturers may start seeking alternative sources for components if this would allow them to benefit from no tariffs. The rules for placing medical devices on the Northern Ireland market will differ from those in Great Britain. These modifications may have an effect on the way we intend to conduct our business in these countries.

Changes in funding for, or disruptions caused by global health concerns impacting, the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new medical device products from being developed, authorized, certified or commercialized in a timely manner, which could negatively impact our business.

The ability of the FDA to review and authorize the sale of new products can be affected by a variety of factors, including government budget and funding levels; its ability to hire and retain key personnel and accept the payment of user fees; statutory, regulatory, and policy changes; and other events that may otherwise affect the FDA’s ability to perform routine functions. Average review times at the FDA have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA, other agencies and foreign bodies may also slow the time necessary for new devices to be reviewed and/or authorized or certified for marketing by necessary government agencies or foreign bodies, which would adversely affect our business. For example, over the last several years, including for 35 days beginning on December 22, 2018, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.

Separately, in response to the COVID-19 pandemic, on March 10, 2020, the FDA announced its intention to postpone inspections of foreign manufacturing facilities and products, and on March 18, 2020, the FDA temporarily postponed routine surveillance inspections of domestic manufacturing facilities. Subsequently, on July 10, 2020, the FDA announced its intention to resume certain on-site inspections of domestic manufacturing facilities subject to a risk-based prioritization system. The FDA intends to use this risk-based assessment system to identify the categories of regulatory activity that can occur within a given geographic area, ranging from mission critical inspections to resumption of all regulatory activities. Other regulatory authorities may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic. If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting business as usual or conducting inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

In the EU, notified bodies must be officially designated to certify products and services in accordance with the EU Medical Devices Regulation. Several notified bodies have been designated so far but the COVID-19 pandemic has significantly slowed down their designation process. Without the EU Medical Devices Regulation designation, notified bodies may not yet start certifying devices in accordance with the new Regulation. This situation could impact our ability to build our business in the EU and the EEA.

 

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Our business operations and current and future relationships with investigators, healthcare professionals, consultants, third-party payors, and customers will be subject to applicable healthcare regulatory laws, which could expose us to penalties.

Our business operations and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors, and customers, may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations. These laws may constrain the business or financial arrangements and relationships through which we conduct our operations, including how we research, market, sell and distribute our product candidates, if approved. Such laws include:

 

   

the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing any remuneration (including any kickback, bribe, or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under U.S. federal and state healthcare programs such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

 

   

the U.S. federal civil and criminal false claims laws, including the civil False Claims Act, which, among other things, impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the U.S. federal government, claims for payment or approval that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the U.S. federal government. In addition, the government may assert that a claim including items and services resulting from a violation of the U.S. federal Anti- Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;

 

   

the federal civil monetary penalties laws, which impose civil fines for, among other things, the offering or transfer of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies;

 

   

the U.S. federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services; similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

 

   

the FDCA, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices;

 

   

the U.S. Physician Payments Sunshine Act and its implementing regulations, which require certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the government information related to certain payments and other transfers of value to physicians, as defined by such law, and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members. Effective January 1, 2022, the U.S. federal physician transparency reporting requirements will extend to include transfers of value made during the previous year to certain non-physician providers such as physician assistants and nurse practitioners;

 

   

federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;

 

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analogous U.S. state laws and regulations, including: state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers; state laws that require medical device and pharmaceutical companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug and device manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; and state and local laws that require the registration of sales representatives; and

 

   

similar healthcare laws and regulations in the EU and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers.

Ensuring that our internal operations and future business arrangements with third parties comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices, including our relationships with physicians and other healthcare providers, some of whom are compensated in the form of stock options for consulting services provided, may not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations.

If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that may apply to us, we may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations. If any of the physicians or other providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment, which could affect our ability to operate our business. Further, defending against any such actions can be costly, time-consuming and may require significant personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business and our ability to sell our products may be materially harmed.

If in the future Alpha DaRT is approved for commercial sale or certified, but we are unable to obtain adequate reimbursement or insurance coverage from third-party payors, we may not be able to generate significant revenue.

Because the Alpha DaRT is still in the development stage, it is not yet approved for third-party payor coverage or reimbursement. Coding and coverage determinations as well as reimbursement levels and conditions are important to the commercial success of any product or offering. The future availability of insurance coverage and reimbursement for newly approved medical devices is highly uncertain, and our future business will be greatly impacted by the level of reimbursement provided by third-party payors.

In the United States, third-party payors decide which cancer treatment products and services they will cover, how much they will pay and whether they will continue reimbursement. Third-party payors may not cover or provide adequate reimbursement for the Alpha DaRT device, the Alpha DaRT sources or the procedures using the system, assuming we are able to fully develop and obtain all marketing authorizations to market it in the United States or similar certifications in other geographies. To date, we have not had any discussions with any third-party payors, including any regulatory agencies administering any government funded healthcare programs, regarding the coding, coverage or reimbursement for imaging services using the Alpha DaRT, which may vary depending on the specific application or indication of our technology. Accordingly, unless government and other

 

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third-party payors provide coverage and reimbursement for our products, patients and healthcare providers may choose not to use them, which would adversely impact our future revenues.

No uniform policy of coverage and reimbursement among payors in the United States exists and coverage and reimbursement for procedures can differ significantly from payor to payor. Some third-party payors must approve coverage for new or innovative devices or procedures before they will reimburse healthcare providers who use the products or therapies. Even though a new product may have been cleared for commercial distribution by the FDA, we may find limited demand for the product unless and until reimbursement approval has been obtained from governmental and private third-party payors. On January 12, 2021, the Centers for Medicare and Medicaid Services, or CMS, the federal agency responsible for administering the Medicare program, issued a final rule under which a breakthrough device designation by the FDA also provides a streamlined pathway to national Medicare coverage for a period of four years, beginning as early as the FDA marketing authorization for the product. On March 12, 2021, CMS delayed by 60 days the effective date of the final rule on Medicare coverage for innovative technology, which was previously slated to become effective March 15, 2021 and then further delayed until December 15, 2021. The agency also provided a 30-day public comment period, which ends April 16, 2021. Although we believe that Alpha DaRT, if cleared or approved by the FDA, could be eligible for coverage under this pathway, we can provide no assurances that we would be successful in obtaining coverage from Medicare or any other governmental or commercial third-party payor. In addition, while we believe that we may be able to rely on certain existing procedure codes for certain elements of the physician’s treatment efforts, we are not certain of this and as such may be required to seek new billing codes for our products, and regulatory authorities may not approve the creation of separate codes. Additionally, even if we are successful, these billing codes or the payment amounts associated with such codes may change in the future.

In addition to uncertainties surrounding coverage policies, there are periodic changes to reimbursement levels. Third-party payors regularly update reimbursement amounts and also from time to time revise the methodologies used to determine reimbursement amounts. This includes routine updates to payments to physicians, hospitals and ambulatory surgery centers for procedures during which our products are used. These updates could directly impact the demand for our products. By way of example, in the United States, payment rates under the Medicare Physician Fee Schedule are regularly subject to updates to effectuate various policy goals. The Medicare Access and CHIP Reauthorization Act of 2015 repealed the formula by which Medicare made annual payment adjustments to physicians and replaced the former formula with fixed annual updates and a new system of incentive payments that began in 2019 that are based on various performance measures and physicians’ participation in alternative payment models, such as accountable care organizations. The ongoing and future impact of these changes cannot be determined at this time.

A primary trend in the United States healthcare industry and elsewhere is cost containment. Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular products and services. Reimbursement may not be available, or continue to be available, for the Alpha DaRT or the treatment services using the Alpha DaRT or any other products we may develop in the future, or even if reimbursement is available, such reimbursement may not be adequate. We also will be subject to foreign reimbursement policies in the international markets we expect to enter. Decisions by health insurers or other third-party payors in these markets not to cover, or to discontinue reimbursing, our products could materially and adversely affect our business. If such decisions are made, they could also have a negative impact on our ability to generate revenues.

On September 18, 2020, the Centers for Medicare and Medicaid Services, or CMS, the federal agency responsible for administering the Medicare program, issued a final rule that would implement a new mandatory payment model for radiation oncology services: the Radiation Oncology Alternative Payment Model, or the RO Model. The RO Model is scheduled to commence January 1, 2022 and will be in effect for a five (5) year period. The RO Model significantly alters CMS’ payment methodology from a fee for service, or FFS, paradigm to a prospective payment for all radiotherapy services furnished during a 90-day episode of care for sixteen (16) different cancer types, regardless of the modality used or site of service. Under the RO Model, all providers

 

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of radiotherapy services, including physician group practices, hospital outpatient departments and free-standing radiation therapy centers located within a randomly selected Core Based Statistical Area, or CBSA are required to participate. The CBSAs selected for the RO Model will contain approximately 30% of all eligible Medicare FFS radiotherapy episodes in the U.S. Any provider outside of the CBSAs will continue to receive Medicare reimbursement based on a FFS methodology. It is uncertain the impact, if any, of the RO Model on the Medicare reimbursement to our customers when using our Alpha DaRT technology, if authorized for marketing or our business, financial condition, or results of operations.

Outside of the United States, reimbursement levels vary significantly by country. For example, in the EU, member states impose controls on whether products are reimbursable by national or regional health service providers and on the prices at which medical devices are reimbursed under state-run healthcare schemes.

Healthcare policy changes, including recently enacted legislation reforming the U.S. healthcare system, could harm our business, financial condition and results of operations.

In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs. Federal and state lawmakers regularly propose and, at times, enact legislation that would result in significant changes to the healthcare system, some of which are intended to contain or reduce the costs of medical products and services. Current and future legislative proposals to further reform healthcare or reduce healthcare costs may limit coverage of or lower reimbursement for our product candidates and the treatment associated with the use of our products. The cost containment measures that payors and providers are instituting and the effect of any healthcare reform initiative implemented in the future could impact our revenue from the sale of our product candidates, if approved or cleared.

By way of example, in the United States, the Affordable Care Act, or ACA, made a number of substantial changes in the way healthcare is financed by both governmental and private insurers. Among other ways in which it may affect our business, the ACA

 

   

Established a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate and develop such research;

 

   

Implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models; and

 

   

Expanded the eligibility criteria for Medicaid programs.

Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. By way of example, the Tax Cuts and Jobs Act of 2017, or TCJA, was enacted, which, among other things, removes penalties for not complying with the individual mandate to carry health insurance. On December 14, 2018, a U.S. District Court Judge in the Northern District of Texas (Texas District Court Judge) ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the TCJA, the remaining provisions of the ACA are invalid as well. On December 18, 2019, the U.S. Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well. The U.S. Supreme Court is currently reviewing this case, although it is unclear how the Supreme Court will rule. It is also unclear how other efforts, if any, to challenge, repeal or replace the ACA will impact the law or our business. Any expansion in the government’s role in the U.S. healthcare industry may result in decreased profits to us and/or lower reimbursement by payors for our product candidates, any of which may have a material adverse effect on our business, financial condition or results of operations.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted. The Budget Control Act of 2011, among other things, reduced Medicare payments to providers by 2% per fiscal year,

 

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effective on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020, through March 31, 2021, unless additional Congressional action is taken. Additionally, the American Taxpayer Relief Act of 2012, among other things, further reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. The Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, enacted on April 16, 2015, repealed the formula by which Medicare made annual payment adjustments to physicians and replaced the former formula with fixed annual updates and a new system of incentive payments that are based on various performance measures and physicians’ participation in alternative payment models such as accountable care organizations. It is unclear what effect new quality and payment programs, such as MACRA, may have on our business, financial condition, results of operations or cash flows.

We expect additional state, federal and foreign healthcare policies and reform measures to be adopted in the future, any of which could limit reimbursement for healthcare products and services or otherwise result in reduced demand for our product candidates or additional pricing pressure and have a material adverse effect on our industry generally and on our customers. We cannot predict what other healthcare programs and regulations will ultimately be implemented at the federal or state level or the effect of any future legislation or regulation in the United States may negatively affect our business, financial condition and results of operations. The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare may adversely affect our ability to set a price that we believe is fair for our product candidates, our ability to generate revenue and achieve or maintain profitability or the availability of capital.

Any changes of, or uncertainty with respect to, future coverage or reimbursement rates could affect demand for our product candidates, which in turn could impact our ability to successfully commercialize these devices and could have a material adverse effect on our business, financial condition and results of operations.

Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, financial condition and prospects.

The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state, federal and foreign laws, requirements and regulations governing the collection, use, disclosure, retention, and security of personal data, such as information that we may collect in connection with clinical trials in the U.S. and abroad. Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or perception of their requirements may have on our business. This evolution may create uncertainty in our business, affect our ability to operate in certain jurisdictions or to collect, store, transfer use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us. The cost of compliance with these laws, regulations and standards is high and is likely to increase in the future. Any failure or perceived failure by us to comply with federal, state or foreign laws or regulation, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our business, financial condition and prospects.

As our operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities. For example, the State of Israel has implemented data protection laws and regulations, including the Israeli Protection of Privacy Law of 1981. Further, in the U.S., HIPAA imposes, among other things, certain standards relating to the privacy, security, transmission and breach reporting of individually identifiable health information. Certain states have also adopted comparable privacy and security laws and regulations, some of which may be more stringent than HIPAA. Such laws and regulations will be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers

 

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and strategic partners. In addition, the CCPA went into effect on January 1, 2020. The CCPA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA may increase our compliance costs and potential liability, and many similar laws have been proposed at the federal level and in other states. Further, the CPRA recently passed in California. The CPRA will impose additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data. It will also create a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement. The majority of the provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required. In the event that we are subject to or affected by Israeli data protection laws, HIPAA, the CCPA, the CPRA or other domestic or foreign privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.

In Europe, the GDPR went into effect in May 2018 and imposes strict requirements for processing the personal data of individuals within the European Economic Area, or EEA. Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater. Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EU and the United States remains uncertain. For example, in 2016, the EU and United States agreed to a transfer framework for data transferred from the EU to the United States, called the Privacy Shield, but the Privacy Shield was invalidated in July 2020 by the Court of Justice of the European Union, or CJUE. While the CJEU upheld the adequacy of the standard contractual clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism, and potential alternative to the Privacy Shield), it made clear that reliance on them alone may not necessarily be sufficient in all circumstances. Use of the standard contractual clauses must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals and additional measures and/or contractual provisions may need to be put in place, however, the nature of these additional measures is currently uncertain. The CJEU went on to state that if a competent supervisory authority believes that the standard contractual clauses cannot be complied with in the destination country and the required level of protection cannot be secured by other means, such supervisory authority is under an obligation to suspend or prohibit that transfer. The European Commission has published revised standard contractual clauses for data transfers from the EEA: the revised clauses must be used for relevant new data transfers from September 27, 2021; existing standard contractual clauses arrangements must be migrated to the revised clauses by December 27, 2022. We will be required to implement the revised standard contractual clauses, in relation to relevant existing contracts and certain additional contracts and arrangements, within the relevant time frames. There is some uncertainty around whether the revised clauses can be used for all types of data transfers, particularly whether they can be relied on for data transfers to non-EEA entities subject to the GDPR. These recent developments are likely to require us to review and amend the legal mechanisms by which we make and/or receive personal data transfers to/in the United States. As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.

Further, from January 1, 2021, companies have to comply with the GDPR and also the United Kingdom GDPR, or UK GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK

 

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national law. The UK GDPR mirrors the fines under the GDPR, i.e., fines up to the greater of €20 million (£17.5 million) or 4% of global turnover. The European Commission has adopted an adequacy decision in favor of the United Kingdom, enabling data transfers from EU member states to the United Kingdom without additional safeguards. However, the United Kingdom adequacy decision will automatically expire in June 2025 unless the European Commission re-assesses and renews/extends that decision, and remains under review by the Commission during this period. The relationship between the United Kingdom and the EU in relation to certain aspects of data protection law remains unclear, and it is unclear how UK data protection laws and regulations will develop in the medium to longer term, and how data transfers to and from the United Kingdom will be regulated in the long term. These changes will lead to additional costs and increase our overall risk exposure.

Although we work to comply with applicable laws, regulations and standards, our contractual obligations and other legal obligations, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply. Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business, financial condition and prospects.

Risks Related to Alpha Tau’s Reliance on Third Parties

In this section “we,” “us” and “our” refer to Alpha Tau.

We rely on a limited number of third-party suppliers and, in some cases, sole suppliers, for the majority of our components, subassemblies and materials and may not be able to find replacements or immediately transition to alternative suppliers.

We rely on several sole suppliers for certain components of our Alpha DaRT technology. These sole suppliers, and any of our other suppliers, may be unwilling or unable to supply components of these systems to us reliably and at the levels we anticipate or are required by us. For us to be successful, our suppliers must be able to provide us with products and components in substantial quantities, in compliance with regulatory requirements, in accordance with agreed upon specifications, at acceptable costs and on a timely basis. If we obtain marketing authorization or certification, and we encounter delays or difficulties in securing these components, an interruption in our commercial operations could occur if we cannot then obtain an acceptable substitute. If we are required to transition to new third-party suppliers for certain components of our Alpha DaRT technology or any future product or product candidates, we believe that there are a few other manufacturers that are currently capable of supplying the necessary components. In addition, the use of components or materials furnished by these alternative suppliers could require us to alter our operations. Any such interruption or change in supplier could harm our reputation, business, financial condition and results of operations.

Furthermore, if we are required to change the manufacturer of a critical component of our product candidates, we will be required to verify that the new manufacturer maintains facilities, procedures and operations that comply with our quality and applicable regulatory requirements, which could further impede our ability to manufacture our implant systems in a timely manner. We currently do not carry inventory for components for more than three months at any given time. Transitioning to a new supplier could be time-consuming and expensive, may result in interruptions in our operations and product delivery, could affect the performance specifications of our product candidates or could require that we modify their design. If the change in manufacturer results in a significant change to any product after its authorization or certification for marketing, a new 510(k) clearance from the FDA or similar international regulatory authorization or certification may be necessary before we implement the change, which could cause substantial delays. The occurrence of any of these events could harm our ability to meet the demand for our products in a timely manner or cost-effectively.

We cannot assure you that we will be able to secure alternative equipment and materials and utilize such equipment and materials without experiencing interruptions in our workflow. If we should encounter delays or

 

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difficulties in securing, reconfiguring or revalidating the equipment and components we require for our implant systems, our reputation, business, financial condition and results of operations could be negatively impacted.

We currently rely, and plan to rely in the future, on third parties to conduct and support our portions of our preclinical studies and clinical trials. If these third parties do not properly and successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain marketing authorization or certification of or commercialize our product candidates.

We have utilized and plan to continue to utilize and depend upon independent investigators and collaborators, such as medical institutions, CROs, contract manufacturing organizations, or CMOs, and strategic partners to conduct and support portions of our preclinical studies and clinical trials under agreements with us. We expect to have to negotiate budgets and contracts with CROs, trial sites and CMOs and we may not be able to do so on favorable terms, which may result in delays to our development timelines and increased costs. We will rely heavily on these third parties over the course of our preclinical studies and clinical trials, and we control only certain aspects of their activities. As a result, we will have less direct control over the conduct, timing and completion of these preclinical studies and clinical trials and the management of data developed through preclinical studies and clinical trials than would be the case if we were relying entirely upon our own staff. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with applicable protocol, legal and regulatory requirements and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities. We and these third parties are required to comply with GCP requirements, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for product candidates in clinical development. Regulatory authorities enforce these GCP requirements through periodic inspections of trial sponsors, principal investigators and trial sites.

If we or any of these third parties fail to comply with applicable GCP regulations, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities or other bodies may require us to perform additional clinical trials before approving our marketing applications or certifications. We cannot assure you that, upon inspection, such regulatory authorities will determine that any of our clinical trials comply with the GCP regulations. In addition, our product candidates must be produced in accordance with cGMP requirements known as the QSR. Our failure or any failure by these third parties to comply with these regulations or to recruit a sufficient number of patients may require us to repeat clinical trials, which would delay the marketing authorization or certification process. Moreover, our business may be implicated if any of these third parties violates federal, state or foreign fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.

Any third parties conducting or supporting portions of our clinical trials will not be our employees and, except for remedies available to us under our agreements with such third parties, we cannot control whether or not they devote sufficient time and resources to our product candidates. These third parties may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials, or other product development activities, which could affect their performance on our behalf. If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain marketing authorizations or certifications for or successfully commercialize our product candidates. As a result, our financial results and the commercial prospects for our product candidates would be adversely affected, our costs could increase and our ability to generate revenue could be delayed.

Switching or adding third parties to conduct or support portions of our preclinical studies and clinical trials involves substantial cost and requires extensive management time and focus. In addition, there is a natural transition period when a new third party commences work. As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines.

 

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If we or third parties, such as CROs or trial sites, use hazardous and biological materials in a manner that causes injury or violates applicable law, we may be liable for damages.

