As filed with the U.S. Securities and Exchange Commission on January 19, 2021.
Registration No. 333-252002
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2 to
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
HealthCor Catalio Acquisition Corp.
(Exact name of registrant as specified in its charter)
| |
Cayman Islands
|
|
|
6770
|
|
|
98-1569027
|
|
| |
(State or other jurisdiction of
incorporation or organization)
|
|
|
(Primary Standard Industrial
Classification Code Number)
|
|
|
(I.R.S. Employer
Identification Number)
|
|
55 Hudson Yards, 28th Floor
New York, New York 10001
Tel.: (212) 622-7800
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
Chris Gaulin
Chief Executive Officer
55 Hudson Yards, 28th Floor
New York, New York 10001
Tel.: (212) 622-7800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
| |
Christian O. Nagler
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
|
|
|
Debbie P. Yee, P.C.
Kirkland & Ellis LLP
609 Main Street
Houston, Texas 77002
Tel: (713) 836-3600
Fax: (713) 836-3601
|
|
|
Frank Lopez, Esq.
Jonathan Ko, Esq.
James M. Shea, Jr., Esq.
Paul Hastings LLP
200 Park Avenue
New York, New York 10166
Tel: (212) 318-6800
Fax: (212) 319-4570
|
|
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of ”large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
|
CALCULATION OF REGISTRATION FEE
|
|
|
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED
|
|
|
|
AMOUNT
BEING
REGISTERED
|
|
|
|
PROPOSED MAXIMUM
OFFERING PRICE
PER SECURITY(1)
|
|
|
|
PROPOSED MAXIMUM
AGGREGATE
OFFERING PRICE(1)
|
|
|
|
AMOUNT OF
REGISTRATION
FEE
|
|
|
Class A ordinary shares, $0.0001 par value(2)(3)
|
|
|
|
17,250,000 shares
|
|
|
|
|
$ |
10.00 |
|
|
|
|
|
$ |
172,500,000 |
|
|
|
|
|
$ |
18,820(4) |
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
172,500,000
|
|
|
|
|
|
$
|
18,820(4)
|
|
|
(1)
Estimated solely for the purpose of calculating the registration fee.
(2)
Includes 2,250,000 Class A ordinary shares, which may be issued upon exercise of a 45-day option granted to the underwriter to cover over-allotments, if any.
(3)
Pursuant to Rule 416, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from share splits, share dividends or similar transactions.
(4)
Previously paid.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JANUARY 19, 2021
PRELIMINARY PROSPECTUS
$150,000,000
HealthCor Catalio Acquisition Corp.
15,000,000 Class A Ordinary Shares
HealthCor Catalio Acquisition Corp. is a newly organized blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.
This is an initial public offering of our Class A ordinary shares, par value $0.0001 per share, which we refer to as our public shares, at an initial public offering price per share of $10.00. The underwriter has a 45-day option from the date of this prospectus to purchase up to 2,250,000 additional public shares to cover over-allotments, if any. Unlike other initial public offerings of special purpose acquisition companies (“SPAC IPOs”), investors in this offering will not receive warrants that would become exercisable following completion of our initial business combination.
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination, subject to the limitations as described herein. If we do not consummate an initial business combination within 24 months from the closing of this offering, we will redeem 100% of the public shares for cash, subject to applicable law and certain conditions as described herein.
Our sponsor, HC Sponsor LLC, has agreed to purchase 500,000 Class A ordinary shares (or 545,000 Class A ordinary shares if the underwriter’s over-allotment option is exercised in full), at a price of $10.00 per share, in a private placement to occur concurrently with the closing of this offering for an aggregate purchase price of $5,000,000 (or $5,450,000 if the over-allotment option is exercised in full). These shares, which we refer to as our private placement shares, are identical to the Class A ordinary shares sold in this offering, subject to certain limited exceptions as described in this prospectus.
Our initial shareholders currently own 4,312,500 Class B ordinary shares (up to 562,500 of which are subject to forfeiture depending on the extent to which the underwriter’s over-allotment option is exercised), which will automatically convert into Class A ordinary shares at the time of our initial business combination as described herein. Prior to the completion of our initial business combination, only holders of our Class B ordinary shares will be entitled to vote on the appointment of directors.
Our sponsor has indicated an interest to purchase up to an aggregate of $25,000,000 of our Class A ordinary shares in a private placement that would occur concurrently with the consummation of our initial business combination. The capital from such private placement would be used as part of the consideration to the sellers in our initial business combination, and any excess capital from such private placement would be used for working capital in the post-business combination company. However, because indications of interest are not binding agreements or commitments to purchase, our sponsor may determine not to purchase any such shares, or to purchase fewer shares than it has indicated an interest in purchasing. Furthermore, we are not under any obligation to sell any such shares. Such investment would be made on terms and conditions determined at the time of the business combination.