Our research and development activities involves the controlled use of potentially hazardous substances, including radiological materials, by us or third parties, such as CROs and CMOs. Our use of radioactive materials is regulated by the United States Nuclear Regulatory Commission and specified agencies of certain states for the possession, transfer, import, export, use, storage, handling and disposal of radioactive materials. We are also subject to international laws and regulations that apply to manufacturers of radiation-emitting devices and products utilizing radioactive materials. These are often comparable to, if not more stringent than, the equivalent regulations in the United States. The use of Thorium-228 in our manufacturing processes, and Radium-224 in our Alpha DaRT technology, involves the inherent risk of exposure from alpha and beta particle emissions to the patient receiving the sources implanted, the clinicians administering the Alpha DaRT technology, our employees and others who may handle our products, which can alter or harm healthy cells in the body. Additionally, as we continue to develop our Alpha DaRT technology we may experiment with increased amounts of radiation in an attempt to increase the potential efficacy of our technology, which could heighten the potential risk of radiation exposure. We and such third parties are subject to the federal, state, provincial and local laws and regulations governing the use, manufacture, storage, handling, and disposal of radiological, medical and hazardous materials. Although we believe that our and such third-parties’ procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, we cannot completely eliminate the risk of contamination or injury resulting from radiological, medical or hazardous materials. As a result of any such contamination or injury, we may incur liability or local, city, state, provincial or federal authorities may curtail the use of these materials and interrupt our business operations. In the event of an accident, we could be held liable for damages or penalized with fines, and the liability could exceed our resources. Compliance with applicable environmental laws and regulations is expensive, and current or future environmental regulations may impair our research, development and production efforts, which could harm our business, prospects, financial condition, or results of operations. We currently maintain insurance coverage for injuries resulting from the hazardous materials we use; however, future claims may exceed the amount of our coverage. Also, we do not have insurance coverage for pollution cleanup and removal. Currently the costs of complying with such federal, state, provincial, local and foreign environmental regulations are not significant, and consist primarily of waste disposal expenses. However, they could become expensive, and current or future environmental laws or regulations may impair our research, development, production and commercialization efforts.

Additionally, our manufacture and distribution of devices utilizing radioactive material or emitting radiation also requires us to obtain a number of licenses and certifications for these devices and materials. Handling of these products must also be in accordance with a specific radioactive materials license. Obtaining licenses and certifications may be time consuming, expensive, and uncertain. If we fail to obtain such licenses and registrations or if substantial delays are incurred in obtaining such licenses and registrations, we may be unable to manufacture, distribute and ultimately sell our Alpha DaRT technology, if approved or certified. Additionally, any lapse in our licenses, or the licenses of our facilities, could increase our costs and adversely affect our operations and financial results.

We may be unable to obtain a sufficient or sufficiently pure supply of radioisotopes to support clinical development or at commercial scale.

Thorium-228 is a key component of our Alpha DaRT technology, as it naturally decays into Radium-224 that is collected onto the sources which comprise an integral part of our Alpha DaRT technology. We have entered into a multi-year supply contract with Eckert & Ziegler AG in Germany, and also acquire Thorium-228 from the Oak Ridge National Laboratory of the United States Department of Energy. We are also aware of or have spoken with other potential suppliers of Thorium-228, such that we anticipate a steady, unrestricted supply of thorium for the production of the Alpha DaRT. We will continually evaluate Thorium-228 manufacturers and suppliers and intend to have redundant suppliers prior to the commercial launch of the Alpha DaRT technology,

 

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if approved. While we consider Thorium-228 to be readily available, there can be no guarantee that we will be able to secure another Thorium-228 supplier or obtain on terms that are acceptable to us.

Our ability to conduct clinical trials to advance our Alpha DaRT technology is dependent on our ability to obtain the radioisotope Thorium-228 and other isotopes we may choose to utilize in the future. Currently, we are dependent on third-party manufacturers and suppliers for our isotopes. These suppliers may not perform their contracted services or may breach or terminate their agreements with us, or may provide a product not of sufficient quality to allow successful use in our manufacturing processes. Our suppliers are subject to regulations and standards that are overseen by regulatory and government agencies and we have no control over our suppliers’ compliance to these standards. Failure to comply with regulations and standards may result in their inability to supply isotope could result in delays in our clinical trials, which could have a negative impact on our business. We have developed intellectual property, know-how and trade secrets related to the manufacturing process of the Alpha DaRT technology.

We may form or seek collaborations or strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such collaborations, alliances or licensing arrangements.

We may form or seek strategic alliances, create joint ventures or collaborations, or enter into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to our Alpha DaRT technology and any future products or product candidates that we may develop. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing shareholders or disrupt our management and business.

In addition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex. We may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidates as having the requisite potential to demonstrate safety, potency and quality and obtain marketing authorization or certification.

Further, collaborations involving our product candidates are subject to numerous risks, which may include the following:

 

   

collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration;

 

   

collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization of our product candidates based on clinical trial results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities;

 

   

collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

 

   

collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates;

 

   

a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to their marketing and distribution;

 

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collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;

 

   

disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our product candidates, or that result in costly litigation or arbitration that diverts management attention and resources;

 

   

collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates; and

 

   

collaborators may own or co-own intellectual property covering our products that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property.

As a result, if we enter into collaboration agreements and strategic partnerships or license our product candidates, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture, which could delay our timelines or otherwise adversely affect our business. We also cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction. Any delays in entering into new collaborations or strategic partnership agreements related to our product candidates could delay the development and commercialization of our product candidates in certain geographies for certain indications, which would harm our business, prospects, financial condition and results of operations.

Risks Related to Alpha Tau’s Intellectual Property

In this section “we,” “us” and “our” refer to Alpha Tau.

If we are unable to obtain and maintain patent or other intellectual property protection for our Alpha DaRT technology and for any other products or product candidates that we develop, or if the scope of the patent or other intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to commercialize any product candidates we may develop, and our technology may be adversely affected.

Our success depends in large part on our ability to obtain and maintain patents, trademarks and other intellectual property rights in the United States and other countries with respect to our Alpha DaRT technology or other products or product candidates we may develop, their respective components, formulations, combination therapies, methods used to manufacture them and methods of treatment and development that are important to our business, as well as our ability to operate without infringing the proprietary rights of others. We rely on a combination of contractual provisions, patent protection, as well as a combination of trade secret and trademark laws, to protect our core technology and commercial products and prevent others from copying our treatment delivery devices and methods. However, these legal measures afford only limited protection, and competitors or others may gain access to or use of our intellectual property and proprietary information. For example, patent protection and intellectual property laws may not: (i) prevent competitors from obtaining access to our trade secrets, proprietary information, data, know-how and technology; (ii) prevent others from copying our systems and methods; or (iii) provide a sustained competitive advantage. If we do not adequately protect our intellectual property rights, competitors may be able to erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.

To protect our proprietary position, we file patent applications in the United States and abroad related to our novel product candidates that are important to our business. We may in the future also license or purchase patents and patent applications owned or controlled by others As of June 30, 2021, we had 82 issued patents, including both method and device patents, and 67 pending patent applications in the United States, Europe, Canada, Japan,

 

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Australia, China, South Korea, Russia, Mexico, India, Hong Kong, Singapore, South Africa and The African Regional Intellectual Property Organization, or ARIPO, relating to our Alpha DaRT technology. Some of our earlier filed patents are expected to expire between 2024 and 2026, subject to patent term extensions and adjustments that may be available in certain jurisdictions. When key patents covering our core technology expire, competitors and other third parties may be able to make competing products and encroach on our market share.

It is possible that defects of form in the preparation or filing of our patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope, or requests for patent term adjustments. If we are unable to secure or maintain patent protection with respect to our Alpha DaRT technology and any proprietary products and technology we develop, our business, financial condition, results of operations, and prospects could be materially harmed. Our pending and future patent applications may not result in patents being issued or that issued patents will afford sufficient protection of our product candidates or their intended uses against competitors, nor can there be any assurance that the patents issued will not be infringed, designed around, invalidated by third parties, or effectively prevent others from commercializing competitive technologies, products or product candidates. Further, some of our pending patent applications may be allowed in the future, but we cannot be certain that an allowed patent application will become an issued patent. There may be events that cause withdrawal of the allowance of a patent application. For example, after a patent application has been allowed, but prior to being issued, material that could be relevant to patentability may be identified. In such circumstances, the applicant may pull the application from allowance in order for the USPTO to review the application in view of the new material. We cannot be certain that the USPTO will issue the application in view of the new material. We anticipate additional patent applications will be filed both in the United States and in other countries, as appropriate. However, we cannot predict: (i) if additional patent applications covering new technologies related to our product candidates will be filed; (ii) if and when patents will issue; (iii) the degree and range of protection any issued patents will afford us against competitors, including whether third parties will find ways to invalidate or otherwise circumvent our patents; (iv) whether any of our intellectual property will provide any competitive advantage; (v) whether any of our patents that may be issued may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise provide any competitive advantage; (vi) whether others will obtain patents claiming inventions similar to those covered by our patents and patent applications; or (vii) whether we will need to initiate or defend litigation or administrative proceedings which may be costly regardless of whether we win or lose. The patent prosecution process is complex, expensive, time-consuming and inconsistent across jurisdictions. We may not be able to file, prosecute, maintain, enforce, or license all necessary or desirable patent rights at a commercially reasonable cost or in a timely manner. In addition, we may not pursue or obtain patent protection in all relevant markets. It is possible that we will fail to identify important patentable aspects of our research and development efforts in time to obtain appropriate or any patent protection. If we delay filing a patent application, and a competitor files a patent application on the same or a similar invention before we do, our ability to secure patent rights may be limited. We may not be able to patent the invention at all. Even if we can patent the invention, we may be able to patent only a limited scope of the invention, and the limited scope may be inadequate to protect our products, or to block competitor products that are similar or adjacent to ours. Our earliest patent filings have been published. A competitor may review our published patents and arrive at the same or similar technology advances for our products as we developed. If the competitor files a patent application on such an advance before we do, then we may no longer be able to protect that aspect of our products and we may require a license from the competitor. If the license is not available on commercially-viable terms, then we may not be able to launch our product.

Going forward, the growth of our business may depend in part on our ability to acquire or in-license additional proprietary rights. For example, our programs may involve additional product candidates that may require the use of additional proprietary rights held by third parties. We may be unable to acquire or in-license any relevant third-party intellectual property rights that we identify as necessary or important to our business operations. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all, which would adversely affect our business. We may need to cease use of, and may need to seek to develop alternative approaches that do not infringe on, such intellectual property rights which may entail additional costs and development delays and such alternative approaches may not be feasible. Even if we are able to obtain a

 

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license under such intellectual property rights, any such license may be non-exclusive, and may allow our competitors access to the same technologies licensed to us.

The patent positions of medical device companies may involve complex legal and factual questions and have been the subject of much litigation in recent years, and therefore, the scope, validity and enforceability of any patent claims that we have or may obtain cannot be predicted with certainty. Our pending and future patent applications may not result in patents being issued in the United States or in other jurisdictions that protect our technology or products or that effectively prevent others from commercializing competitive technologies and products. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection. In addition, the laws of foreign countries may not protect our products and inventions to the same extent as the laws of the United States. While we enter into non-disclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development efforts, including for example, our employees, corporate collaborators, external academic scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby endangering our ability to seek patent protection. In addition, publications of discoveries in the scientific and scholarly literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not until issuance as a patent. Consequently, we cannot be certain that we were the first to file for patent protection on the inventions claimed in our patents or pending patent applications. In addition, the USPTO might require that the term of a patent issuing from a pending patent application be disclaimed and limited to the term of another patent that is commonly owned or names a common inventor. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain.

Our competitors may be able to circumvent our owned or any future in-licensed patents by developing similar or alternative technologies or products in a non-infringing manner. The issuance of a patent is not conclusive as to its scope, validity or enforceability, and our owned and future in-licensed patents may be challenged in the courts or patent offices in the United States and abroad. For example, we may become involved in opposition, interference, derivation, inter partes review or other proceedings challenging our patent rights, and the outcome of any proceedings are highly uncertain. Such challenges may result in the patent claims of our owned or any future in-licensed patents being narrowed, invalidated or held unenforceable, which could limit our ability to stop or prevent us from stopping others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products.

In addition, given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. Moreover, some of our patents and patent applications are, and may in the future be, co-owned with third parties. If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and technology. In addition, we or our future licensors may need the cooperation of any such co-owners of our owned and in-licensed patents in order to enforce such patents against third parties, and such cooperation may not be provided to us or our future licensors. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.

Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date. Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our

 

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products are obtained, once the patent life has expired for a product, we may be open to competition. Given the amount of time required for the development, testing and regulatory review of new products, patents protecting such products might expire before or shortly after such products are commercialized. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours for a meaningful amount of time, or at all.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

In addition to the protection afforded by patents, we seek to rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce and any other elements of our product discovery and development processes that involve proprietary know-how, information, or technology that is not covered by our patents. Elements of our products, including processes for their preparation and manufacture, may involve proprietary know-how, information, or technology that is not covered by patents, and thus for these aspects we may consider trade secrets and know-how to be our primary intellectual property. Any disclosure, either intentional or unintentional, by our employees or third-party consultants and vendors that we engage to perform research, clinical trials or manufacturing activities, or misappropriation by third parties (such as through a cybersecurity breach) of our trade secrets or proprietary information could enable competitors to duplicate or surpass our technological achievements, thus eroding our competitive position in our market. Because we expect to rely on third parties in the development and manufacture of our products, we must, at times, share trade secrets with them. Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.

Trade secrets and know-how can be difficult to protect. We require all of our employees to enter into written employment agreements containing provisions of confidentiality and obligations to assign any inventions generated in the course of their employment to us. Further, we enter into non-disclosure and confidentiality agreements with our corporate collaborators, outside scientific collaborators, contract research organizations, contract manufacturers, consultants, advisors and any other third parties who have access to our proprietary know-how, information, or technology. With our consultants, contractors, and outside scientific collaborators, these agreements typically include invention assignment obligations. We cannot guarantee that we have entered into such agreements with each party that may have or has had access to our trade secrets or proprietary technology and processes. We cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. We may need to share our proprietary information, including trade secrets, with future business partners, collaborators, contractors and others located in countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign actors, and those affiliated with or controlled by state actors. Further, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third-party, we would have no right to prevent them from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor or other third-party, our competitive position would be harmed.

In addition, we take other appropriate precautions, such as physical and technological security measures, to guard against misappropriation of our proprietary technology by third parties. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach. We have also adopted policies and conduct training that provides guidance on our expectations, and our advice for best practices, in protecting our trade secrets. Despite these undertakings, we may not be able to effectively protect our trade secrets.

 

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We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products.

The intellectual property landscape around our radiopharmaceutical product candidates is crowded, rapidly evolving and interdisciplinary, and it is difficult to conclusively assess our freedom to operate without infringing on third-party rights. We may analyze patents or patent applications of our competitors that we believe are relevant to our activities, and consider that we are free to operate in relation to our product candidates, but our competitors may obtain issued claims, including in patents we consider to be unrelated to our products or activities, which block our efforts or may potentially result in our product candidates or our activities infringing such claims. We cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction.

The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history. Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect. For example, we may incorrectly determine that our products are not covered by a third-party patent or may incorrectly predict whether a third-party’s pending application will issue with claims of relevant scope. Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect. Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our products.

Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain. Defending against such law suits will be costly and time consuming, and an unfavorable outcome in that litigation would have a material adverse effect on our business.

Our commercial success depends in part on our ability to avoid infringement of the patents and proprietary rights of third parties. There is a substantial amount of litigation involving the infringement of patents and other intellectual property rights in the biotechnology and pharmaceutical industries. We may be exposed to, or threatened with, future litigation by third parties having patent or other intellectual property rights and who allege that our product candidates, uses and/or other proprietary technologies infringe their intellectual property rights. Numerous United States and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing our product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk that our product candidates may give rise to claims of infringement of the patent rights of others increases. Moreover, it is not always clear to industry participants, including us, which patents exist which may be found to cover various types of products or their methods of use or manufacture. Thus, because of the large number of patents issued and patent applications currently pending in our fields, there may be a risk that third parties may allege they have patent rights which are infringed by our product candidates, technologies or methods.

If a third party alleges that we infringe its intellectual property rights, we may face a number of issues, including, but not limited to:

 

   

infringement and other intellectual property misappropriation which, regardless of merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business;

 

   

substantial damages for infringement or misappropriation, which we may have to pay if a court decides that the product candidate or technology at issue infringes on or violates the third-party’s rights, and, if the court finds we have willfully infringed intellectual property rights, we could be ordered to pay treble damages and the patent owner’s attorneys’ fees;

 

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an injunction prohibiting us from manufacturing, marketing or selling our product candidates, or from using our proprietary technologies, unless the third party agrees to license its patent rights to us;

 

   

even if a license is available from a third party, we may have to pay substantial royalties, upfront fees and other amounts, and/or grant cross-licenses to intellectual property rights protecting our products; and

 

   

we may be forced to try to redesign our product candidates or processes so they do not infringe third-party intellectual property rights, an undertaking which may not be possible or which may require substantial monetary expenditures and time.

Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations or could otherwise have a material adverse effect on our business, results of operations, financial condition and prospects.

Third parties may assert that we are employing their proprietary technology without authorization. Generally, conducting preclinical and clinical trials or investigations and other development activities in the United States is not considered an act of infringement. If our product candidate is approved by the FDA, a third party may then seek to enforce its patent by filing a patent infringement lawsuit against us. While we may believe that patent claims or other intellectual property rights of a third party would not have a materially adverse effect on the commercialization of our product candidates, we may be incorrect in this belief, or we may not be able to prove it in litigation. In this regard, patents issued in the United States by law enjoy a presumption of validity that can be rebutted only with evidence that is “clear and convincing,” a heightened standard of proof. There may be issued third-party patents of which we are currently unaware with claims to compositions, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates. Patent applications can take many years to issue. There may be currently pending patent applications which may later result in issued patents that may be infringed by our product candidates. Moreover, we may fail to identify relevant patents or incorrectly conclude that a patent is invalid, not enforceable, exhausted, or not infringed by our activities. If any third-party patents, held now or obtained in the future by a third party, were found by a court of competent jurisdiction to cover the manufacturing process of our product candidates, constructs or molecules used in or formed during the manufacturing process, or any final product or methods use of the product, the holders of any such patents may be able to block our ability to commercialize the product candidate unless we obtained a license under the applicable patents, or until such patents expire or they are finally determined to be held invalid or unenforceable. Similarly, if any third-party patent were held by a court of competent jurisdiction to cover any aspect of our formulations, any combination therapies or patient selection methods, the holders of any such patent may be able to block our ability to develop and commercialize the product candidate unless we obtained a license or until such patent expires or is finally determined to be held invalid or unenforceable. In either case, such a license may not be available on commercially reasonable terms or at all. If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, or at all, our ability to commercialize our product candidates may be impaired or delayed, which could in turn significantly harm our business. Even if we obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize our current or future product candidates.

Parties making claims against us may seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates. Defense of these claims, regardless of their merit, could involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be

 

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impossible or require substantial time and monetary expenditure. We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms. Furthermore, even in the absence of litigation, we may need or may choose to obtain licenses from third parties to advance our research or allow commercialization of our product candidates. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further develop and commercialize our product candidates, which could harm our business significantly.

We may not be successful in obtaining or maintaining necessary rights through acquisitions and in-licenses to product components and processes that may be required to complete development of and commercialize our Alpha DaRT Technology.

Presently we own various patents and patent applications related to our Alpha DaRT technology and we are not a party to any license agreements with third parties that enable us to utilize third-party technology. Because our Alpha DaRT technology, including the use in connection with other therapies, may require the use of proprietary rights held by third parties in the future, the growth of our business will likely depend in part on our ability to acquire, in-license or use such third-party proprietary rights.

The licensing and acquisition of third-party intellectual property rights is a competitive practice, and companies that may be more established, or have greater resources than we do, may also be pursuing strategies to license or acquire third-party intellectual property rights that we may consider necessary or attractive for commercializing our product candidates. More established companies may have a competitive advantage over us due to their larger size and cash resources or greater clinical development and commercialization capabilities. There can be no assurance that we will be able to successfully complete such negotiations and ultimately acquire the rights to the intellectual property surrounding the additional product candidates that we may seek to acquire. We may be unable to acquire or in-license methods of use, processes or other intellectual property rights from third parties that we identify as necessary or important to our business operations. If we fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all, it would harm our business. We may need to cease use of the compositions or methods covered by such third-party intellectual property rights, and/or may need to seek to develop alternative approaches that do not infringe on such intellectual property rights which may entail additional costs and development delays, even if it is possible and we were able to develop such alternatives. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies that we have licensed. In that event, we may be required to expend significant time and resources to develop or license replacement technologies. Moreover, we may need to rely on our future licensors to obtain, maintain and enforce patent rights for the licensed intellectual property; however, they may not successfully prosecute, maintain or enforce such licensed intellectual property. We may have limited control over the manner in which our future licensors initiate an infringement proceeding against a third-party infringer of the intellectual property rights, or defend certain of the intellectual property that is licensed to us. It is possible that the future licensors’ infringement proceeding or defense activities may be less vigorous than had we conducted them ourselves. Further, our future licensors may retain certain rights under their agreements with us, including the right to use the underlying technology for noncommercial academic and research use, to publish general scientific findings from research related to the technology, and to make customary scientific and scholarly disclosures of information relating to the technology. It would be difficult to monitor whether our future licensors limit their use of the technology to these uses, and we could incur substantial expenses to enforce our rights to our licensed technology in the event of misuse. Also, the United States federal government retains certain rights in inventions produced with its financial assistance under the Patent and Trademark Law Amendments Act, or the Bayh-Dole Act. The federal government retains a “nonexclusive, nontransferable, irrevocable, paid-up license” for its own benefit. The Bayh-Dole Act also provides federal agencies with “march-in rights.” March-in rights allow the government, in specified circumstances, to require the contractor or successors in title to the patent to grant a “nonexclusive, partially exclusive, or exclusive license” to a “responsible applicant or applicants.” If the patent owner refuses to do so, the government may grant the license itself. We sometimes collaborate with academic institutions to accelerate our preclinical research or development. While it is our policy to avoid engaging our university partners in projects in which there is a risk that federal funds may be

 

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commingled, we cannot be sure that any co-developed intellectual property will be free from government rights pursuant to the Bayh-Dole Act. If, in the future, we co-own or license in technology which is critical to our business that is developed in whole or in part with federal funds subject to the Bayh-Dole Act, our ability to enforce or otherwise exploit patents covering such technology may be adversely affected.

Additionally, we have and may continue to collaborate with academic institutions to accelerate our preclinical research or development under written agreements with these institutions. In certain cases, these institutions provide us with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration. Regardless of such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us. If we are unable to do so, the institution may offer the intellectual property rights to others, potentially blocking our ability to pursue our program. If we are unable to successfully obtain rights to required third-party intellectual property or to maintain the existing intellectual property rights we have, we may have to abandon development of such program and our business and financial condition could suffer.

Further, our future intellectual property license agreements may impose on us various development, regulatory and/or commercial diligence obligations, payment of milestones, royalties or other amounts and other obligations. If we fail to comply with our obligations under these agreements (including as a result of COVID-19 impacting our operations), we use the licensed intellectual property in an unauthorized manner or we are subject to bankruptcy-related proceedings, the terms of the licenses may be materially modified, such as by rendering currently exclusive licenses non-exclusive, or it may give our future licensors the right to terminate their respective agreement with us, which could limit our ability to implement our current business plan and materially adversely affect our business, financial condition, results of operations and prospects. In addition, disputes may arise between us and our future licensors regarding intellectual property subject to a license agreement, including: (i) the scope of rights granted under the license agreement and other interpretation-related issues; (ii) whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the license agreement; (iii) our right to sublicense patents and other rights to third parties; (iv) our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates, and what activities satisfy those diligence obligations; (v) our right to transfer or assign the license; and (vi) the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our future licensors and us and our partners. If disputes over intellectual property that we license in the future prevent or impair our ability to maintain our licensing arrangements on acceptable terms, we may not be able to successfully develop and commercialize the affected product candidates, which would have a material adverse effect on our business.

In addition, certain of our future agreements with third parties may limit or delay our ability to consummate certain transactions, may impact the value of those transactions, or may limit our ability to pursue certain activities. For example, we may in the future enter into license agreements that are not assignable or transferable, or that require the licensor’s express consent in order for an assignment or transfer to take place.

We may be involved in lawsuits or litigation to protect or enforce our patents or other intellectual property, which could result in substantial costs and liability and prevent us from commercializing our potential products.

Competitors may infringe our patents, trademarks or other intellectual property. To counter infringement or unauthorized use, we may be required to take legal action to enforce our patents against such infringing activity. Such enforcement proceedings against infringers can be expensive and time-consuming. Any such claims could provoke these parties to assert counterclaims against us, including claims alleging that we infringe their patents or other intellectual property rights. In addition, in an infringement proceeding, a court may decide that one or more of our patents is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology. Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable or that

 

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the party against whom we have asserted trademark infringement has superior rights to the marks in question. In such a case, we could ultimately be forced to cease use of such marks. In any intellectual property litigation, even if we are successful, any award of monetary damages or other remedy we receive may not be commercially valuable. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated, held unenforceable, or interpreted narrowly and could put our patent applications at risk of not issuing. Defense against these assertions, non-infringement, invalidity or unenforceability regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.

We may be required to protect our patents through procedures created to attack the validity of a patent at the USPTO. The USPTO hears post-grant proceedings, including post-grant review, inter partes review and derivation proceedings. Post-grant proceedings may be provoked by third parties or brought by the USPTO to determine the validity or priority of inventions with respect to our patents or patent applications. An adverse determination in any such submission or proceeding could reduce the scope or enforceability of, or invalidate, our patent rights, which could adversely affect our competitive position. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action. An unfavorable outcome could result in a loss of our current patent rights and could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms.

Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common shares.

In addition, if our product candidates are found to infringe the intellectual property rights of third parties, these third parties may assert infringement claims against our licensees and other parties with whom we have business relationships, and we may be required to indemnify those parties for any damages they suffer as a result of these claims. The claims may require us to initiate or defend protracted and costly litigation on behalf of licensees and other parties regardless of the merits of these claims. If any of these claims succeed, we may be forced to pay damages on behalf of those parties or may be required to obtain licenses for the products they use.

 

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Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees on any issued patent are due to be paid to the USPTO and foreign countries may require the payment of maintenance fees or patent annuities during the lifetime of a patent application and/or any subsequent patent that issues from the application. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process and following the issuance of a patent. While an inadvertent lapse, including due to the effect of the COVID-19 pandemic on us or our patent maintenance vendors, can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application. Such noncompliance can result in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. Such an event could have a material adverse effect on our business.

Any issued patents we own covering our product candidates could be narrowed or found invalid or unenforceable if challenged in court or before the administrative bodies in the United States or abroad, including the USPTO.

Any of our intellectual property rights could be challenged or invalidated despite measures we take to obtain patent and other intellectual property protection with respect to our product candidates and proprietary technology. For example, if we initiate legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product candidate, as applicable, is invalid and/or unenforceable. In patent litigation in the United States and in some other jurisdictions, defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, for example, lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld material information from the USPTO or the applicable foreign counterpart, or made a misleading statement, during prosecution. A litigant or the USPTO itself could challenge our patents on this basis even if we believe that we have conducted our patent prosecution in accordance with the duty of candor and in good faith. The outcome following such a challenge is unpredictable.

Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, inter partes review, post-grant review and equivalent proceedings in foreign jurisdictions (such as opposition proceedings). Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates.

The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our patent counsel and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, or if we are otherwise unable to adequately protect our rights, we would lose at least part, and perhaps all, of the patent protection on our product candidates. Such a loss of patent protection could have a material adverse impact on our business and our ability to commercialize or license our technology and product candidates. Even if a defendant does not prevail on a legal assertion of invalidity and/or unenforceability, our patent claims may be construed in a manner that would limit our ability to enforce such claims against the defendant and others. The cost of defending such a challenge, particularly in a foreign jurisdiction, and any resulting loss of patent protection could have a material adverse impact on one or more of our product candidates and our business. Any efforts to enforce our intellectual property rights are also likely to be costly and may divert the efforts of our scientific and management personnel.

 

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Changes to patent law in the United States and in foreign jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.

Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs, and may diminish our ability to protect our inventions, obtain, maintain, and enforce our intellectual property rights and, more generally, could affect the value of our intellectual property or narrow the scope of our owned and licensed patents. Patent reform legislation in the United States and other countries, including the Leahy-Smith America Invents Act (the Leahy-Smith Act), signed into law on September 16, 2011, could increase those uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications are prosecuted, redefine prior art and provide more efficient and cost-effective avenues for competitors to challenge the validity of patents. These include allowing third- party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings. Further, because of a lower evidentiary standard in these USPTO post-grant proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action. Thus, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

After March 2013, under the Leahy-Smith Act, the United States transitioned to a first inventor to file system in which, assuming that the other statutory requirements are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third-party was the first to invent the claimed invention. A third party that files a patent application in the USPTO after March 2013, but before we file an application covering the same invention, could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by such third party. This will require us to be cognizant going forward of the time from invention to filing of a patent application. Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we were the first to either (i) file any patent application related to our product candidates and other proprietary technologies we may develop or (ii) invent any of the inventions claimed in our or our licensor’s patents or patent applications. Even where we have a valid and enforceable patent, we may not be able to exclude others from practicing the claimed invention where the other party can show that they used the invention in commerce before our filing date or the other party benefits from a compulsory license. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Moreover, recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. We cannot predict how future decisions by the courts, Congress or the USPTO may impact the value of our patents. Changes in the laws and regulations governing patents in other jurisdictions could similarly have an adverse effect on our ability to obtain and effectively enforce our patent rights.

 

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We may not be able to protect our intellectual property rights throughout the world, and different jurisdictions may grant patent rights of differing scope.

Certain of our key patent families have been filed in the United States; however, we have less robust intellectual property rights outside the United States, and, in particular, we may not be able to pursue patent coverage of our product candidates in certain countries outside of the United States. Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States may be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to certain territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Most of our patent portfolio is at the very early stage. We will need to decide whether and in which jurisdictions to pursue protection for the various inventions in our portfolio prior to applicable deadlines. We may decide to abandon national and regional patent applications before they are granted. The examination of each national or regional patent application is an independent proceeding. As a result, patent applications in the same family may issue as patents in some jurisdictions, such as in the United States, but may issue as patents with claims of different scope or may be refused in other jurisdictions. It is also quite common that depending on the country, the scope of patent protection may vary for the same product or technology. For example, certain jurisdictions do not allow for patent protection with respect to method of treatment.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protections, particularly those relating to biopharmaceutical products. This difficulty with enforcing patents could make it difficult for us to stop the infringement of our patents or marketing of competing products otherwise generally in violation of our proprietary rights. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly, put our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Further, many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of its patents. If we are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position in the relevant jurisdiction may be impaired and our business prospects may be materially adversely affected.

We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.

We may be subject to claims that former employees, collaborators or other third parties have an interest in our patents or other intellectual property as an inventor or co-inventor. The failure to name the proper inventors on a patent application can result in the patents issuing thereon being unenforceable. Inventorship disputes may arise from conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent,

 

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conflicting obligations of third parties involved in developing our product candidates or as a result of questions regarding co-ownership of potential joint inventions. Litigation may be necessary to resolve these and other claims challenging inventorship and/or ownership. Alternatively, or additionally, we may enter into agreements to clarify the scope of our rights in such intellectual property. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Our future licensors may have relied on third-party consultants or collaborators or on funds from third parties, such as the U.S. government, such that our future licensors are not the sole and exclusive owners of the patents we in-licensed. If other third parties have ownership rights or other rights to our future in-licensed patents, they may be able to license such patents to our competitors, and our competitors could market competing products and technology. This could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

While it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. Such claims could have a material adverse effect on our business, financial condition, results of operations, and prospects.

We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information or alleged trade secrets of third parties or competitors or are in breach of non-competition or non-solicitation agreements with our competitors or their former employers.

We have received confidential and proprietary information from third parties. In addition, as is common in the biotechnology, medical device and pharmaceutical industries, we employ individuals and engage the services of consultants who were previously employed or engaged at other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although no claims against us are currently pending, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of these third parties or our employees’ former employers or our consultants’ or contractors’ current or former clients or customers. In addition, we may in the future be subject to claims that we caused an employee to breach the terms of his or her non-competition or non-solicitation agreement. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial cost and be a distraction to our management and employees. If we are not successful, in addition to paying monetary damages, we could lose access or exclusive access to valuable intellectual property rights or lose valuable personnel. Any litigation or the threat thereof may adversely affect our ability to hire employees. A loss of key personnel or their work product could hamper or prevent our ability to commercialize product candidates, which could have an adverse effect on our business, financial condition and results of operations.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our marks of interest and our business may be adversely affected.

We use and will continue to use registered and/or unregistered trademarks or trade names to brand and market ourselves and our products. Our trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. We rely on both registration and common law protection for our trademarks. We may not be able to protect our rights to these trademarks and trade names or

 

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may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest. During the trademark registration process, we may receive office actions from the USPTO objecting to the registration of our trademark. Although we would be given an opportunity to respond to those objections, we may be unable to overcome such rejections. In addition, in the USPTO and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and/or to seek the cancellation of registered trademarks. Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings. If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected. Additionally, we may license our trademarks and trade names to third parties, such as distributors. Though these license agreements may provide guidelines for how our trademarks and trade names may be used, a breach of these agreements or misuse of our trademarks and tradenames by our licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names.

Moreover, any name we have proposed to use with our product candidate in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark. Similar requirements exist in Europe. The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names. If the FDA (or an equivalent administrative body in a foreign jurisdiction) objects to any of our proposed proprietary product names, it may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA (or the relevant administrative body in a foreign jurisdiction). Furthermore, in many countries, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark.

Numerous factors may limit any potential competitive advantage provided by our intellectual property rights.

The degree of future protection afforded by our intellectual property rights, whether owned or in-licensed, is uncertain because intellectual property rights have limitations, and may not adequately protect our business, provide a barrier to entry against our competitors or potential competitors, or permit us to maintain our competitive advantage. Moreover, if a third party has intellectual property rights that cover the practice of our technology, we may not be able to fully exercise or extract value from our intellectual property rights. The following examples are illustrative:

 

   

pending patent applications that we own or license in the future may not lead to issued patents;

 

   

patents, should they issue, that we own or license in the future, may not provide us with any competitive advantages, or may be challenged and held invalid or unenforceable;

 

   

others may be able to develop and/or practice technology that is similar to our technology or aspects of our technology but that is not covered by the claims of any of our owned or future in-licensed patents, should any such patents issue;

 

   

third parties may compete with us in jurisdictions where we do not pursue and obtain patent protection;

 

   

we (or our future licensors) might not have been the first to make the inventions covered by a pending patent application that we own or license in the future;

 

   

we (or our future licensors) might not have been the first to file patent applications covering a particular invention;

 

   

others may independently develop similar or alternative technologies without infringing our intellectual property rights;

 

   

we may not be able to obtain and/or maintain necessary licenses on reasonable terms or at all;

 

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third parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights, or any rights at all, over that intellectual property;

 

   

we may not be able to maintain the confidentiality of our trade secrets or other proprietary information;

 

   

we may not develop or in-license additional proprietary technologies that are patentable; and

 

   

the patents of others may have an adverse effect on our business.

Should any of these events occur, they could materially harm our business and the results of our operation.

Risks Related to Alpha Tau’s Employee Matters and Managing Growth

In this section “we,” “us” and “our” refer to Alpha Tau.

We are highly dependent on our key personnel, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

Our ability to compete in the highly competitive biotechnology, medical device and pharmaceutical industries depends upon our ability to attract and retain highly qualified managerial, scientific and medical personnel. We are highly dependent on our management, scientific and medical personnel, including Uzi Sofer, our Chief Executive Officer. The loss of the services of any of our executive officers, other key employees and other scientific and medical advisors, and an inability to find suitable replacements, could result in delays in product development and harm our business.

We conduct the majority of our operations at our facility in Israel. The region is headquarters to many other biopharmaceutical and medical device companies and many academic and research institutions. Competition for skilled personnel in our market is intense and may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all. Changes to Israeli or similar immigration and work authorization laws and regulations, including those that restrain the flow of scientific and professional talent, can be significantly affected by political forces and levels of economic activity. Our business may be materially adversely affected if legislative or administrative changes to Israeli or similar foreign immigration or visa laws and regulations, including as a result of the restrictions on international travel due to the global COVID-19 pandemic, impair our hiring processes and goals or projects involving personnel who are not Israeli citizens.

To encourage valuable employees to remain at our company, in addition to salary and cash incentives, we have provided stock options that vest over time. The value to employees of stock options that vest over time may be significantly affected by movements in our share price that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies. Despite our efforts to retain valuable employees, members of our management, scientific and development teams may terminate their employment with us on short notice. Although we have employment agreements with our key employees, these employment agreements provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice. Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior, mid-level and senior managers as well as junior, mid-level and senior scientific and medical personnel.

We will need to grow the size of our organization, and we may experience difficulties in managing this growth.

As our development and commercialization plans and strategies develop, and as we transition into operating as a public company, we expect to need additional managerial, operational, sales, marketing, financial and other personnel, as well as additional facilities to expand our operations. Future growth would impose significant added responsibilities on members of management, including:

 

   

identifying, recruiting, integrating, maintaining and motivating additional employees;

 

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managing our internal development efforts effectively, including the clinical and FDA review process for our product candidate and the manufacturing infrastructure required to produce our product candidate, while complying with our contractual obligations to contractors and other third parties; and

 

   

improving our operational, financial and management controls, reporting systems and procedures.

Our future financial performance and our ability to commercialize our product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.

We currently rely, and for the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors and consultants to provide certain services, including certain aspects of regulatory approval, clinical trial management and construction of manufacturing facilities. There can be no assurance that the services of independent organizations, advisors and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements. In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval or certification of our Alpha DaRT technology or other future products or product candidates or otherwise advance our business. There can be no assurance that we will be able to manage our existing consultants or find other competent outside contractors and consultants on economically reasonable terms, or at all. If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, or we are not able to effectively build out new facilities to accommodate this expansion, we may not be able to successfully implement the tasks necessary to further develop and commercialize our product candidates and, accordingly, may not achieve our research, development and commercialization goals.

We may explore strategic collaborations that may never materialize or we may be required to relinquish important rights to and control over the development and commercialization of our product candidates to any future collaborators.

Our business strategy includes broadening our platform by potentially exploring strategic partnerships that maximize the potential of our Alpha DaRT technology. As a result, we intend to periodically explore a variety of possible strategic partnerships in an effort to gain access to additional resources, indications or combination therapy opportunities, or development of supportive or complementary products. These strategic partnerships may include partnerships with large strategic partners. At the current time however, we cannot predict what form such a strategic collaboration might take. We are likely to face significant competition in seeking appropriate strategic collaborators, and strategic collaborations can be complicated and time consuming to negotiate and document. We may not be able to negotiate strategic collaborations on acceptable terms, if at all. If and when we collaborate with a third party for development and commercialization of a product candidate, we can expect to relinquish some or all of the control over the future success of our Alpha DaRT technology to the third party. We are unable to predict when, if ever, we will enter into any strategic partnerships because of the numerous risks and uncertainties associated with establishing them, including:

 

   

expenditure of substantial operational, financial and management resources;

 

   

dilutive issuances of our securities;

 

   

substantial actual or contingent liabilities; and

 

   

termination or expiration of the arrangement, which would delay the development and may increase the cost of developing our Alpha DaRT technology.

Strategic partners may also delay clinical trials, experience financial difficulties, provide insufficient funding, terminate a clinical trial or abandon an indication or combination therapy, which could negatively

 

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impact our development efforts. Additionally, strategic partners may not properly maintain, enforce or defend our intellectual property rights or may use our proprietary information in a manner that could jeopardize or invalidate our proprietary information or expose us to potential litigation, any of which could adversely affect our business, financial position and operations.

Our internal computer systems, or those of any of our existing or potential future collaborators, trial sites, CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

Despite the implementation of security measures, our internal computer systems and those of our current and any future trial sites, CROs and other contractors, consultants and collaborators are vulnerable to damage from cyberattacks, “phishing” attacks, computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. As a result of the COVID-19 pandemic, we may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees and collaborators who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs, whether due to a loss of our trade secrets or other similar disruptions. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our efforts to obtain marketing authorization or certification and significantly increase our costs to recover or reproduce the data. In addition, such a breach may require notification to governmental agencies, the media or individuals pursuant to applicable data privacy and security law and regulations. We would also be exposed to a risk of loss, including financial assets or litigation and potential liability, which could materially adversely affect our business, financial condition, results of operations and prospects. We also rely on third parties to manufacture our product candidates, and similar events relating to their computer systems could also have a material adverse effect on our business. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidates could be delayed.

If our security measures are breached or unauthorized access to individually identifiable health information or other personally identifiable information is otherwise obtained, our reputation may be harmed, and we may incur significant liabilities.

Unauthorized access to, or security breaches of, our systems and databases could result in unauthorized access to data and information and loss, compromise or corruption of such data and information. Present and future trial sites, CROs, contractors and consultants also could experience breaches of security leading to the exposure of confidential and sensitive information. Such breaches of security could be caused by computer hacking, phishing attacks, ransomware, dissemination of computer viruses, worms and other destructive or disruptive software, denial of service attacks, and other malicious activity, which may be heretofore unknown. The number and complexity of these threats continue to increase over time.

Most healthcare providers, including research institutions from which we obtain patient health information, are subject to privacy and security regulations promulgated under HIPAA, as amended by the HITECH. We are not currently classified as a covered entity or business associate under HIPAA and thus are not directly subject to its requirements or penalties. However, any person may be prosecuted under HIPAA’s criminal provisions either directly or under aiding-and-abetting or conspiracy principles. Consequently, depending on the facts and circumstances, we could face substantial criminal penalties if we knowingly receive individually identifiable

 

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health information from a HIPAA-covered healthcare provider or research institution that has not satisfied HIPAA’s requirements for disclosure of individually identifiable health information. In addition, we may in the future maintain sensitive personally identifiable information, including health information, that we receive throughout the clinical trial process, in the course of our research collaborations, and directly from individuals (or their healthcare providers) who enroll in our patient assistance programs. As such, we may be subject to state laws requiring notification of affected individuals and state regulators in the event of a breach of personal information, which is a broader class of information than the health information protected by HIPAA.

Furthermore, certain health privacy laws, data breach notification laws, consumer protection laws and genetic testing laws may apply directly to our operations and/or those of our collaborators and may impose restrictions on our collection, use and dissemination of individuals’ health information. Patients about whom we or our collaborators obtain health information, as well as the providers who share this information with us, may have statutory or contractual rights that limit our ability to use and disclose the information. We may be required to expend significant capital and other resources to ensure ongoing compliance with applicable privacy and data security laws. Claims that we have violated individuals’ privacy rights or breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.

In the event of a security breach, our company could suffer loss of business, severe reputational damage adversely affecting investor confidence, regulatory investigations and orders, litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations, significant costs for remediation and other liabilities. For example, the loss of preclinical study or clinical trial data from completed or future preclinical studies or clinical trials could result in delays in our efforts to obtain marketing authorization or certification and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidates could be delayed.

We have incurred and expect to incur significant expenses to prevent security breaches, including costs related to deploying additional personnel and protection technologies, training employees, and engaging third-party solution providers and consultants. Although we expend significant resources to create security protections that shield our data against potential theft and security breaches, such measures cannot provide absolute security. Moreover, given that we have outsourced our information systems to vendors and rely on cloud-based information systems, we face related security risks which require us to expend resources to protect our technology and information systems.

Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.

Our operations, and those of our CROs, CMOs and other contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. Our ability to obtain clinical supplies of our product candidates could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption.

We are an international business, and we are exposed to various global risks that could have a material adverse effect on our financial condition and results of operations.

As an international business, which operates in multiple jurisdictions, we are exposed to trends and financial risks of international markets, and are also required to comply with varying legal and regulatory requirements in

 

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such multiple jurisdictions. Profitability from international operations may be limited by risks and uncertainties related to regional and global economic conditions, regulatory clearances, approvals or certifications and reimbursement approvals, and our ability to implement our overall business strategy in various jurisdictions. We expect these risks will increase as we pursue our strategy to expand operations into new geographic markets. We may not succeed in developing and implementing effective policies and strategies in each location where we conduct business. Any failure to do so may harm our business, results of operations and financial condition.

International sales and operations are subject to a variety of risks, including:

 

   

foreign currency exchange rate fluctuations;

 

   

potential adverse changes in laws and regulatory practices, including export license requirements, trade barriers, tariffs and tax laws;

 

   

burdens and costs of compliance with a variety of foreign laws;

 

   

foreign tax laws and potential increased costs associated with overlapping tax structures;

 

   

greater difficulty in staffing and managing foreign operations;

 

   

greater risk of uncollectible accounts;

 

   

longer collection cycles;

 

   

logistical and communications challenges;

 

   

changes in labor conditions;

 

   

political and economic instability, including, without limitation, due to natural disasters or other catastrophic events, such as terrorist attacks, pandemic diseases, such as the ongoing COVID-19 pandemic, hurricanes, fire, floods, pollution and earthquakes;

 

   

greater difficulty in protecting intellectual property;

 

   

the risk of third-party disputes over ownership of intellectual property and infringement of third-party intellectual property by Our Products; and

 

   

general economic and political conditions in these foreign markets.

International markets are also affected by economic pressure to contain reimbursement levels and healthcare costs. Profitability from international operations may be limited by risks and uncertainties related to regional economic conditions, regulatory clearances and approvals and reimbursement approvals, competing products, infrastructure development, intellectual property rights protection and our ability to implement our overall business strategy. We expect these risks will increase as we pursue our strategy to expand operations into new geographic markets. We may not succeed in developing and implementing effective policies and strategies in each location where we conduct business. Any failure to do so may harm our business, results of operations and financial condition.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.

We face an inherent risk of product liability as a result of the planned clinical testing of our product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if our Alpha DaRT technology or any future products or product candidates we develop, cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical trials, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product (which may include inherent dangers in the use of radioactive materials), negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer

 

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protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

 

   

decreased demand for our Alpha DaRT technology or any future products or product candidates we develop that we may develop;

 

   

injury to our reputation;

 

   

withdrawal of clinical trial participants;

 

   

initiation of investigations by regulators;

 

   

costs to defend the related litigation;

 

   

a diversion of management’s time and our resources;

 

   

substantial monetary awards to trial participants or patients;

 

   

product recalls, withdrawals or labeling, marketing or promotional restrictions;

 

   

loss of revenue;

 

   

exhaustion of any available insurance and our capital resources; the inability to commercialize our Alpha DaRT technology or any future products or product candidates we develop; and

 

   

a decline in our share price.

Failure to obtain or retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop, alone or with corporate collaborators. Although we have clinical trial insurance, our insurance policies also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.

The increasing use of social media platforms presents new risks and challenges.

Social media is increasingly being used to communicate about our clinical development programs for our Alpha DaRT technology and the diseases our technology is being developed to treat, and we intend to utilize appropriate social media in connection with our commercialization efforts following marketing authorization or certification of our Alpha DaRT technology or other future products or product candidates, if any. Social media practices in the medical device, biotechnology and biopharmaceutical industries continue to evolve and regulations and regulatory guidance relating to such use are evolving and not always clear. This evolution creates uncertainty and risk of noncompliance with regulations applicable to our business, resulting in potential regulatory actions against us, along with the potential for litigation related to off-label marketing or other prohibited activities and heightened scrutiny by the FDA, the SEC and other regulators. For example, patients may use social media channels to comment on their experience in a future blinded clinical trial or to report an alleged adverse event. If such disclosures occur, there is a risk that trial enrollment may be adversely impacted, that we may fail to monitor and comply with applicable adverse event reporting obligations or that we may not be able to defend our business or the public’s legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about our Alpha DaRT technology or other future products or product candidates. There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or comments about us on any social networking website. In addition, we may encounter attacks on social media regarding our company, management, our Alpha DaRT technology or other future products or product candidates. If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions or incur other harm to our business.

 

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Our business could be disrupted by catastrophic events.

Occurrence of any catastrophic event, including a global pandemic like the ongoing COVID-19 pandemic, earthquake, fire, flood, tsunami or other weather event, power loss, telecommunications failure, software or hardware malfunction, cyber-attack, war or terrorist attack, explosion or pandemic could impact our business. Our insurance coverage may not compensate us for losses that may occur in the event of an earthquake or other significant natural disaster. If any disaster were to occur, our ability to operate our business at our facilities could be impaired and we could incur significant losses, require substantial recovery time and experience significant expenditures in order to resume operations. If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster and to execute successfully on those plans in the event of a disaster or emergency, our business would be harmed.

Risks Related to Being a Public Company

In this section “we,” “us” and “our” refer to Alpha Tau.

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

Upon the completion of the Business Combination, we will become a public company subject to reporting requirements in the United States, and will incur significant legal, accounting and other expenses that we did not incur as a private company, and these expenses may increase even more after we are no longer an emerging growth company, as defined in Section 2(a) of the Securities Act. As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules adopted, and to be adopted, by the SEC and Nasdaq. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, we expect these rules and regulations to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. The increased costs will increase our net loss. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be forced to accept reduced policy limits or incur substantially higher costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

A market for our securities may not develop or be sustained, which would adversely affect the liquidity and price of our securities.

Following the Business Combination, the price of our securities may fluctuate significantly due to the market’s reaction to the Business Combination and general market and economic conditions. An active trading market for our securities following the Business Combination may never develop or, if developed, it may not be sustained. In addition, the price of our securities after the Business Combination can vary due to general economic conditions and forecasts, HCCC’s general business condition and the release of HCCC’s financial reports. Additionally, if our securities become delisted from Nasdaq and are quoted on the OTC Bulletin Board (an inter-dealer automated quotation system for equity securities that is not a national securities exchange) or the combined company’s securities are not listed on Nasdaq and are quoted on the OTC Bulletin Board, the liquidity and price of our securities may be more limited than if we were quoted or listed on the NYSE, Nasdaq or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

 

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Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.

After the Business Combination, the combined company will carry out our business and will be subject to the reporting requirements of the Securities Act, the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of Nasdaq. We expect that the requirements of these rules and regulations will continue to increase its legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly, and place significant strain on its personnel, systems and resources.

The applicable provisions of the Sarbanes-Oxley Act require, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure controls, internal control over financial reporting and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.

Our current controls and any new controls that it develops may become inadequate because of changes in conditions in its business. Further, weaknesses in our internal controls may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could adversely affect our operating results or cause us to fail to meet its reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal controls also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that it is required to include in its periodic reports we will file with the SEC under Section 404 of the Sarbanes-Oxley Act. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information.

In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended and anticipates that it will continue to expend significant resources, including accounting-related costs, and provide significant management oversight. Any failure to maintain the adequacy of our internal controls, or consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs and could materially and adversely affect our ability to operate our business. In the event that our internal controls are perceived as inadequate or that we are unable to produce timely or accurate financial statements, investors may lose confidence in our operating results and the share price of the combined company could decline. In addition, if we are unable to continue to meet these requirements, the combined company may not be able to obtain or maintain listing on Nasdaq.

The combined company’s independent registered public accounting firm is not required to formally attest to the effectiveness of its internal control over financial reporting until after the combined company is no longer an emerging growth company. At such time, the combined company’s independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on the combined company’s business and operating results.

Risks Related to Ownership of the Combined Company’s Shares

The Alpha Tau Articles and Israeli law could prevent a takeover that shareholders consider favorable and could also reduce the market price of Alpha Tau ordinary shares.

Certain provisions of Israeli law and the Alpha Tau Articles could have the effect of delaying or preventing a change in control and may make it more difficult for a third party to acquire Alpha Tau or for Alpha Tau’s

 

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shareholders to elect different individuals to its board of directors, even if doing so would be beneficial to its shareholders, and may limit the price that investors may be willing to pay in the future for the Alpha Tau ordinary shares. Among other things:

 

   

Israeli corporate law regulates mergers and requires that a tender offer be effected when more than a specified percentage of shares in a company are purchased;

 

   

Israeli corporate law requires special approvals for certain transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions;

 

   

Israeli corporate law does not provide for shareholder action by written consent for public companies, thereby requiring all shareholder actions to be taken at a general meeting of shareholders;

 

   

the Alpha Tau Articles divide the Alpha Tau directors into three classes, each of which is elected once every three years;

 

   

the Alpha Tau Articles generally require a vote of the holders of a majority of the Alpha Tau outstanding ordinary shares entitled to vote present and voting on the matter at a general meeting of shareholders (referred to as simple majority), and the amendment of a limited number of provisions, such as the provision empowering the Alpha Tau board of directors to determine the size of the board, the provision dividing the Alpha Tau directors into three classes, the provision that sets forth the procedures and the requirements that must be met in order for a shareholder to require the Company to include a matter on the agenda for a general meeting of the shareholders and the provisions relating to the election and removal of members of the Alpha Tau board of directors and empowering the Alpha Tau board of directors to fill vacancies on the board, require a vote of the holders of 65% of the Alpha Tau outstanding ordinary shares entitled to vote at a general meeting;

 

   

the Alpha Tau Articles do not permit a director to be removed except by a vote of the holders of at least 65% of the Alpha Tau outstanding shares entitled to vote at a general meeting of shareholders; and

 

   

the Alpha Tau Articles provide that director vacancies may be filled by the Alpha Tau board of directors.

Furthermore, under the Encouragement of Research, Development and Technological Innovation in the Industry Law 5744-1984 (formerly known as the Law for the Encouragement of Research and Development in Industry 5744-1984), and the regulations and guidelines promulgated thereunder, or the Innovation Law, to which Alpha Tau is subject due to its receipt of grants from the Israel Innovation Authority, or IIA (formerly known as the Office of the Chief Scientist of the Ministry of Economy and Industry, or the OCS), a recipient of IIA grants such as Alpha Tau must report to the IIA regarding any change of control of the company or regarding any change in the holding of the means of control of the company which results in any non-Israeli citizen or entity becoming an “interested party”, as defined in the Innovation Law, in the company, and in the latter event, the non-Israeli citizen or entity will be required to execute an undertaking in favor of IIA, in a form prescribed by IIA, acknowledging the restrictions imposed by such law and agreeing to abide by its terms.

Further, Israeli tax considerations may make potential transactions undesirable to Alpha Tau or to some of its shareholders whose country of residence does not have a tax treaty with Israel granting tax relief to such shareholders from Israeli tax. See the section titled “Certain Material Israeli Tax Considerations—Taxation of Alpha Tau shareholders.”

Alpha Tau does not intend to pay dividends for the foreseeable future. Accordingly, you may not receive any return on investment unless you sell your Alpha Tau ordinary shares for a price greater than the price you paid for the HCCC Common Stock.

Alpha Tau has never declared or paid any cash dividends on its shares. It currently intends to retain all available funds and any future earnings for use in the operation of its business and does not anticipate paying any dividends on the Alpha Tau ordinary shares in the foreseeable future. Consequently, you may be unable to realize a gain on your investment except by selling such shares after price appreciation, which may never occur.

 

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Alpha Tau’s board of directors has sole discretion whether to pay dividends. If Alpha Tau’s board of directors decides to pay dividends, the form, frequency, and amount will depend upon its future, operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that its directors may deem relevant. The Israeli Companies Law, 1999 (the “Companies Law”) imposes restrictions on Alpha Tau’s ability to declare and pay dividends. See the section titled “Description of Alpha Tau ordinary shares—Dividend and Liquidation Rights” for additional information. Payment of dividends may also be subject to Israeli withholding taxes. See the section titled “Certain Material Israeli Tax Considerations” for additional information.

The Alpha Tau ordinary shares and Alpha Tau warrants may not be listed on a national securities exchange after the Business Combination, which could limit investors’ ability to make transactions in such securities and subject Alpha Tau to additional trading restrictions.

Alpha Tau intends to apply to have the Alpha Tau ordinary shares and Alpha Tau warrants approved for listing on Nasdaq after the consummation of the Business Combination. Alpha Tau will be required to meet certain initial listing requirements to be listed. Alpha Tau may not be able to meet the initial listing requirements in connection with the Business Combination. Further, even if the Alpha Tau ordinary shares and Alpha Tau warrants are so listed, Alpha Tau may be unable to maintain the listing of such securities in the future. If Alpha Tau fails to meet the initial listing requirements and Nasdaq does not list the Alpha Tau ordinary shares and Alpha Tau warrants (and the related closing condition with respect to the listing of the Alpha Tau ordinary shares is waived by the parties), Alpha Tau could face significant material adverse consequences, including:

 

   

a limited availability of market quotations for the Alpha Tau ordinary shares and Alpha Tau warrants;

 

   

a reduced level of trading activity in the secondary trading market for the Alpha Tau ordinary shares and Alpha Tau warrants;

 

   

a limited amount of news and analyst coverage for Alpha Tau;

 

   

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

 

   

Alpha Tau’s securities would not be “covered securities” under the National Securities Markets Improvement Act of 1996, which is a federal statute that prevents or pre-empts the states from regulating the sale of certain securities, including securities listed on Nasdaq, in which case Alpha Tau’s securities would be subject to regulation in each state where Alpha Tau offers and sells securities.

The market price and trading volume of the Alpha Tau ordinary shares may be volatile and could decline significantly following the Business Combination.

The stock markets, including Nasdaq on which Alpha Tau intends to list the Alpha Tau ordinary shares and Alpha Tau warrants to be issued in the Business Combination under the symbol “DRTS,” and “DRTSW,” respectively, have from time to time experienced significant price and volume fluctuations. Even if an active, liquid and orderly trading market develops and is sustained for the Alpha Tau ordinary shares and Alpha Tau warrants following the Business Combination, the market price of the Alpha Tau ordinary shares and Alpha Tau warrants ordinary shares may be volatile and could decline significantly. In addition, the trading volume in the Alpha Tau ordinary shares and Alpha Tau warrants may fluctuate and cause significant price variations to occur. If the market price of the Alpha Tau ordinary shares and Alpha Tau warrants ordinary shares declines significantly, you may be unable to resell your shares or warrants at or above the market price of the ordinary shares Alpha Tau ordinary shares and Alpha Tau warrants as of the date immediately following the consummation of the Business Combination. Alpha Tau and HCCC cannot assure you that the market price of the Alpha Tau ordinary shares and Alpha Tau warrants ordinary shares will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following:

 

   

the realization of any of the risk factors presented in this proxy statement/prospectus;

 

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additions and departures of key personnel;

 

   

failure to comply with the requirements of Nasdaq;

 

   

failure to comply with the Sarbanes-Oxley Act or other laws or regulations;

 

   

future issuances, sales, resales or repurchases or anticipated issuances, sales, resales or repurchases, of HCCC’s securities including due to the expiration of contractual lock-up agreements;

 

   

publication of research reports about Alpha Tau;

 

   

the performance and market valuations of other similar companies;

 

   

new laws, regulations, subsidies, or credits or new interpretations of existing laws applicable to Alpha Tau;

 

   

commencement of, or involvement in, litigation involving Alpha Tau;

 

   

broad disruptions in the financial markets, including sudden disruptions in the credit markets;

 

   

speculation in the press or investment community;

 

   

actual, potential or perceived control, accounting or reporting problems;

 

   

changes in accounting principles, policies and guidelines; and

 

   

other events or factors, including those resulting from infectious diseases, health epidemics and pandemics (including the ongoing COVID-19 public health emergency), natural disasters, war, acts of terrorism or responses to these events.

In the past, securities class-action litigation has often been instituted against companies following periods of volatility in the market price of their shares. This type of litigation could result in substantial costs and divert HCCC’s management’s attention and resources, which could have a material adverse effect on us.

Alpha Tau’s quarterly operating results may fluctuate significantly and could fall below the expectations of securities analysts and investors due to seasonality and other factors, some of which are beyond its control, resulting in a decline in its stock price.

Alpha Tau’s quarterly operating results may fluctuate significantly because of several factors, including:

 

   

labor availability and costs for hourly and management personnel;

 

   

profitability of Alpha Tau’s products, especially in new markets and due to seasonal fluctuations;

 

   

changes in interest rates;

 

   

impairment of long-lived assets;

 

   

macroeconomic conditions, both internationally and locally;

 

   

changes in competitive conditions;

 

   

expansion to new markets; and

 

   

fluctuations in commodity prices.

If, following the Business Combination, securities or industry analysts do not publish or cease publishing research or reports about Alpha Tau, its business, or its market, or if they change their recommendations regarding the Alpha Tau ordinary shares adversely, then the price and trading volume of the Alpha Tau ordinary shares could decline.

The trading market for the Alpha Tau ordinary shares will be influenced by the research and reports that industry or financial analysts publish about its business. Alpha Tau does not control these analysts, or the content

 

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and opinions included in their reports. As a new public company, Alpha Tau may be slow to attract research coverage and the analysts who publish information about the Alpha Tau ordinary shares will have had relatively little experience with Alpha Tau, which could affect their ability to accurately forecast Alpha Tau’s results and make it more likely that Alpha Tau fails to meet their estimates. In the event Alpha Tau obtains industry or financial analyst coverage, if any of the analysts who cover Alpha Tau issues an inaccurate or unfavorable opinion regarding it, Alpha Tau’s share price would likely decline. If one or more of these analysts cease coverage of Alpha Tau or fail to publish reports on it regularly, Alpha Tau’s visibility in the financial markets could decrease, which in turn could cause its share price or trading volume to decline.

Alpha Tau’s failure to meet the continued listing requirements of Nasdaq could result in a delisting of its Securities.

If, after listing, Alpha Tau fails to satisfy the continued listing requirements of Nasdaq such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist its securities. Such a delisting would likely have a negative effect on the price of the securities and would impair your ability to sell or purchase the securities when you wish to do so. In the event of a delisting, Alpha Tau can provide no assurance that any action taken by it to restore compliance with listing requirements would allow its securities to become listed again, stabilize the market price or improve the liquidity of its securities, prevent its securities from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements. Additionally, if Alpha Tau’s securities are not listed on, or become delisted from, Nasdaq for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of Alpha Tau’s securities may be more limited than if it were quoted or listed on Nasdaq or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

Alpha Tau will be eligible to be treated as an emerging growth company, as defined in the Securities Act, and Alpha Tau cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make the Alpha Tau ordinary shares less attractive to investors because Alpha Tau may rely on these reduced disclosure requirements.

Alpha Tau will qualify as an emerging growth company within the meaning of the Securities Act, and if Alpha Tau takes advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make Alpha Tau’s securities less attractive to investors and may make it more difficult to compare Alpha Tau’s performance with other public companies.

Alpha Tau is eligible to be treated as an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised financial accounting standards until such time as those standards apply to private companies. Alpha Tau intends to take advantage of this extended transition period under the JOBS Act for adopting new or revised financial accounting standards.

For as long as Alpha Tau continues to be an emerging growth company, it may also take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including presenting only limited selected financial data and not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. As a result, its shareholders may not have access to certain information that they may deem important. Alpha Tau could be an emerging growth company for up to five years, although circumstances could cause it to lose that status earlier, including if its total annual gross revenue exceeds $1.07 billion, if it issues more than $1.0 billion in non-convertible debt securities during any three-year period, or if before that time it is a “large accelerated filer” under U.S. securities laws.

Alpha Tau cannot predict if investors will find Alpha Tau ordinary shares less attractive because it may rely on these exemptions. If some investors find Alpha Tau ordinary shares less attractive as a result, there may be a

 

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less active trading market for Alpha Tau ordinary shares and Alpha Tau’s share price may be more volatile. Further, there is no guarantee that the exemptions available to Alpha Tau under the JOBS Act will result in significant savings. To the extent that Alpha Tau chooses not to use exemptions from various reporting requirements under the JOBS Act, it will incur additional compliance costs, which may impact Alpha Tau’s financial condition.

Alpha Tau will be a foreign private issuer and, as a result, it will not be subject to U.S. proxy rules and will be subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.

Upon the closing of the Business Combination, Alpha Tau will report under the Exchange Act as a non-U.S. company with foreign private issuer status. Because Alpha Tau qualifies as a foreign private issuer under the Exchange Act, it is exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (1) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act, (2) the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time and (3) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, although it is subject to Israeli laws and regulations with regard to certain of these matters and intend to furnish comparable quarterly information on Form 6-K. In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year and U.S. domestic issuers that are large accelerated filers are required to file their annual report on Form 10-K within 60 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation FD, which is intended to prevent issuers from making selective disclosures of material information. As a result of all of the above, you may not have the same protections afforded to shareholders of a company that is not a foreign private issuer.

Alpha Tau may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses.

As discussed above, Alpha Tau is a foreign private issuer, and therefore is not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to Alpha Tau on June 30, 2022. In the future, Alpha Tau would lose its foreign private issuer status if (1) more than 50% of its outstanding voting securities are owned by U.S. residents and (2) a majority of its directors or executive officers are U.S. citizens or residents, or it fails to meet additional requirements necessary to avoid loss of foreign private issuer status. If Alpha Tau loses its foreign private issuer status, it will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. Alpha Tau would also have to mandatorily comply with U.S. federal proxy requirements, and its officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, it would lose its ability to rely upon exemptions from certain corporate governance requirements under the listing rules of Nasdaq. As a U.S. listed public company that is not a foreign private issuer, Alpha Tau would incur significant additional legal, accounting and other expenses that it will not incur as a foreign private issuer.

As Alpha Tau will be a “foreign private issuer” and intends to follow certain home country corporate governance practices, its shareholders may not have the same protections afforded to shareholders of companies that are subject to all Nasdaq corporate governance requirements.

As a foreign private issuer, following the closing of the Business Combination, Alpha Tau will have the option to follow certain home country corporate governance practices rather than those of Nasdaq, provided that

 

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it discloses the requirements it is not following and describes the home country practices it is following. Alpha Tau intends to rely on this “foreign private issuer exemption” with respect to the Nasdaq rules for shareholder meeting quorums and Nasdaq rules requiring shareholder approval. Alpha Tau may in the future elect to follow home country practices with regard to other matters. As a result, its shareholders may not have the same protections afforded to shareholders of companies that are subject to all Nasdaq corporate governance requirements.

The Alpha Tau Articles will provide that unless Alpha Tau consents to an alternate forum, the federal district courts of the United States shall be the exclusive forum of resolution of any claims arising under the Securities Act.

The Alpha Tau Articles will provide that, unless Alpha Tau consents in writing to the selection of an alternative forum, the federal district courts of the United States shall be the sole and exclusive forum for any claim asserting a cause of action arising under the Securities Act (for the avoidance of any doubt, such provision does not apply to any claim asserting a cause of action arising under the Exchange Act). Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both U.S. state and federal courts have jurisdiction to entertain such claims. This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with Alpha Tau or our directors, officers or other employees and may increase the costs associated with such lawsuits, which may discourage such lawsuits against Alpha Tau and our directors, officers and employees. Alternatively, if a court were to find these provisions of the Alpha Tau Articles inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, Alpha Tau may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect Alpha Tau’s business and financial condition. Any person or entity purchasing or otherwise acquiring any interest in Alpha Tau’s share capital shall be deemed to have notice of and to have consented to the choice of forum provisions of the Alpha Tau Articles described above. This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction.

The listing of Alpha Tau securities on Nasdaq will not benefit from the process undertaken in connection with an underwritten initial public offering, which could result in diminished investor demand, inefficiencies in pricing and a more volatile public price for Alpha Tau’s securities.

Alpha Tau will apply to list the Alpha Tau ordinary shares and Alpha Tau warrants on Nasdaq under the symbols “DRTS” and “DRTSW,” respectively, to be effective at the Closing. Unlike an underwritten initial public offering of the Alpha Tau securities, the initial listing of Alpha Tau’s securities as a result of the Business Combination will not benefit from the following:

 

   

the book-building process undertaken by underwriters that helps to inform efficient price discovery with respect to opening trades of newly listed securities;

 

   

underwriter support to help stabilize, maintain or affect the public price of the new issue immediately after listing; and

 

   

underwriter due diligence review of the offering and potential liability for material misstatements or omissions of fact in a prospectus used in connection with the securities being offered or for statements made by its securities analysts or other personnel.

Underwriters have liability under the U.S. securities laws for material misstatements or omissions in a registration statement pursuant to which an issuer sells securities. Section 11 of the Securities Act (“Section 11”) imposes liability on parties, including underwriters, involved in a securities offering if the registration statement contains a materially false statement or material omission. To effectively establish a due diligence defense against a cause of action brought pursuant to Section 11, a defendant, including an underwriter, carries the burden of proof to demonstrate that he or she, after reasonable investigation, believed that the statements in the

 

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registration statement were true and free of material omissions. In order to meet this burden of proof, underwriters in a registered offering typically conduct extensive due diligence of the registrant and vet the registrant’s disclosure. Due diligence entails engaging legal, financial and/or other experts to perform an investigation as to the accuracy of an issuer’s disclosure regarding, among other things, its business, prospects and financial results. In making their investment decision, investors have the benefit of such diligence in underwritten public offerings. HCCC’s investors must rely on the information in this proxy statement/prospectus and will not have the benefit of an independent review and investigation of the type normally performed by an independent underwriter in a public securities offering. While sponsors, private investors and management in a business combination undertake a certain level of due diligence, it is not necessarily the same level of due diligence undertaken by an underwriter in a public securities offering and, therefore, there could be a heightened risk of an incorrect valuation of Alpha Tau’s business or material misstatements or omissions in this proxy statement/prospectus.

In addition, because there are no underwriters engaged in connection with the Transactions, prior to the opening of trading on the trading day immediately following the Closing Date, there will be no traditional “roadshow” or book building process, and no price at which underwriters initially sold shares to the public to help inform efficient and sufficient price discovery with respect to the initial post-closing trades. Therefore, buy and sell orders submitted prior to and at the opening of initial post-closing trading of Alpha Tau’s securities will not have the benefit of being informed by a published price range or a price at which the underwriters initially sold shares to the public, as would be the case in an underwritten initial public offering. There will be no underwriters assuming risk in connection with an initial resale of Alpha Tau’s securities or helping to stabilize, maintain or affect the public price of Alpha Tau’s securities following the closing. Moreover, neither Alpha Tau nor HCCC will engage in, nor will they, directly or indirectly, request financial advisors to engage in, any special selling efforts or stabilization or price support activities in connection with the Alpha Tau’s securities that will be outstanding immediately following the closing. In addition, since Alpha Tau’s will become public through a merger, securities analysts of major brokerage firms may not provide coverage of Alpha Tau since there is no incentive to brokerage firms to recommend the purchase of its ordinary shares. No assurance can be given that brokerage firms will, in the future, want to conduct any offerings on Alpha Tau’s behalf. All of these differences from an underwritten public offering of Alpha Tau’s securities could result in a more volatile price for the Alpha Tau’s securities.

In addition, the Sponsor, certain members of HCCC’s board of directors and its officers, as well as their respective affiliates and permitted transferees, have interests in the Transactions that are different from or are in addition to those of holders of HCCC’s or Alpha Tau’s securities following completion of the Proposed Transactions, and that would not be present in an underwritten public offering of Alpha Tau’s securities. Such interests may have influenced the board of directors of HCCC in making their recommendation that HCCC shareholders vote in favor of the approval of the Business Combination Proposal and the other proposals described in this proxy statement/prospectus. See the section entitled “Proposal One —The Business Combination Proposal —Interests of Certain Persons in the Business Combination.”

Such differences from an underwritten public offering may present material risks to unaffiliated investors that would not exist if Alpha Tau became a publicly listed company through an underwritten initial public offering instead of upon completion of the merger. Further, the lack of such processes in connection with the listing of Alpha Tau’s securities could result in diminished investor demand, inefficiencies in pricing and a more volatile public price for Alpha Tau’s securities during the period immediately following the listing than in connection with an underwritten initial public offering.

Risks Related to Alpha Tau’s Incorporation and Location in Israel

Conditions in Israel could materially and adversely affect Alpha Tau’s business.

Many of Alpha Tau’s employees, including certain management members operate from its offices that are located in Jerusalem, Israel. In addition, a number of Alpha Tau’s officers and directors are residents of Israel.

 

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Accordingly, political, economic, and military conditions in Israel and the surrounding region may directly affect Alpha Tau’s business and operations. Recently, there has been an unprecedented degree of political instability in Israel, with four sets of elections for the Israeli parliament, or Knesset, in a two-year period. While a new government was formed in June 2021, there is no guarantee that it will last for a significant portion of its full four-year term and provide political stability. On the military front, in recent years, Israel has been engaged in sporadic armed conflicts with Hamas, an Islamist terrorist group that controls the Gaza Strip, with Hezbollah, an Islamist terrorist group that controls large portions of southern Lebanon, and with Iranian-backed military forces in Syria. In addition, Iran has threatened to attack Israel and may be developing nuclear weapons. Some of these hostilities were accompanied by missiles being fired from the Gaza Strip, Lebanon and Syria against civilian targets in various parts of Israel, including areas in which Alpha Tau’s employees are located, which negatively affected business conditions in Israel. Any hostilities involving Israel, regional political instability or the interruption or curtailment of trade between Israel and its trading partners could materially and adversely affect Alpha Tau’s operations and results of operations.

Alpha Tau’s commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, Alpha Tau cannot assure you that this government coverage will be maintained or that it will sufficiently cover Alpha Tau’s potential damages. Any losses or damages incurred by Alpha Tau could have a material adverse effect on its business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm Alpha Tau’s results of operations.

Further, in the past, the State of Israel and Israeli companies have been subjected to economic boycotts. Several countries still restrict business with the State of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on Alpha Tau’s results of operations, financial condition or the expansion of its business. A campaign of boycotts, divestment, and sanctions has been undertaken against Israel, which could also adversely affect Alpha Tau’s business. Actual or perceived political instability in Israel or any negative changes in the political environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, Alpha Tau’s business, financial condition, results of operations, and prospects.

In addition, many Israeli citizens are obligated to perform several weeks of annual military reserve duty each year until they reach the age of 40 (or older, for reservists who are military officers or who have certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists. It is possible that there will be military reserve duty call-ups in the future. Alpha Tau’s operations could be disrupted by such call-ups, which may include the call-up of members of its management. Such disruption could materially adversely affect its business, prospects, financial condition, and results of operations.

Alpha Tau may become subject to claims for remuneration or royalties for assigned service invention rights by Alpha Tau’s employees, which could result in litigation and adversely affect Alpha Tau’s business.

A significant portion of Alpha Tau’s intellectual property has been developed by its employees in the course of their employment by Alpha Tau. Under the Israeli Patents Law, 5727-1967 (the “Patents Law”), inventions conceived by an employee during and as a result of his or her employment with a company are regarded as “service inventions,” which belong to the employer, absent an agreement between the employee and employer providing otherwise. The Patents Law also provides that if there is no agreement between an employer and an employee determining whether the employee is entitled to receive consideration for service inventions and on what terms, this will be determined by the Israeli Compensation and Royalties Committee (the “Committee”), a body constituted under the Patents Law. Case law clarifies that the right to receive consideration for “service inventions” can be waived by the employee and that in certain circumstances, such waiver does not necessarily have to be explicit. The Committee will examine, on a case-by-case basis, the general contractual framework between the parties, using interpretation rules of the general Israeli contract laws. Further, the Committee has not

 

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yet determined one specific formula for calculating this remuneration, but rather uses the criteria specified in the Patents Law. Although Alpha Tau generally enters into agreements with its employees pursuant to which such individuals assign to it all rights to any inventions created during and as a result of their employment with Alpha Tau, Alpha Tau may face claims demanding remuneration in consideration for assigned inventions. As a consequence of such claims, Alpha Tau could be required to pay additional remuneration or royalties to its current and/or former employees, or be forced to litigate such monetary claims (which will not affect Alpha Tau’s proprietary rights), which could negatively affect its business.

Certain tax benefits that may be available to Alpha Tau, if obtained by Alpha Tau, would require it to continue to meet various conditions and may be terminated or reduced in the future, which could increase Alpha Tau’s costs and taxes.

Alpha Tau may be eligible for certain tax benefits provided to “Preferred Technological Enterprises” under the Israeli Law for the Encouragement of Capital Investments, 5719-1959, referred to as the Investment Law. If Alpha Tau obtains tax benefits under the “Preferred Technological Enterprises” regime then, in order to remain eligible for such tax benefits, it will need to continue to meet certain conditions stipulated in the Investment Law and its regulations, as amended. If these tax benefits are reduced, cancelled or discontinued, Alpha Tau’s Israeli taxable income may be subject to Israeli corporate tax rates of 23% in 2018 and thereafter. Additionally, if Alpha Tau increases its activities outside of Israel through acquisitions, for example, its activities might not be eligible for inclusion in future Israeli tax benefit programs. See “Certain Material Israeli Tax Considerations.”

It may be difficult to enforce a U.S. judgment against Alpha Tau, its officers and directors and the Israeli experts named in this proxy statement/prospectus in Israel or the United States, or to assert U.S. securities laws claims in Israel or serve process on Alpha Tau’s officers and directors and these experts.

Most of Alpha Tau’s directors or officers are not residents of the United States and most of their and Alpha Tau’s assets are located outside the United States. Service of process upon Alpha Tau or its non-U.S. resident directors and officers and enforcement of judgments obtained in the United States against Alpha Tau or its non-U.S. directors and executive officers may be difficult to obtain within the United States. Alpha Tau have been informed by its legal counsel in Israel that it may be difficult to assert claims under U.S. securities laws in original actions instituted in Israel or obtain a judgment based on the civil liability provisions of U.S. federal securities laws. Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws against Alpha Tau or its non-U.S. officers and directors because Israel may not be the most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing the matters described above. Israeli courts might not enforce judgments rendered outside Israel, which may make it difficult to collect on judgments rendered against Alpha Tau or its non-U.S. officers and directors.

Moreover, an Israeli court will not enforce a non-Israeli judgment if (among other things) it was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases), or if its enforcement is likely to prejudice the sovereignty or security of the State of Israel, or if it was obtained by fraud or in absence of due process, or if it is at variance with another valid judgment that was given in the same matter between the same parties, or if a suit in the same matter between the same parties was pending before a court or tribunal in Israel, at the time the foreign action was brought. For more information, see “Enforceability of Civil Liabilities.”

Your rights and responsibilities as a shareholder of Alpha Tau will be governed by Israeli law, which may differ in some respects from the rights and responsibilities of shareholders of U.S. corporations.

Alpha Tau is incorporated under Israeli law. The rights and responsibilities of holders of the Alpha Tau ordinary shares are governed by the Alpha Tau Articles and the Companies Law. These rights and

 

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responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations. In particular, pursuant to the Companies Law each shareholder of an Israeli company has to act in good faith and in a customary manner in exercising his or her rights and fulfilling his or her obligations toward the company and other shareholders and to refrain from abusing his or her power in the company, including, among other things, in voting at the general meeting of shareholders and class meetings, on amendments to a company’s articles of association, increases in a company’s authorized share capital, mergers, and transactions requiring shareholders’ approval under the Companies Law. In addition, a controlling shareholder of an Israeli company or a shareholder who knows that it possesses the power to determine the outcome of a shareholder vote or who has the power to appoint or prevent the appointment of a director or officer in the Company, or has other powers toward the Company has a duty of fairness toward the Company. However, Israeli law does not define the substance of this duty of fairness. There is limited case law available to assist in understanding the implications of these provisions that govern shareholder behavior.

If Alpha Tau or any of its subsidiaries are characterized as a Passive Foreign Investment Company (“PFIC”) for U.S. federal income tax purposes, U.S. Holders may suffer adverse tax consequences.

A non-U.S. corporation generally will be treated as a PFIC for U.S. federal income tax purposes, in any taxable year if either (1) at least 75% of its gross income for such year is passive income or (2) at least 50% of the value of its assets (generally based on an average of the quarterly values of the assets) during such year is attributable to assets that produce or are held for the production of passive income. Alpha Tau believes it was not a PFIC in 2020. Based on the current and anticipated composition of the income, assets and operations of Alpha Tau and its subsidiaries, there is a risk that Alpha Tau may be treated as a PFIC for the taxable year that includes the Business Combination and for future taxable years. Moreover, the application of the PFIC rules is subject to uncertainty in several respects, and Alpha Tau cannot assure you that the IRS will not take a contrary position or that a court will not sustain such a challenge by the IRS.

Whether Alpha Tau or any of its subsidiaries are a PFIC for any taxable year is a factual determination that depends on, among other things, the composition of Alpha Tau’s income and assets, and the market value of its and its subsidiaries’ shares and assets. Changes in the composition of our income or composition of Alpha Tau or any of its subsidiaries assets may cause us to be or become a PFIC for the current or subsequent taxable years. Whether Alpha Tau is treated as a PFIC for U.S. federal income tax purposes is a factual determination that must be made annually at the close of each taxable year and, thus, is subject to significant uncertainty.

If Alpha Tau is a PFIC for any taxable year, a U.S. Holder of Alpha Tau ordinary shares may be subject to adverse tax consequences and may incur certain information reporting obligations. For a further discussion, see “Certain Material U.S. Federal Income Tax Considerations—U.S. Holders—Passive Foreign Investment Company Rules.” U.S. Holders of Alpha Tau ordinary shares and Alpha Tau warrants are strongly encouraged to consult their own advisors regarding the potential application of these rules to Alpha Tau and the ownership of Alpha Tau ordinary shares and/or Alpha Tau warrants.

If a U.S. Holder is treated as owning at least 10% of the Alpha Tau ordinary shares, such U.S. Holder may be subject to adverse U.S. federal income tax consequences.

For U.S. federal income tax purposes, if a U.S. Holder is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of the Alpha Tau ordinary shares, such person may be treated as a “United States shareholder” with respect to Alpha Tau, or any of its subsidiaries, if Alpha Tau or such subsidiary is a “controlled foreign corporation.” If Alpha Tau has one or more U.S. subsidiaries, certain of Alpha Tau’s non-U.S. subsidiaries could be treated as a controlled foreign corporation regardless of whether Alpha Tau is treated as a controlled foreign corporation (although there are recently promulgated final and currently proposed Treasury regulations that may limit the application of these rules in certain circumstances).

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“Subpart F income” and, in computing their “global intangible low-taxed income,” “tested income” and a pro rata share of the amount of certain U.S. property (including certain stock in U.S. corporations and certain tangible assets located in the United States) held by the controlled foreign corporation regardless of whether such controlled foreign corporation makes any distributions. The amount includable by a United States shareholder under these rules is based on a number of factors, including potentially, but not limited to, the controlled foreign corporation’s current earnings and profits (if any), tax basis in the controlled foreign corporation’s assets, and foreign taxes paid by the controlled foreign corporation on its underlying income. Failure to comply with these reporting obligations (or related tax payment obligations) may subject such United States shareholder to significant monetary penalties and may extend the statute of limitations with respect to such United States shareholder’s U.S. federal income tax return for the year for which reporting (or payment of tax) was due. Alpha Tau cannot provide any assurances that it will assist U.S. Holders in determining whether Alpha Tau or any of its subsidiaries are treated as a controlled foreign corporation for U.S. federal income tax purposes or whether any U.S. Holder is treated as a United States shareholder with respect to any of such controlled foreign corporations or furnish to any holder information that may be necessary to comply with reporting and tax paying obligations if Alpha Tau, or any of its subsidiaries, is treated as a controlled foreign corporation for U.S. federal income tax purposes.

The Alpha Tau Articles provide that unless Alpha Tau consents otherwise, the competent courts of Tel Aviv, Israel shall be the sole and exclusive forum for substantially all disputes between Alpha Tau and its shareholders under the Companies Law and the Israeli Securities Law.

The competent courts of Tel Aviv, Israel shall, unless Alpha Tau consents otherwise in writing, be the exclusive forum for (i) any derivative action or proceeding brought on behalf of Alpha Tau, (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of Alpha Tau to Alpha Tau or Alpha Tau’s shareholders, or (iii) any action asserting a claim arising pursuant to any provision of the Companies Law or the Israeli Securities Law, 5728-1968 (the “Israeli Securities Law”). This exclusive forum provision is intended to apply to claims arising under Israeli law and would not apply to claims brought pursuant to the Securities Act or the Exchange Act or any other claim for which federal courts would have exclusive jurisdiction. Such exclusive forum provision in the Alpha Tau Articles will not relieve Alpha Tau of its duties to comply with federal securities laws and the rules and regulations thereunder, and shareholders of Alpha Tau will not be deemed to have waived Alpha Tau’s compliance with these laws, rules and regulations. This exclusive forum provision may limit a shareholders ability to bring a claim in a judicial forum of its choosing for disputes with Alpha Tau or its directors or other employees which may discourage lawsuits against Alpha Tau, its directors, officers and employees.

Risks Related to the Business Combination and the Combined Company

HCCC may not have sufficient funds to consummate the Business Combination.

As of June 30, 2021, HCCC had $1.1 million available to it outside the Trust Account to fund its working capital requirements. If HCCC is required to seek additional capital, it would need to borrow funds from the Sponsor, its management team or other third parties to operate or it may be forced to liquidate. None of such persons is under any obligation to advance funds to HCCC in such circumstances. Any such advances would be repaid only from funds held outside the Trust Account or from funds released to HCCC from the Trust Account upon completion of the Business Combination. If HCCC is unable to consummate the Business Combination because it does not have sufficient funds available, and if HCCC is not able to consummate another business combination within the timeline set forth in its Charter, HCCC may be forced to cease operations and liquidate the Trust Account. Consequently, HCCC’s public stockholders may receive less than $10 per share and their warrants will expire worthless.

 

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If HCCC’s stockholders fail to properly demand redemption rights, they will not be entitled to convert their HCCC Class A Stock into a pro rata portion of the Trust Account.

HCCC stockholders holding public shares may demand that HCCC convert their public shares into a pro rata portion of the Trust Account, calculated as of two (2) business days prior to the special meeting. To demand redemption rights, HCCC stockholders must deliver their shares (either physically or electronically) to HCCC’s transfer agent no later than two (2) business days prior to the special meeting. Any stockholder who fails to properly demand redemption rights by delivering his, her or its shares will not be entitled to convert his, her or its shares into a pro rata portion of the Trust Account. See the section of this proxy statement/prospectus titled “Special Meeting of HCCC Stockholders—Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.

The Business Combination remains subject to conditions that HCCC cannot control and if such conditions are not satisfied or waived, the Business Combination may not be consummated.

The Business Combination is subject to a number of conditions, including the condition that HCCC have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-5(g)(1) of the Exchange Act) immediately after consummation of the Business Combination, that there is no legal prohibition against consummation of the Business Combination, that the Alpha Tau ordinary shares be approved for listing on Nasdaq subject only to official notice of issuance thereof, receipt of securityholder approvals, continued effectiveness of the registration statement of which this proxy statement/prospectus is a part, the truth and accuracy of HCCC’s and Alpha Tau’s representations and warranties made in the Merger Agreement, the non-termination of the Merger Agreement and agreements by both HCCC and Alpha Tau. There are no assurances that all conditions to the Business Combination will be satisfied or that the conditions will be satisfied in the time frame expected.

If the conditions to the Business Combination are not met (and are not waived, to the extent waivable), either HCCC or Alpha Tau may, subject to the terms and conditions of the Merger Agreement, terminate the Merger Agreement. See the section of this proxy statement/prospectus titled “The Merger Agreement—Termination.”

The exercise of HCCC’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in HCCC’s stockholders’ best interest.

In the period leading up to the closing of the Business Combination, events may occur that, pursuant to the Merger Agreement, would require HCCC to agree to amend the Merger Agreement, to consent to certain actions taken by Alpha Tau or to waive rights that HCCC is entitled to under the Merger Agreement. Waivers may arise because of changes in the course of Alpha Tau’s business, a request by Alpha Tau to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on Alpha Tau’s business and would entitle HCCC to terminate the Merger Agreement. In any of such circumstances, it would be at HCCC’s discretion, acting through its board of directors, to grant its consent or waive those rights. The existence of the financial and personal interests of the directors and officers described in these risk factors may result in a conflict of interest on the part of one or more of the directors or officers between what he or they may believe is best for HCCC and what he or they may believe is best for himself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, HCCC does not believe there will be any changes or waivers that HCCC’s directors and officers would be likely to make after stockholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further stockholder approval, HCCC will circulate a new or amended proxy statement/prospectus and resolicit HCCC’s stockholders if changes to the terms of the Business Combination that would have a material impact on its stockholders or represent a fundamental change in the proposals being voted upon.

 

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Alpha Tau may issue additional Alpha Tau ordinary shares or other equity securities without seeking approval of the Alpha Tau shareholders, which would dilute your ownership interests and may depress the market price of the Alpha Tau ordinary shares.

Upon consummation of the Business Combination, Alpha Tau will have warrants outstanding to purchase up to an aggregate of 24,129,741 Alpha Tau ordinary shares. Further, Alpha Tau may choose to seek third party financing to provide additional working capital for the Alpha Tau business, in which event Alpha Tau may issue additional equity securities. Following the consummation of the Business Combination, Alpha Tau may also issue additional Alpha Tau ordinary shares or other equity securities of equal or senior rank in the future for any reason or in connection with, among other things, future acquisitions, the redemption of outstanding warrants or repayment of outstanding indebtedness, without shareholder approval, in a number of circumstances.

The issuance of additional Alpha Tau ordinary shares or other equity securities of equal or senior rank would have the following effects:

 

   

Alpha Tau’s existing shareholders’ proportionate ownership interest in Alpha Tau will decrease;

 

   

the amount of cash available per share, including for payment of dividends in the future, may decrease;

 

   

the relative voting strength of each previously outstanding Alpha Tau ordinary share may be diminished; and

 

   

the market price of the Alpha Tau ordinary shares may decline.

Future resales of the Alpha Tau ordinary shares issued in connection with the Business Combination may cause the market price of the Alpha Tau ordinary shares to drop significantly, even if Alpha Tau’s business is doing well.

Certain equityholders of Alpha Tau and certain equityholders of HCCC entered into Support Agreements with Alpha Tau. Pursuant to the Sponsor Support Agreement certain HCCC equityholders have agreed that, until the earlier of (x) one year following the Closing Date and (y) following the date that the last sale price of the Alpha Tau ordinary shares equals or exceeds $12.00 per share (subject to certain adjustments) for any 20 trading days within any 30 trading day period commencing at least 150 days after the Closing Date, they will not transfer any Alpha Tau securities. Additionally, pursuant to the Alpha Tau Shareholder Support Agreement, such Alpha Tau equityholders have agreed that, until the earlier of (x) 180 days following the Closing Date and (y) following the date that the last sale price of the Alpha Tau ordinary shares equals or exceeds $12.00 per share (subject to certain adjustments) for any 20 trading days within any 30 trading day period commencing at least 150 days after the Closing Date. See the section of this proxy statement/prospectus titled “Agreements Entered Into in Connection with the Business Combination—Support Agreements.”

Further, certain stockholders of HCCC will become parties to the Amended IRA by executing a joinder thereto. Pursuant to the Amended IRA, the shareholders party thereto will be entitled to customary “demand” and “piggyback” registration rights.

Upon expiration of the applicable lockup periods set forth in the Support Agreements and upon the effectiveness of any registration statement Alpha Tau files pursuant to the above-referenced Amended IRA, in a registered offering of securities pursuant to the Securities Act or otherwise in accordance with Rule 144 under the Securities Act, the Alpha Tau shareholders may sell large amounts of Alpha Tau ordinary shares and warrants in the open market or in privately negotiated transactions, which could have the effect of increasing the volatility in the trading price of the Alpha Tau ordinary shares or the Alpha Tau warrants or putting significant downward pressure on the price of the Alpha Tau ordinary shares or warrants. Additionally, downward pressure on the market price of the Alpha Tau ordinary shares or Alpha Tau warrants likely will result from sales of Alpha Tau ordinary shares issued in connection with the exercise of warrants. Further, sales of Alpha Tau ordinary shares or

 

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warrants upon expiration of the applicable Lockup Period could encourage short sales by market participants. Generally, short selling means selling a security, contract or commodity not owned by the seller. The seller is committed to eventually purchase the financial instrument previously sold. Short sales are used to capitalize on an expected decline in the security’s price. Short sales of Alpha Tau ordinary shares or warrants could have a tendency to depress the price of the Alpha Tau ordinary shares or the Alpha Tau warrants, respectively, which could increase the potential for short sales.

Additionally, through the Subscription Agreements, Alpha Tau has agreed with the PIPE Investors to register the PIPE Shares on a resale registration statement following the closing of the Transactions. These shares will be freely tradable without restriction or further registration under the Securities Act, unless the shares are held by any of HCCC’s “affiliates” as such term is defined in Rule 144 under the Securities Act. This additional liquidity in the market for Alpha Tau ordinary shares may lead to downward pressure on the market price of the Alpha Tau ordinary shares.

We cannot predict the size of future issuances of Alpha Tau ordinary shares or warrants or the effect, if any, that future issuances and sales of shares of Alpha Tau ordinary shares or warrants will have on the market price of the Alpha Tau ordinary shares or warrants. Sales of substantial amounts of Alpha Tau ordinary shares (including those shares issued in connection with the Business Combination), or the perception that such sales could occur, may adversely affect prevailing market prices of Alpha Tau ordinary shares or warrants.

HCCC’s board of directors did not obtain a third-party fairness opinion in determining whether or not to proceed with the Business Combination.

HCCC’s board of directors did not obtain a third-party fairness opinion in connection with their determination to approve the Business Combination. In analyzing the Business Combination, HCCC’s board of directors and management conducted due diligence on Alpha Tau and researched the industry in which Alpha Tau operates and concluded that the Business Combination was fair to and in the best interest of HCCC and its stockholders. Accordingly, investors will be relying solely on the judgment of HCCC’s board of directors and management in valuing Alpha Tau’s business, and HCCC’s board of directors and management may not have properly valued such business. The lack of a third-party fairness opinion may lead an increased number of stockholders to vote against the proposed Business Combination or demand redemption of their shares for cash, which could potentially impact HCCC’s ability to consummate the Business Combination or adversely affect Alpha Tau’s liquidity following the consummation of the Business Combination.

HCCC and Alpha Tau will incur significant transaction and transition costs in connection with the Transactions.

HCCC and Alpha Tau have both incurred and expect to incur significant, non-recurring costs in connection with consummating the Transactions and operating as a public company following the consummation of the Transactions. Alpha Tau may also incur additional costs to retain key employees. All expenses incurred in connection with the Transactions, including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be for the account of the party incurring such fees, expenses and costs or paid by Alpha Tau following the Closing.

Subsequent to the completion of the Business Combination, the combined company may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and the combined company’s ordinary share price, which could cause you to lose some or all of your investment.

Although HCCC has conducted extensive due diligence on Alpha Tau, HCCC cannot assure you that this diligence will surface all material issues that may be present in Alpha Tau’s business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of Alpha Tau’s

 

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business and outside of its control will not later arise. As a result of these factors, the combined company may be forced to later write-down or write-off assets, restructure its operations, or incur impairment or other charges that could result in its reporting losses. Even if HCCC’s due diligence successfully identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with HCCC’s preliminary risk analysis. Even though these charges may be non-cash items and would not have an immediate impact on the combined company’s liquidity, the fact that the combined company reports charges of this nature could contribute to negative market perceptions of the combined company or its securities. In addition, charges of this nature may cause the combined company to violate net worth or other covenants to which the combined company may be subject as a result of assuming pre-existing debt held by Alpha Tau’s business or by virtue of the combined company obtaining post-combination debt financing. Accordingly, any shareholders of Alpha Tau following the Business Combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction in value.

The Alpha Tau securities to be received by HCCC’s securityholders as a result of the Business Combination will have different rights from HCCC securities.

Following completion of the Business Combination, HCCC’s securityholders will no longer be securityholders of HCCC but will instead be securityholders of Alpha Tau. There will be important differences between your current rights as a HCCC securityholder and your rights as an Alpha Tau securityholder. See “Comparison of Rights of Alpha Tau Shareholders and HCCC Stockholders” for a discussion of the different rights associated with the Alpha Tau securities.

HCCC’s stockholders will have a reduced ownership and voting interest after consummation of the Business Combination and will exercise less influence over management.

After the completion of the Business Combination, HCCC’s current stockholders will own a smaller percentage of the combined company than they currently own of HCCC. At the Closing, existing Alpha Tau shareholders would hold approximately 56.3% of the issued and outstanding Alpha Tau ordinary shares and current stockholders of HCCC (including the Sponsor) and the PIPE Investors (as defined below) will own the remaining Alpha Tau ordinary shares (assuming no holder of Class A Stock exercises redemption rights as described in this proxy statement/prospectus). Consequently, HCCC’s current stockholders, as a group, will have reduced ownership and voting power in the combined company compared to their ownership and voting power in HCCC.

Even if the Business Combination is consummated, there is no guarantee that the Alpha Tau warrants will ever be in the money, and they may expire worthless and the terms of HCCC’s warrants may be amended.

The exercise price for the Alpha Tau warrants will be $11.50 per ordinary share. Upon consummation of the Business Combination, each HCCC warrant will become one Alpha Tau warrant, and the exercise price and number of shares issuable upon exercise of such warrants may change if the Share Split is not effected or does not result in a price per Alpha Tau ordinary share of $10.00. There is no guarantee that the Alpha Tau warrants, following the Business Combination, will ever be in the money prior to their expiration, and as such, the warrants may expire worthless.

HCCC’s current directors’ and executive officers’ affiliates own shares of HCCC Common Stock and private placement warrants that will be worthless if the Business Combination is not approved. Such interests may have influenced their decision to approve the Business Combination.

If the Business Combination or another business combination is not consummated by January 20, 2023 (or such later date as may be approved by HCCC’s stockholders in an amendment to the HCCC Charter), HCCC will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares for cash and, subject to the approval of its remaining stockholders and its board of directors, dissolving and

 

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liquidating. In such event, the 6,875,000 shares of Class B Stock held by the Sponsor, which is affiliated with certain of HCCC’s directors and officers and other certain officers, that were acquired for an aggregate purchase price of $25,000 prior to the HCCC IPO, would be worthless because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Further, the Sponsor purchased an aggregate of 6,800,000 private placement warrants at a price of $1.00 per warrant, simultaneously with the consummation of the HCCC IPO and the subsequent exercise of the underwriter’s overallotment option, for an aggregate purchase price of $6,800,000. The Class B Stock and the private placement warrants will become worthless if HCCC does not consummate a business combination by January 20, 2023 (or such later date as may be approved by HCCC’s stockholders in an amendment to the HCCC Charter). On the other hand, if the Business Combination is consummated, each outstanding share of Class B Stock (other than the shares forfeited pursuant to the Sponsor Support Agreement) will convert into one Alpha Tau ordinary share, subject to adjustment described herein, at the closing and each outstanding HCCC warrant (other than the warrants forfeited pursuant to the Sponsor Support Agreement) will become an Alpha Tau warrant. Such shares and warrants had an aggregate market value of $                 and $                , respectively, based upon the closing price of $                 per share and $                 per warrant on Nasdaq on                , 2021.

As such, the Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate. In addition, based on the difference in the purchase price of $0.004 that the Sponsor paid for the founder shares, as compared to the purchase price of $10.00 per Public Unit sold in the IPO, the Sponsor may earn a positive rate of return even if the share price of the Combined Company after the Closing falls below the price initially paid for the Public Units in the IPO and the Public Shareholders experience a negative rate of return following the Closing of the Business Combination. In the event that a business combination is not effected, the Sponsor will not be entitled to any reimbursement of funds invested in HCCC. In total, the Sponsor has invested $6,825,000 for securities that would be worthless absent the completion of a business combination. The Sponsor, its affiliates and HCCC’s officers and directors have no loans outstanding to HCCC.

These financial interests may have influenced the decision of HCCC’s directors and officers to approve the Business Combination and to continue to pursue the Business Combination. In considering the recommendations of HCCC’s board of directors to vote for the Business Combination Proposal and other proposals, its stockholders should consider these interests. See the section of this proxy statement/prospectus titled “Proposal OneThe Business Combination Proposal—Interests of Certain Persons in the Transactions.”

The Sponsor, an affiliate of current officers and directors of HCCC, is liable to ensure that proceeds of the Trust Account are not reduced by vendor claims in the event the Business Combination is not consummated. Such liability may have influenced HCCC’s board of directors’ decision to pursue the Business Combination and HCCC’s board of directors’ decision to approve it.

If the Business Combination or another business combination is not consummated by HCCC on or before January 20, 2023, the Sponsor, an affiliate of current officers and directors of HCCC, will be liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by HCCC for services rendered or contracted for or for products sold to HCCC, but only if such a vendor or target business has not executed a waiver agreement. If HCCC consummates a business combination, on the other hand, HCCC will be liable for all such claims. HCCC has no reason to believe that the Sponsor will not be able to fulfill its indemnity obligations to HCCC.

These obligations of the Sponsor may have influenced HCCC’s board of directors’ decision to pursue the Business Combination with Alpha Tau or HCCC’s board of directors’ decision to approve the Business Combination. In considering the recommendations of HCCC’s board of directors to vote for the Business Combination Proposal and other proposals, stockholders should consider these interests. See the section of this proxy statement/prospectus titled “Proposal One—The Business Combination Proposal—Interests of Certain Persons in the Transactions.”

 

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HCCC’s directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to HCCC’s public stockholders in the event a business combination is not consummated.

If proceeds in the Trust Account are reduced below $10.00 per public share and the Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, HCCC’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While HCCC currently expects that its independent directors would take legal action on HCCC’s behalf against the Sponsor to enforce the Sponsor’s indemnification obligations, it is possible that HCCC’s independent directors in exercising their business judgment may choose not to do so in any particular instance. If HCCC’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to HCCC’s public stockholders may be reduced below $10.00 per share.

Activities taken by existing HCCC stockholders to increase the likelihood of approval of the Business Combination Proposal and other proposals could have a depressive effect on the HCCC Class A Stock.

At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding HCCC or its securities, HCCC, the Sponsor, HCCC’s officers and directors, Alpha Tau, the Alpha Tau officers and directors and/or their respective affiliates may purchase HCCC Class A Stock from institutional and other investors who vote, or indicate an intention to vote, against the Business Combination Proposal, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares of HCCC Class A Stock or vote their shares of HCCC Class A Stock in favor of the Business Combination Proposal. The purpose of such purchases and other transactions would be to increase the likelihood of approval of the Business Combination Proposal by the holders of a majority of the outstanding shares of HCCC Class A Stock and ensure that HCCC has in excess of $5,000,001 of net assets to consummate the Business Combination where it appears that such requirement would otherwise not be met. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and the transfer to such investors or holders of shares owned by the Sponsor for nominal value. Entering into any such arrangements may have a depressive effect on the HCCC Class A Stock. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares of HCCC Class A Stock at a price lower than market and may therefore be more likely to sell the HCCC Class A Stock he owns, either prior to or immediately after the special meeting.

In addition, if such purchases are made, the public “float” of the Alpha Tau ordinary shares following the Business Combination and the number of beneficial holders of Alpha Tau securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of Alpha Tau securities on Nasdaq or another national securities exchange or reducing the liquidity of the trading market for the Alpha Tau ordinary shares.

The Business Combination may be completed even though material adverse effects may result from the announcement of the Business Combination, industry-wide changes and other causes.

In general, either HCCC or Alpha Tau may refuse to complete the Business Combination if there is a material adverse effect affecting the other party between the signing date of the Merger Agreement and the planned closing. However, certain types of changes do not permit either party to refuse to consummate the Business Combination, even if such change could be said to have a material adverse effect on Alpha Tau or HCCC, including the following events (except, in certain cases where the change has a disproportionate effect on a party):

 

   

changes generally affecting the economy and the financial or securities markets, including the COVID-19 pandemic;

 

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the outbreak or escalation of war or any act of terrorism, civil unrest or natural disasters;

 

   

changes (including changes in law) or general conditions in the industry in which the party operates;

 

   

changes in GAAP, or the authoritative interpretation of GAAP; or

 

   

changes attributable to the public announcement or pendency of the Transactions or the execution or performance of the Merger Agreement.

Furthermore, HCCC or Alpha Tau may waive the occurrence of a material adverse effect affecting the other party. If a material adverse effect occurs and the parties still consummate the Business Combination, the market trading price of the Alpha Tau ordinary shares and Alpha Tau warrants may suffer.

Delays in completing the Business Combination may substantially reduce the expected benefits of the Business Combination.

Satisfying the conditions to, and completion of, the Business Combination may take longer than, and could cost more than, HCCC expects. Any delay in completing or any additional conditions imposed in order to complete the Business Combination may materially adversely affect the benefits that HCCC expects to achieve from the Business Combination.

HCCC and Alpha Tau have no history operating as a combined company. The unaudited pro forma condensed combined financial information may not be an indication of Alpha Tau’s financial condition or results of operations following the Business Combination, and accordingly, you have limited financial information on which to evaluate Alpha Tau and your investment decision.

Alpha Tau has a limited operating history and Alpha Tau and HCCC have no prior history as a combined entity and their operations have not been previously managed on a combined basis. The unaudited pro forma condensed combined financial information contained in this proxy statement/prospectus has been prepared using the consolidated historical financial statements of HCCC and Alpha Tau, and is presented for illustrative purposes only and should not be considered to be an indication of the results of operations including, without limitation, future revenue, or financial condition of HCCC following the Business Combination. Certain adjustments and assumptions have been made regarding HCCC after giving effect to the Business Combination. Alpha Tau and HCCC believe these assumptions are reasonable, however, the information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments are difficult to make with accuracy. These assumptions may not prove to be accurate, and other factors may affect HCCC’s results of operations or financial condition following the consummation of the Business Combination. For these and other reasons, the historical and pro forma condensed combined financial information included in this proxy statement/prospectus does not necessarily reflect Alpha Tau’s results of operations and financial condition and the actual financial condition and results of operations of Alpha Tau following the Business Combination may not be consistent with, or evident from, this pro forma financial information.

The projections and forecasts presented in this proxy statement/prospectus may not be an indication of the actual results of the transaction or Alpha Tau’s future results.

This proxy statement/prospectus contains projections and forecasts prepared by Alpha Tau. None of the projections and forecasts included in this proxy statement/prospectus have been prepared with a view toward public disclosure other than to certain parties involved in the Business Combination or toward complying with SEC guidelines or GAAP. The projections and forecasts were prepared based on numerous variables and assumptions which are inherently uncertain and may be beyond the control of Alpha Tau and HCCC and exclude, among other things, transaction-related expenses. Important factors that may affect actual results and results of Alpha Tau’s operations following the Business Combination, or could lead to such projections and forecasts not being achieved include, but are not limited to: clinical trial costs (including enrollment difficulties), client

 

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demand for Alpha Tau’s products, an evolving competitive landscape, rapid change in cancer therapeutics, regulation changes in a highly regulated environment, successful management and retention of key personnel, unexpected expenses and general economic conditions. While Alpha Tau assumes responsibility for the accuracy and completeness of the projections and forecasts to the extent included in this proxy statement/prospectus, you are cautioned not to place undue reliance on the projections, as the projections may be materially different than actual results.

If HCCC is unable to complete the Business Combination or another business combination by January 20, 2023 (or such other date as approved by HCCC stockholders through approval of an amendment to the HCCC Charter), HCCC will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, HCCC public stockholders may only receive $10 per share (or less than such amount in certain circumstances) and HCCC warrants will expire worthless.

If HCCC is unable to complete the Business Combination or another business combination within the required time period, HCCC will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to HCCC to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding HCCC public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of HCCC’s remaining stockholders and its board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to HCCC’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, HCCC public stockholders may only receive $10 per share, and HCCC warrants will expire worthless. In certain circumstances, HCCC public stockholders may receive less than $10 per share on the redemption of their shares.

If the Business Combination is not completed, potential target businesses may have leverage over HCCC in negotiating a business combination, HCCC’s ability to conduct due diligence on a business combination as it approaches its dissolution deadline may decrease, and it may have insufficient working capital to continue to pursue potential target businesses, each of which could undermine the ability to complete a business combination on terms that would produce value for HCCC stockholders.

Any potential target business with which HCCC enters into negotiations concerning an initial business combination will be aware that, unless HCCC amends its existing charter to extend its life and amend certain other agreements it has entered into, then HCCC must complete its initial business combination by January 20, 2023. Consequently, if HCCC is unable to complete this Business Combination, a potential target business may obtain leverage over it in negotiating an initial business combination, knowing that if HCCC does not complete its initial business combination with that particular target business, it may be unable to complete its initial business combination with any target business. This risk will increase as HCCC gets closer to the timeframe described above. In addition, HCCC may have limited time to conduct due diligence and may enter into its initial business combination on terms that it would have rejected upon a more comprehensive investigation. Additionally, HCCC may have insufficient working capital to continue efforts to pursue a business combination.

In the event of liquidation by HCCC, third parties may bring claims against HCCC and, as a result, the proceeds held in the Trust Account could be reduced and the per-share liquidation price received by stockholders could be less than $10 per share.

Under the terms of the HCCC Charter, HCCC must complete the Business Combination or another business combination by January 20, 2023 (unless such date is extended by HCCC’s stockholders) or HCCC must cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In

 

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such event, third parties may bring claims against HCCC. Although HCCC has obtained waiver agreements from certain vendors and service providers it has engaged and owes money to, and the prospective target businesses it has negotiated with, whereby such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account, there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the Trust Account notwithstanding such agreements. Furthermore, there is no guarantee that a court will uphold the validity of such agreements. Accordingly, the proceeds held in the Trust Account could be subject to claims which could take priority over those of HCCC’s public stockholders. If HCCC is unable to complete a business combination within the required time period, the Sponsor has agreed that it will be liable to HCCC if and to the extent any claims by a vendor for services rendered or products sold to it, or a prospective target business with which it has discussed entering into a transaction agreement, reduces the amount of funds in the Trust Account to below $10.00 per public share, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under HCCC’s indemnity of the underwriter of the initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. Furthermore, the Sponsor will not be liable to public stockholders and instead will only have liability to HCCC. HCCC has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and, therefore, the Sponsor may not be able to satisfy those obligations. HCCC has not asked the Sponsor to reserve for such eventuality. Therefore, the per-share distribution from the Trust Account in such a situation may be less than the approximately $                 estimated to be in the Trust Account as of two business days prior to the special meeting date, due to such claims.

Additionally, if HCCC is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, or if HCCC otherwise enters compulsory or court supervised liquidation, the proceeds held in the Trust Account could be subject to applicable bankruptcy law and may be included in its bankruptcy.

HCCC’s stockholders may be held liable for claims by third parties against HCCC to the extent of distributions received by them.

If HCCC is unable to complete the Business Combination or another business combination within the required time period, HCCC will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to HCCC to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding HCCC public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of HCCC’s remaining stockholders and its board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to HCCC’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. HCCC cannot assure you that it will properly assess all claims that may be potentially brought against HCCC. As a result, HCCC’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of its stockholders may extend well beyond the third anniversary of the date of distribution. Accordingly, HCCC cannot assure you that third parties will not seek to recover from its stockholders amounts owed to them by HCCC.

Additionally, if HCCC is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by HCCC’s stockholders. Because HCCC intends to distribute the proceeds held in the Trust Account to its public stockholders promptly after the expiration of the time period to complete a business combination, this may be viewed or interpreted as giving preference to its

 

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public stockholders over any potential creditors with respect to access to or distributions from its assets. Furthermore, HCCC’s board of directors may be viewed as having breached their fiduciary duties to its creditors and/or may have acted in bad faith, and thereby exposing itself and HCCC to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors. HCCC cannot assure you that claims will not be brought against it for these reasons.

HCCC may be a target of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the Business Combination from being completed.

Securities class action lawsuits and derivative lawsuits are often brought against companies that have entered into business combination agreements or similar agreements. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on HCCC’s liquidity and financial condition. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting consummation of the Transactions, then that injunction may delay or prevent the Transactions from being completed. Currently, HCCC is not aware of any securities class action lawsuits or derivative lawsuits being filed in connection with the Transactions.

The Sponsor has agreed to vote in favor of the Business Combination, regardless of how HCCC’s public stockholders vote.

The Sponsor owns and is entitled to vote an aggregate of approximately 20 % on an as-converted basis of the outstanding HCCC Common Stock and has agreed to vote its shares in favor of the Business Combination Proposal. The Sponsor has also indicated that it intends to vote its shares in favor of all other proposals being presented at the meeting. Therefore, in addition to the shares of HCCC Class B Stock held by the Sponsor and HCCC’s officers and directors, HCCC would need 10,312,501 shares, or approximately 37.5%, of the 27,500,000 public shares to be voted in favor of the Business Combination Proposal and other proposals in order for them to be approved (assuming all outstanding shares are voted on each proposal). Accordingly, it is more likely that the necessary stockholder approval for the Business Combination Proposal and the other proposals will be received than would be the case if the Sponsor agreed to vote its Founder Shares in accordance with the majority of the votes cast by HCCC’s public stockholders.

The ongoing COVID-19 pandemic may adversely affect HCCC’s and Alpha Tau’s ability to consummate the Transactions.

The COVID-19 pandemic has resulted in governmental authorities worldwide implementing numerous measures to contain the virus, including travel restrictions, quarantines, shelter-in-place orders and business limitations and shutdowns. More generally, the pandemic raises the possibility of an extended global economic downturn and has caused volatility in financial markets. The pandemic may also amplify many of the other risks described in this proxy statement/prospectus.

HCCC and Alpha Tau may be unable to complete the Transactions if continued concerns relating to COVID-19 restrict travel and limit the ability to have meetings with potential investors or the Alpha Tau personnel. The extent to which COVID-19 impacts HCCC’s and Alpha Tau’s ability to consummate the Transactions will depend on future developments, which are highly uncertain and cannot be predicted, including new information that 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 extended period of time, HCCC’s and Alpha Tau’s ability to consummate the Transactions may be materially adversely affected.

 

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The Business Combination may not qualify as a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”) or may be taxable under Section 367(a) of the Code, potentially causing U.S. Holders of HCCC Common Stock and/or HCCC warrants to recognize gain or loss for U.S. federal income tax purposes.

It is intended that the Business Combination (i) qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and (ii) does not result in gain being recognized by U.S. Holders (as defined in “Certain Material U.S. Federal Income Tax Considerations”) of HCCC Common Stock and HCCC warrants immediately prior to the Effective Time under Section 367(a) of the Code (other than with respect to any such holder that would own, actually or constructively, 5% or more (by vote or value) of the outstanding Alpha Tau ordinary shares immediately after the Business Combination that fails to enter into a valid “gain recognition agreement” with respect to the transferred HCCC Common Stock) (collectively, the “Intended Tax Treatment”). The parties intend to report the Business Combination in a manner consistent with the Intended Tax Treatment. However, there are significant factual and legal uncertainties as to whether the Business Combination will qualify for the Intended Tax Treatment. For example, under Section 368(a) of the Code, the acquiring corporation must continue, either directly or indirectly through certain controlled corporations, either a significant line of the acquired corporation’s historic business or use a significant portion of the acquired corporation’s historic business assets in a business. However, there is an absence of guidance directly on point as to how the provisions of Section 368(a) of the Code apply in the case of an acquisition of a corporation with only investment-type assets, such as HCCC. Moreover, Section 367(a) of the Code and the applicable Treasury regulations promulgated thereunder provide that where a U.S. Holder exchanges stock in a U.S. corporation for stock in a non-U.S. corporation in a transaction that would otherwise qualify as a reorganization within the meaning of Section 368(a) of the Code, the U.S. Holder is required to recognize gain, but not loss, realized on such exchange unless certain requirements are met. There are significant factual and legal uncertainties concerning the determination of certain of these requirements. Moreover, the closing of the Business Combination is not conditioned upon the receipt of an opinion of counsel that the Business Combination will qualify for the Intended Tax Treatment, and neither HCCC nor Alpha Tau intends to request a ruling from the Internal Revenue Service (the “IRS”) regarding the U.S. federal income tax treatment of the Business Combination. Accordingly, no assurance can be given that the IRS will not challenge the Intended Tax Treatment or that a court will not sustain a challenge by the IRS.

If, as of the Closing Date, any requirement for Section 368(a) of the Code is not met, then a U.S. Holder of HCCC Common Stock and/or HCCC warrants may recognize gain or loss in an amount equal to the difference, if any, between the fair market value (as of the Closing Date) of Alpha Tau ordinary shares and/or Alpha Tau warrants received in the Business Combination, over such U.S. Holder’s aggregate tax basis in the corresponding HCCC Common Stock and/or HCCC warrants surrendered by such U.S. Holder in the Business Combination.

If, as of the Closing Date, the Business Combination qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, but any requirement for Section 367(a) of the Code is not satisfied, then a U.S. Holder of HCCC Common Stock would recognize gain (but not loss) in an amount equal to the excess, if any, of the fair market value as of the Closing Date of Alpha Tau ordinary shares (and, if U.S. Holder’s HCCC warrants convert to Alpha Tau warrants, the fair market value of the Alpha Tau warrants) received in the Business Combination, over such U.S. Holder’s aggregate tax basis in the HCCC Common Stock (and HCCC warrants, if any) surrendered by such U.S. Holder in the Business Combination.

U.S. Holders of HCCC Common Stock and/or HCCC warrants are urged to consult their own tax advisors to determine the tax consequences if the Business Combination does not qualify for the Intended Tax Treatment.

The IRS may not agree that Alpha Tau should be treated as a non-U.S. corporation for U.S. federal income tax purposes.

Under current U.S. federal income tax law, a corporation generally will be considered to be a U.S. corporation for U.S. federal income tax purposes if it is created or organized in the United States or under the law

 

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of the United States or of any State. Accordingly, under generally applicable U.S. federal income tax rules, Alpha Tau, which is incorporated and tax resident in Israel, would generally be classified as a non-U.S. corporation for U.S. federal income tax purposes. Section 7874 of the Code and the Treasury regulations promulgated thereunder, however, contain specific rules that may cause a non-U.S. corporation to be treated as a U.S. corporation for U.S. federal income tax purposes. If it were determined that Alpha Tau is treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code and the Treasury regulations promulgated thereunder, Alpha Tau would be liable for U.S. federal income tax on its income in the same manner as any other U.S. corporation and certain distributions made by Alpha Tau to Non-U.S. Holders (as defined in “Certain Material U.S. Federal Income Tax Considerations”) of Alpha Tau may be subject to U.S. withholding tax.

As more fully described in the section titled “Certain Material U.S. Federal Income Tax Considerations—U.S. Federal Income Tax Treatment of Alpha Tau—Tax Residence of Alpha Tau for U.S. Federal Income Tax Purposes,” based on the terms of the Business Combination and certain factual assumptions, Alpha Tau does not currently expect to be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code after the Business Combination. However, the application of Section 7874 of the Code is complex, subject to detailed regulations (the application of which is uncertain in various respects and would be impacted by changes in such U.S. Treasury regulations with possible retroactive effect) and subject to certain factual uncertainties, some of which must be finally determined after the completion of the Business Combination. Accordingly, there can be no assurance that the IRS will not challenge the status of Alpha Tau as a non-U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code or that such challenge would not be sustained by a court.

If the IRS were to successfully challenge under Section 7874 of the Code Alpha Tau’s status as a non-U.S. corporation for U.S. federal income tax purposes, Alpha Tau and certain Alpha Tau shareholders may be subject to significant adverse tax consequences, including a higher effective corporate income tax rate on Alpha Tau and future withholding taxes on certain Alpha Tau shareholders, depending on the application of any applicable income tax treaty that may apply to reduce such withholding taxes.

See “Certain Material U.S. Federal Income Tax Considerations—U.S. Federal Income Tax Treatment of Alpha Tau—Tax Residence of Alpha Tau for U.S. Federal Income Tax Purposes” for a more detailed discussion of the application of Section 7874 of the Code to Alpha Tau. You should consult your own advisors regarding the application of Section 7874 of the Code to the Business Combination and the tax consequences if the classification of Alpha Tau as a non-U.S. corporation is not respected.

Risks Related to the Adjournment Proposal

If the Adjournment Proposal is not approved, HCCC’s board of directors will not have the ability to adjourn the special meeting to a later date.

If, at the special meeting, the chairman presiding over the special meeting determines that it would be in the best interests of HCCC to adjourn the special meeting to give HCCC more time to consummate the Business Combination for whatever reason (such as if the Business Combination Proposal is not approved, or if HCCC would have net tangible assets of less than $5,000,001 either immediately prior to or upon the consummation of the Transactions, or if additional time is needed to fulfil other closing conditions), the chairman presiding over the special meeting will seek approval to adjourn the special meeting to a later date or dates. If the Adjournment Proposal is not approved, the chairman will not have the ability to adjourn the special meeting to a later date in order to solicit further votes. In such event, the Business Combination would not be completed.

Risks Related to HCCC’s Accounting of its Warrants

In this section “we,” “us” and “our” refer to HCCC.

 

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HCCC’s warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.

On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing HCCC’s warrants. As a result of the SEC Statement, HCCC reevaluated the accounting treatment of its 13,750,000 public warrants and its 6,800,000 private placement warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.

As a result, included on HCCC’s balance sheet as of March 31, 2021 are derivative liabilities related to embedded features contained within our warrants. ASC 815 provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, HCCC’s financial statements and results of operations may fluctuate quarterly based on factors which are outside of HCCC’s control. Due to the recurring fair value measurement, HCCC expects that it will recognize non-cash gains or losses on its warrants each reporting period and that the amount of such gains or losses could be material.

HCCC identified a material weakness in their internal control over financial reporting as of June 30, 2021. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

Following this issuance of the SEC Statement, after consultation with HCCC’s independent registered public accounting firm, HCCC’s our management and audit committee concluded that, in light of the SEC Statement, HCCC had identified a material weakness in internal controls over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis.

Effective internal controls are necessary to provide reliable financial reports and prevent fraud. HCCC continues to evaluate steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.

If we or HCCC identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our share price may decline as a result. We cannot assure you that the measures taken to date, or any measures that may be taken in the future, will be sufficient to avoid potential future material weaknesses.

HCCC, and following the Business Combination, the combined company, may face litigation and other risks as a result of the material weakness in internal control over financial reporting.

As a result of the material weakness in HCCC’s internal controls over financial reporting described above, the change in accounting for the warrants, and other matters raised or that may in the future be raised by the SEC, HCCC faces potential for litigation or other disputes which may include, among others, claims invoking the

 

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federal and state securities laws, contractual claims or other claims arising from the material weaknesses in internal control over financial reporting and the preparation of our financial statements. As of the date of this proxy statement/prospectus, HCCC has no knowledge of any such litigation or dispute. However, HCCC can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete the Business Combination.

Risks Related to Redemption

The ability of HCCC public stockholders to exercise redemption rights with respect to a large number of HCCC Shares could increase the probability that the Business Combination would be unsuccessful and that you would have to wait for liquidation in order to redeem HCCC Class A Stock.

The obligations of Alpha Tau and Merger Sub to consummate the Business Combination is conditioned upon, among other things, HCCC having an amount of available cash in its Trust Account, following payment by HCCC to its stockholders who have validly elected to redeem their shares of HCCC Class A Stock and deferred underwriting fees of approximately $10 million, plus proceeds from the PIPE Investment, of no less than $225,000,000. If the Business Combination is not consummated, you would not receive your pro rata portion of the Trust Account until the Trust Account is liquidated. If you are in need of immediate liquidity, you could attempt to sell your HCCC Class A Stock in the open market; however, at such time HCCC Class A 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 HCCC’s redemption until HCCC liquidates or you are able to sell your HCCC Class A Stock in the open market.

Public stockholders, together with any affiliates of theirs or any other person with whom they are acting in concert or as a “group,” will be restricted from seeking redemption rights with respect to more than 15% of the public shares.

A public stockholder of HCCC, together with any affiliate or any other person with whom such stockholder is acting in concert or as a “group,” will be restricted from seeking redemption rights with respect to more than 15% of the HCCC public shares. Accordingly, if you hold more than 15% of the HCCC public shares and the Business Combination Proposal is approved, you will not be able to seek redemption rights with respect to the full amount of your public shares and may be forced to hold the shares in excess of 15% or sell them in the open market. HCCC cannot assure you that the value of such excess shares will appreciate over time following a business combination or that the market price of HCCC Class A Stock will exceed the per-share redemption price.

There is no guarantee that a HCCC stockholder’s decision to redeem its shares for a pro rata portion of the Trust Account will put the stockholder in a better future economic position.

There is no assurance as to the price at which an HCCC stockholder may be able to sell its Alpha Tau ordinary shares in the future following the completion of the Transactions or shares with respect to any alternative business combination. Certain events following the consummation of any initial business combination, including the Transactions, may cause an increase in the share price, and may result in a lower value realized now than a stockholder of HCCC might realize in the future had the stockholder not redeemed his, her or its shares. Similarly, if a stockholder does not redeem its shares, the stockholder will bear the risk of ownership of the public shares after the consummation of any initial business combination, and there can be no assurance that a stockholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement/prospectus. A stockholder should consult the stockholder’s tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

 

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HCCC stockholders do not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. To liquidate their investment, therefore, HCCC stockholders may be forced to redeem or sell their public shares or warrants, potentially at a loss.

HCCC stockholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of: (i) HCCC’s completion of the Business Combination or, if the Business Combination is not completed, an alternative business combination, and then only in connection with those shares of HCCC Class A Stock that such stockholder properly elected to redeem, subject to the limitations described herein, and (ii) the redemption of HCCC’s public shares if HCCC is unable to complete an initial business combination by January 20, 2023, subject to applicable law and as further described herein. In addition, if HCCC plans to redeem its public shares because HCCC is unable to complete an initial business combination by January 20, 2023, for any reason, compliance with Delaware law may require that HCCC submit a plan of dissolution to HCCC’s then-existing stockholders for approval prior to the distribution of the proceeds held in HCCC’s Trust Account. In that case, public stockholders may be forced to wait beyond January 20, 2023, before they receive funds from the Trust Account. In no other circumstances will Public Stockholders have any right or interest of any kind in the Trust Account. Accordingly, to liquidate their investment, public stockholders may be forced to sell their public shares or warrants, potentially at a loss.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS; MARKET, RANKING AND OTHER INDUSTRY DATA

This proxy statement/prospectus contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this proxy statement/prospectus, including statements regarding Alpha Tau’s, HCCC’s or the combined company’s future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential” or the negative of these terms or other similar expressions. Forward-looking statements include, without limitation, Alpha Tau’s or HCCC’s expectations concerning the outlook for their or the combined company’s business, productivity, plans and goals for future operational improvements and capital investments, operational performance, future market conditions or economic performance and developments in the capital and credit markets and expected future financial performance, as well as any information concerning possible or assumed future results of operations of the combined company as set forth in the sections of this proxy statement/prospectus titled “Proposal One—The Business Combination Proposal—HCCC’s Board of Directors’ Reasons for the Business Combination and Recommendation of Its Board of Directors.” Forward-looking statements also include statements regarding the expected benefits of the proposed Business Combination between Alpha Tau and HCCC.

Forward-looking statements involve a number of risks, uncertainties and assumptions, and actual results or events may differ materially from those projected or implied in those statements. Important factors that could cause such differences include, but are not limited to:

 

   

Alpha Tau has incurred significant losses since inception, and expects to incur losses over the next several years and may not be able to achieve or sustain revenues or profitability in the future;

 

   

Even if the Transactions are consummated, Alpha Tau will need substantial additional funding, and if Alpha Tau is unable to raise capital when needed, Alpha Tau could be forced to delay, reduce or terminate the development of its Alpha DaRT technology or other product discovery and development programs or commercialization efforts;

 

   

Alpha Tau’s limited operating history may make it difficult for you to evaluate the success of Alpha Tau’s business to date and to assess its future viability;

 

   

Alpha Tau’s approach to the development of its proprietary Alpha DaRT technology represents a novel approach to radiation therapy, which creates significant and potentially unpredictable challenges for Alpha Tau;

 

   

The commercial success of Alpha Tau’s Alpha DaRT technology, if authorized for commercial sale or certified, will depend in part upon public perception of radiation therapies, and to a lesser extent, radiopharmaceuticals, and the degree of their market acceptance by physicians, patients, healthcare payors and others in the medical community;

 

   

The ongoing COVID-19 pandemic could continue to adversely impact Alpha Tau’s business, including its clinical trials, supply chain and business development activities;

 

   

The market opportunities for Alpha Tau’s Alpha DaRT technology may be smaller than it anticipated or may be limited to those patients who are ineligible for or have failed prior treatments. If Alpha Tau encounter difficulties enrolling patients in its clinical trials, its clinical development activities could be delayed or otherwise adversely affected;

 

   

Alpha Tau currently has no marketing and sales organization and has no experience in marketing products. If Alpha Tau is unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell its Alpha DaRT technology, if approved for commercial sale, Alpha Tau may not be able to generate product revenue;

 

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Alpha Tau currently conducts and in the future intends to continue conducting pre-clinical studies, clinical trials for its Alpha DaRT technology outside the United States, and the FDA and similar foreign regulatory authorities may not accept data from such trials;

 

   

Alpha Tau’s Alpha DaRT technology and operations are subject to extensive government regulation and oversight both in the United States and abroad, and our failure to comply with applicable requirements could harm our business;

 

   

Alpha Tau may not receive, or may be delayed in receiving, the necessary marketing authorizations or certifications for its Alpha DaRT technology or any future products or product candidates, and failure to timely obtain necessary marketing authorizations or certifications for our product candidates would have a material adverse effect on Alpha Tau’s business;

 

   

If Alpha Tau does not obtain and maintain international regulatory registrations, marketing authorizations or certifications for any product candidates it develops, Alpha Tau will be unable to market and sell such product candidates outside of the United States;

 

   

If in the future Alpha DaRT is approved for commercial sale or certified, but Alpha Tau is unable to obtain adequate reimbursement or insurance coverage from third-party payors, it may not be able to generate significant revenue;

 

   

Alpha Tau may be unable to obtain a sufficient or sufficiently pure supply of radioisotopes to support clinical development or at commercial scale;

 

   

If Alpha Tau is unable to obtain and maintain patent or other intellectual property protection for its Alpha DaRT technology and for any other products or product candidates that Alpha Tau develops, or if the scope of the patent or other intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and Alpha Tau’s ability to commercialize any product candidates that it may develop, and its technology may be adversely affected;

 

   

Alpha Tau will incur increased costs as a result of operating as a public company, and its management will devote substantial time to new compliance initiatives; and

 

   

The other matters described in the section titled “Risk Factors” beginning on page 20.

In addition, the Transactions are subject to the satisfaction of the conditions to the completion of the Business Combination set forth in the Merger Agreement and the absence of events that could give rise to the termination of the Merger Agreement, the possibility that the Business Combination does not close, and risks that the proposed Business Combination disrupts current plans and operations and business relationships, or poses difficulties in attracting or retaining employees for Alpha Tau.

Alpha Tau and HCCC caution you against placing undue reliance on forward-looking statements, which reflect current beliefs and are based on information currently available as of the date a forward-looking statement is made. Forward-looking statements set forth herein speak only as of the date of this proxy statement/prospectus. Neither Alpha Tau nor HCCC undertakes any obligation to revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs. In the event that any forward-looking statement is updated, no inference should be made that Alpha Tau or HCCC will make additional updates with respect to that statement, related matters, or any other forward-looking statements. Any corrections or revisions and other important assumptions and factors that could cause actual results to differ materially from forward-looking statements, including discussions of significant risk factors, may appear, up to the consummation of the Business Combination, in HCCC’s public filings with the SEC or, upon and following the consummation of the Business Combination, in Alpha Tau’s public filings with the SEC, which are or will be (as appropriate) accessible at www.sec.gov, and which you are advised to consult. For additional information, please see the section titled “Where You Can Find More Information” beginning on page 311.

 

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Market, ranking and industry data used throughout this proxy statement/prospectus, including statements regarding market size and technology adoption rates, is based on the good faith estimates of Alpha Tau’s management, which in turn are based upon Alpha Tau’s Management’s review of internal surveys, independent industry surveys and publications including third party research and publicly available information. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. While Alpha Tau is not aware of any misstatements regarding the industry data presented herein, its estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk Factors” and “Alpha Tau’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this proxy statement/prospectus.

 

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SPECIAL MEETING OF HCCC STOCKHOLDERS

General

HCCC is furnishing this proxy statement/prospectus to its stockholders as part of the solicitation of proxies by its board of directors for use at the special meeting of HCCC stockholders and at any adjournment or postponement thereof. This proxy statement/prospectus provides you with information you need to know to be able to vote or instruct your vote to be cast at the special meeting.

Date, Time and Place of Special Meeting of HCCC’s Stockholders

The special meeting will be held on                 , 2021, at                  a.m., Eastern Time, solely over the Internet by means of a live audio webcast. You may attend the special meeting webcast by accessing the web portal located at https://                 and following the instructions set forth on your proxy card.

Purpose of the HCCC Special Meeting

At the special meeting, HCCC is asking its stockholders:

 

1.

Proposal No. 1 — The Business Combination Proposal — to consider and vote upon a proposal to approve and adopt the Merger Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A, and the transactions contemplated thereby, including the Business Combination;

 

2.

Proposal No. 2 — The Charter Proposals — to approve the following material differences between the HCCC Charter and the Alpha Tau Articles to be effective upon the consummation of the Business Combination:

i. the name of the new public entity will be “Alpha Tau Medical Ltd.” as opposed to “Healthcare Capital Corp.”;

ii. the Alpha Tau Articles will provide for one class of ordinary shares as opposed to the two classes of HCCC Common Stock provided for in the HCCC Charter;

iii. Alpha Tau’s corporate existence is perpetual as opposed to HCCC’s corporate existence which terminates if a business combination is not consummated within a specified period of time;

iv. the Alpha Tau Articles will not include the various provisions applicable only to special purpose acquisition corporations that the HCCC Charter contains; and

 

3.

Proposal No. 3 — The Adjournment Proposal — to consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, if the parties are not able to consummate the Business Combination.

Recommendation of HCCC’s Board of Directors

HCCC’s board of directors has determined that each of the proposals outlined above is fair to and in the best interests of HCCC and its stockholders and recommended that HCCC stockholders vote “FOR” the Business Combination Proposal, “FOR” the Charter Proposals, and “FOR” the Adjournment Proposal, if presented.

Record Date; Persons Entitled to Vote

HCCC stockholders will be entitled to vote or direct votes to be cast at the special meeting if they owned shares of HCCC Common Stock at the close of business on                 , 2021, which is the record date for the special meeting. Stockholders will have one vote for each share of HCCC Common Stock owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. HCCC’s warrants do not have voting rights. On the record date, there were                  shares of HCCC Common Stock outstanding, of which                were public shares.

 

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Quorum

A quorum is the minimum number of shares of HCCC Common Stock that must be present to hold a valid meeting. A quorum will be present at the HCCC special meeting if a majority of the voting power of the issued and outstanding shares of HCCC Common Stock entitled to vote at the meeting are represented at the virtual special meeting or by proxy. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum. The Class A Stock and Class B Stock are entitled vote together as a single class on all matters to be considered at the special meeting.

Vote Required

The proposals to be presented at the special meeting will require the following votes:

Business Combination Proposal — The approval of the Business Combination Proposal will require the affirmative vote of the holders of a majority of the issued and outstanding HCCC Common Stock. Abstentions will have the same effect as a vote “against” the Business Combination Proposal. Brokers are not entitled to vote on the Business Combination Proposal absent voting instructions from the beneficial holder and, consequently, broker non-votes will have the effect of voting against the Business Combination Proposal. The Transactions will not be consummated if HCCC has less than $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) either immediately prior to or upon consummation of the Transactions.

Charter Proposals — The approval of the Charter Proposals will require the affirmative vote of the holders of a majority of the issued and outstanding HCCC Common Stock. Abstentions will have the same effect as a vote “against” the Charter Proposals. The Charter Proposal to approve “Alpha Tau Medical Ltd.” as the name of the new public entity is a routine proposal and, accordingly, your broker, bank or nominee may vote your shares with respect to such proposal without receiving voting instructions. Consequently, there should be no broker non-votes with respect to such proposal. Each other Charter Proposal is considered a non-routine proposal, and, accordingly, brokers are not entitled to vote on those proposals without receiving voting instructions, and broker non-votes will have the same effect as a vote “against” each such proposal.

Adjournment Proposal — The approval of the Adjournment Proposal will require the affirmative vote of the holders of a majority of the shares of HCCC Common Stock present and entitled to vote at the special meeting. Abstentions will have the same effect as a vote “against” on the Adjournment Proposal. Broker non-votes will have no effect on the Adjournment Proposal.

Voting Your Shares

If you are a holder of record of HCCC Common Stock, there are two ways to vote your shares of HCCC Common Stock at the special meeting:

 

   

By Mail. You may vote by proxy by completing the enclosed proxy card and returning it in the postage-paid return envelope. If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted “FOR” all of the proposals in accordance with the recommendation of HCCC’s board of directors. Proxy cards received after a matter has been voted upon at the special meeting will not be counted.

 

   

In Person. You may attend the special meeting webcast and vote electronically using the ballot provided to you during the webcast. You may attend the special meeting webcast by accessing the web portal located at https://                 and following the instructions set forth on your proxy card. See “Questions and Answers about the Business Combination and the Special Meeting —When and where will the special meeting take place?” for more information.

 

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Revoking Your Proxy

If you are a holder of record of HCCC Common Stock and you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

 

   

you may send another proxy card to HCCC’s secretary with a later date so that it is received prior to the vote at the special meeting or attend the live webcast of the special meeting and vote electronically;

 

   

you may notify HCCC’s secretary in writing, prior to the vote at the special meeting, that you have revoked your proxy; or

 

   

you may attend the live webcast of the special meeting and vote electronically or revoke your proxy electronically, although your attendance alone will not revoke any proxy that you have previously given.

If you hold your HCCC Common Stock in “street name,” you may submit new instructions on how to vote your shares by contacting your broker, bank or other nominee.

Who Can Answer Your Questions About Voting Your Shares

If you are an HCCC stockholder and have any questions about how to vote or direct a vote in respect of your shares of HCCC Common Stock, you may call                 , HCCC’s proxy solicitor, at                 .

Redemption Rights

Holders of public shares may seek to redeem their shares for cash, regardless of whether they vote for or against, or whether they abstain from voting on, the Business Combination Proposal. Any stockholder holding public shares may demand that HCCC redeem such shares for their pro rata portion of the Trust Account (which, for illustrative purposes, was $                 per share as of                 , 2021, the special meeting record date), calculated as of two (2) business days prior to the anticipated consummation of the merger. If a holder properly seeks redemption as described in this section and the merger with Alpha Tau is consummated, HCCC will redeem these shares for a pro rata portion of funds deposited in the Trust Account and the holder will no longer own these shares following the consummation of the Business Combination.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the public shares. Accordingly, all public shares in excess of 15% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed for cash.

Holders of Founder Shares will not have redemption rights with respect to such shares.

Holders may demand redemption by delivering their stock, either physically or electronically using Depository Trust Company’s DWAC System, to HCCC’s transfer agent prior to the vote at the Special Meeting. If you hold the shares in “street name,” you will have to coordinate with your broker to have your shares certificated or delivered electronically. Certificates that have not been tendered (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming stockholder. In the event the proposed merger is not consummated this may result in an additional cost to stockholders for the return of their shares.

 

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HCCC’s transfer agent can be contacted at the following address:

Continental Stock Transfer & Trust Company

1 State Street — 30th Floor

New York, New York 10004

Attn: Mark Zimkind

Email: mzimkind@continentalstock.com

Any request to redeem such shares, once made, may be withdrawn at any time up to the vote on the Business Combination Proposal. Furthermore, if a holder of a public share delivered its certificate in connection with an election of its redemption and subsequently decides prior to the applicable date not to elect to exercise such rights, it may simply request that the transfer agent return the certificate (physically or electronically).

If the Business Combination is not approved or completed for any reason, then HCCC’s public stockholders who elected to exercise their redemption rights will not be entitled to redeem their shares for their pro rata portion of the Trust Account, as applicable. In such case, HCCC will promptly return any shares delivered by public holders. If HCCC would be left with less than $5,000,001 of net tangible assets as a result of the holders of public shares properly demanding redemption of their shares for cash, HCCC will not be able to consummate the Business Combination.

The closing price of Class A Stock on                 , 2021, the special meeting record date, was $                . The cash held in the Trust Account on such date was approximately $                 million ($                 per public share). Prior to exercising redemption rights, stockholders should verify the market price of Class A Stock as they may receive higher proceeds from the sale of their Class A Stock in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price. HCCC cannot assure its stockholders that they will be able to sell their shares of Class A Stock in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in its securities when its stockholders wish to sell their shares.

If a holder of public shares exercises his, her or its redemption rights, then he, she or it will be exchanging its shares of Class A Stock for cash and will no longer own those shares. You will be entitled to receive cash for these shares only if you properly demand redemption no later than the close of the vote on the Business Combination Proposal by delivering your stock certificate (either physically or electronically) to HCCC’s transfer agent prior to the vote at the special meeting, and the Business Combination is consummated.

For a detailed discussion of the material U.S. federal income tax considerations for stockholders with respect to the exercise of these redemption rights, see “Certain Material U.S. Federal Income Tax Considerations —U.S. Holders Exercising Redemption Rights with Respect to HCCC Common Stock” beginning on page 260. The consequences of a redemption to any particular stockholder will depend on that stockholder’s particular facts and circumstances. Accordingly, you are urged to consult your tax advisor to determine your tax consequences from the exercise of your redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws in light of your particular circumstances.

Appraisal Rights

HCCC stockholders and holders of HCCC warrants do not have appraisal rights in connection with the Transactions under the DGCL.

Proxy Solicitation Costs

HCCC is soliciting proxies on behalf of its board of directors. This solicitation is being made by mail but also may be made by telephone. HCCC and its directors, officers and employees may also solicit proxies online. HCCC will file with the SEC all scripts and other electronic communications as proxy soliciting materials. HCCC will bear the cost of the solicitation.

 

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HCCC has hired                  to assist in the proxy solicitation process. HCCC will pay to                  a fee of $                , plus disbursements.

HCCC will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. HCCC will reimburse them for their reasonable expenses.

Other Matters

As of the date of this proxy statement/prospectus, HCCC’s board of directors does not know of any business to be presented at the special meeting other than as set forth in the notice accompanying this proxy statement/prospectus. If any other matters should properly come before the special meeting, it is intended that the shares represented by proxies will be voted with respect to such matters in accordance with the judgment of the persons voting the proxies.

Interests of HCCC’s Officers and Directors in the Transactions

In considering the recommendation of HCCC’s board of directors to vote in favor of the Business Combination Proposal and the Charter Proposals, stockholders should keep in mind that the Sponsor and HCCC’s directors and executive officers have interests in such proposals that are different from, or in addition to, those of HCCC’s stockholders generally. In particular:

 

   

If the Business Combination with Alpha Tau or another business combination is not consummated by January 20, 2023 (or such later date as may be approved by HCCC’s stockholders in an amendment to the HCCC Charter), HCCC will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares for cash and, subject to the approval of its remaining stockholders and HCCC’s board of directors, dissolving and liquidating. In such event, the Founder Shares held by the Sponsor, which were acquired for an aggregate purchase price of $25,000 prior to the HCCC IPO, would be worthless because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Such shares had an aggregate market value of $                 based upon the closing price of $                 per share on Nasdaq on                 , 2021. On the other hand, if the Business Combination is consummated, each outstanding share of HCCC Common Stock (other than the shares forfeited pursuant to the Sponsor Support Agreement) will be converted into one Alpha Tau ordinary share subject to adjustment described herein. In the aggregate, the 5,843,750 founder shares will be converted into HCCC Class A Stock and exchanged for 5,843,750 Alpha Tau ordinary shares.

 

   

The Sponsor purchased 6,800,000 private placement warrants from HCCC for $1.00 per private warrant. This purchase took place on a private placement basis simultaneously with the consummation of the HCCC IPO and the subsequent exercise of the underwriter’s overallotment option. Nearly all of the proceeds HCCC received from these purchases were placed in the Trust Account. Such private placement warrants had an aggregate market value of $                 based upon the closing price of $                 per warrant on Nasdaq on                 , 2021. The private placement warrants will become worthless if HCCC does not consummate a business combination by January 20, 2023 (or such later date as may be approved by HCCC’s stockholders in an amendment to the HCCC Charter). On the other hand, if the Business Combination is consummated, each outstanding private placement warrant (other than the warrants forfeited pursuant to the Sponsor Support Agreement) will become exercisable for one Alpha Tau ordinary share for $11.50 per share, subject to adjustment as described herein.

 

   

If HCCC is unable to complete a business combination within the required time period, the Sponsor will be liable under certain circumstances described herein to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by HCCC for services rendered or contracted for or products sold to HCCC. If HCCC consummates a business combination, on the other hand, HCCC will be liable for all such claims.

 

   

The Sponsor and HCCC’s officers and directors and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on HCCC’s behalf, such

 

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as identifying and investigating possible business targets and business combinations. However, if HCCC fails to consummate a business combination within the required period, they will not have any claim against the Trust Account for reimbursement. Accordingly, HCCC may not be able to reimburse these expenses if the Business Combination or another business combination is not completed by January 20, 2023 (or such later date as may be approved by HCCC’s stockholders in an amendment to the HCCC Charter). As of the record date, the Sponsor and HCCC’s officers and directors and their affiliates had incurred approximately $                  of unpaid reimbursable expenses.

 

   

the Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate;

 

   

Based on the difference in the purchase price of $0.004 that the Sponsor paid for the founder shares, as compared to the purchase price of $10.00 per Public Unit sold in the IPO, the Sponsor may earn a positive rate of return even if the share price of the Combined Company after the Closing falls below the price initially paid for the Public Units in the IPO and the Public Shareholders experience a negative rate of return following the Closing of the Business Combination.

 

   

In the event that a business combination is not effected, the Sponsor will not be entitled to any reimbursement of funds invested in HCCC. In total, the Sponsor has invested $6,825,000 for securities that would be worthless absent the completion of a business combination. The Sponsor, its affiliates and HCCC’s officers and directors have no loans outstanding to HCCC.

 

   

The Merger Agreement provides for the continued indemnification of HCCC’s current directors and officers and the continuation of directors and officers liability insurance covering HCCC’s current directors and officers.

 

   

HCCC’s Sponsor, officers and directors (or their affiliates) may make loans from time to time to HCCC to fund certain capital requirements. On September 2, 2020, the Sponsor agreed to loan HCCC an aggregate of up to $300,000 to cover expenses related to the HCCC IPO pursuant to a promissory note that was repaid in full on March 31, 2021. Additional loans may be made after the date of this proxy statement/prospectus. If the Business Combination is not consummated, the loans will not be repaid and will be forgiven except to the extent there are funds available to HCCC outside of the Trust Account.

 

   

Dr. David M. Milch, HCCC’s chairman, will be a member of the board of directors of Alpha Tau following the closing of the Business Combination and, therefore, in the future Dr. Milch will receive any cash fees, stock options or stock awards that Alpha Tau’s board of directors determines to pay to its non-executive directors.

 

   

In addition, a relative of Dr. Milch owns certain equity interests in Alpha Tau. Milch Investment Holdings LLC (of which one of Dr. Milch’s immediate family members is the beneficiary) is a passive investor in Althera Medical Ltd. (“Althera”), which owns 12,504,000 Alpha Tau ordinary shares. Milch Investment Holdings LLC’s interests in Althera was obtained through two investments totaling $252,500. Althera is under voluntary liquidation. In connection with the liquidation, Milch Investment Holdings LLC will eventually receive a percentage of Althera’s assets (including its holdings in Alpha Tau), which will be distributed to the shareholders of Althera in accordance with the provisions of Althera’s Articles of Association, and the distribution process and preference detailed therein. Milch Investment Holdings II LLC (of which one of Dr. Milch’s immediate family members is the beneficiary) directly owns 250,000 Alpha Tau Series B Preferred Shares (the “MIH Shares”). The MIH Shares were purchased (on the same terms as other Series B investors) for an aggregate price of $1.0 million in April 2020 and had an implied aggregate value of $2.26 million based on the consideration under the Merger Agreement. Following the consummation of the Business Combination, the value of Dr. Milch’s shares will fluctuate based on the trading price of the Company’s ordinary shares on Nasdaq. Based on the $9.91 closing price of HCCC’s Class A Stock on October 11, 2021, the MIH shares had an implied aggregate value of $2.24 million.

 

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Purchases of HCCC Shares

At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding HCCC or its securities and subject to certain other conditions and procedures, the Sponsor, HCCC’s officers and directors, Alpha Tau, Alpha Tau shareholders and/or their respective affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the Business Combination Proposal, or execute agreements to purchase shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares of HCCC Common Stock or vote their shares in favor of the Business Combination Proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements to consummate the Business Combination where it appears that such requirements would otherwise not be met. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and, with Alpha Tau’s consent, the transfer to such investors or holders of shares or warrants owned by the Sponsor for nominal value.

Entering into any such arrangements may have a depressive effect on HCCC Class A Stock. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he owns, either prior to or immediately after the special meeting.

If such transactions are effected, the consequence could be to cause the Business Combination to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the Business Combination Proposal and other proposals and would likely increase the chances that such proposals would be approved. No agreements dealing with the above arrangements or purchases have been entered into as of the date of this proxy statement/prospectus by the Sponsor, HCCC officers and directors, Alpha Tau, Alpha Tau shareholders or any of their respective affiliates. HCCC will file a Current Report on Form 8-K to disclose arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or the satisfaction of any closing conditions. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

 

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PROPOSAL ONE—THE BUSINESS COMBINATION PROPOSAL

The following is a discussion of the proposed Business Combination and the Merger Agreement. This is a summary only and may not contain all of the information that is important to you. This summary is subject to, and qualified in its entirety by reference to, the Merger Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A. HCCC stockholders are urged to read this entire proxy statement/prospectus carefully, including the Merger Agreement, for a more complete understanding of the Business Combination.

General

Transaction Structure

The Merger Agreement provides for the merger of Merger Sub with and into HCCC, with HCCC surviving the merger as a wholly owned subsidiary of Alpha Tau.

Pro Forma Capitalization

The pro forma equity valuation of the Company upon consummation of the Transactions is estimated to be approximately $1 billion (assuming no redemptions, and based only on outstanding shares and vested warrants/options on a net exercise basis). We estimate that at the Effective Time assuming none of HCCC’s public stockholders demand of their public shares pursuant to the HCCC Charter, the securityholders of Alpha Tau will own approximately 56.3% of the outstanding Alpha Tau ordinary shares and the securityholders of HCCC, and certain accredited investors purchasing PIPE Shares will own the remaining Alpha Tau ordinary shares.

Merger Consideration

Immediately prior to the Effective Time, (i) each Alpha Tau preferred share will be automatically converted into such number of Alpha Tau ordinary shares as determined in accordance with the existing articles of association of Alpha Tau; (ii) each Alpha Tau Ordinary Share that is issued and outstanding immediately prior to the Effective Time will be split in accordance with the Split Factor. The Split Factor was set as of the date of the execution of the Merger Agreement and was based upon the pre-money equity value of the Company (rounded to the nearest whole number) (the “Share Split”); and (iii) outstanding securities convertible into Alpha Tau ordinary shares shall be adjusted to give effect to the foregoing transactions and remain outstanding.

Pursuant to the Merger Agreement and assuming the Share Split has been effected, at the Effective Time (a) each share of Class A Stock outstanding immediately prior to the Effective Time will be exchanged for one Alpha Tau ordinary share, subject to adjustment described herein, (b) each share of Class B Stock outstanding immediately prior to the Effective Time, after giving effect to the forfeiture of 1,031,250 shares of Class B Stock pursuant to the Sponsor Support Agreement, will be exchanged for one Alpha Tau ordinary share, subject to adjustment described herein and (c) each HCCC warrant outstanding immediately prior to the Effective Time, after giving effect to the forfeiture of 1,020,000 HCCC warrants pursuant to the Sponsor Support Agreement will be assumed by Alpha Tau and will become an Alpha Tau warrant, with the number of Alpha Tau ordinary shares underlying the Alpha Tau warrants and the exercise price of such Alpha Tau warrants subject to adjustment in accordance with the Merger Agreement in the event of a share split, share dividend or distribution, or any change in Alpha Tau’s share capital by reason of any split-up, reverse share split, recapitalization, combination, reclassification, exchange of shares, in each case less any applicable withholding taxes.

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