Currently, there is no public market for our Class A ordinary shares. We have applied to have our public shares listed on The Nasdaq Capital Market, or Nasdaq, under the symbol “HCAQ.”
We are an “emerging growth company” and “smaller reporting company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page
26 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.
Neither the U.S. Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
| |
|
|
PER SHARE
|
|
|
TOTAL
|
|
|
Public offering price
|
|
|
|
$ |
10.00 |
|
|
|
|
$ |
150,000,000 |
|
|
|
Underwriting discounts and commissions(1)
|
|
|
|
$ |
0.55 |
|
|
|
|
$ |
8,250,000 |
|
|
|
Proceeds, before expenses, to us
|
|
|
|
$ |
9.45 |
|
|
|
|
$ |
141,750,000 |
|
|
(1)
Includes $0.35 per share, or $5,250,000 in the aggregate (or $6,037,500 in the aggregate if the underwriter’s over-allotment option is exercised in full), payable to the underwriter for deferred underwriting commissions to be placed in a trust account located in the United States as described herein and released to the underwriter only upon the consummation of an initial business combination. See also “Underwriting” beginning on page 129 for a description of underwriting compensation payable to the underwriter.
Of the proceeds we receive from this offering and the sale of the private placement shares described in this prospectus, $150,000,000, or $172,500,000 if the underwriter’s over-allotment option is exercised in full ($10.00 per share in either case), will be deposited into a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee.
The underwriter is offering the public shares for sale on a firm commitment basis. The underwriter expects to deliver the public shares to the purchasers on or about , 2021.
Sole Book-Running Manager
Jefferies
The date of this prospectus is , 2021
| |
TABLE OF CONTENTS |
|
|
| |
|
|
|
|
|
Page |
|
|
| |
|
|
|
|
|
1
|
|
|
| |
|
|
|
|
|
26
|
|
|
| |
|
|
|
|
|
57
|
|
|
| |
|
|
|
|
|
58
|
|
|
| |
|
|
|
|
|
61
|
|
|
| |
|
|
|
|
|
62
|
|
|
| |
|
|
|
|
|
64
|
|
|
| |
|
|
|
|
|
65
|
|
|
| |
|
|
|
|
|
70
|
|
|
| |
|
|
|
|
|
93
|
|
|
| |
|
|
|
|
|
102
|
|
|
| |
|
|
|
|
|
105
|
|
|
| |
|
|
|
|
|
107
|
|
|
| |
|
|
|
|
|
129
|
|
|
| |
|
|
|
|
|
137
|
|
|
| |
|
|
|
|
|
137
|
|
|
| |
|
|
|
|
|
137
|
|
|
| |
|
|
|
|
|
F-1
|
|
|
We are responsible for the information contained in this prospectus. We have not, and the underwriter has not, authorized anyone to provide you with different information, and neither we nor the underwriter take any responsibility for any other information others may give to you. We are not, and the underwriter is not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
SUMMARY
This summary only highlights the more detailed information appearing elsewhere in this prospectus. You should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.
Unless otherwise stated in this prospectus or the context otherwise requires, references to:
▪
“amended and restated memorandum and article of association” are to the amended and restated memorandum and articles of association that the company will adopt prior to the consummation of this offering;
▪
“Catalio” are to Catalio Capital Management, LP, a limited partnership organized under the laws of the State of Delaware;
▪
“Companies Act” are to the Companies Act (2021 Revision) of the Cayman Islands, as the same may be amended from time to time;
▪
“company,” “we,” “us,” “our,” or “our company” are to HealthCor Catalio Acquisition Corp., a Cayman Islands exempted company;
▪
“equity-linked securities” are to any debt or equity securities that are convertible, exercisable or exchangeable for our Class A ordinary shares issued in a financing transaction in connection with our initial business combination, including but not limited to a private placement of equity or debt;
▪
“founder shares” are to our Class B ordinary shares initially issued to our sponsor in a private placement prior to this offering and the Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares at the time of our initial business combination (for the avoidance of doubt, such Class A ordinary shares will not be “public shares”);
▪
“HealthCor” are to HealthCor Management, L.P., a limited partnership organized under the laws of the State of Delaware;
▪
“initial shareholders” are to our sponsor and each other holder of founder shares upon the consummation of this offering;
▪
“management” or “our management team” are to our executive officers and directors (including our director nominees who will become directors at the consummation of this offering);
▪
“ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares;
▪
“private placement shares” are to the Class A ordinary shares to be issued to our sponsor in a private placement simultaneously with the closing of this offering (which private placement shares are identical to the public Class A ordinary shares sold in this offering, subject to certain limited exceptions as described in this prospectus);
▪
“public shareholders” are to the holders of our public shares, including our sponsor and management team to the extent our sponsor and/or members of our management team purchase public shares, provided that our sponsor’s and each member of our management team’s status as a “public shareholder” will only exist with respect to such public shares;
▪
“public shares” are to our Class A ordinary shares to be sold in this offering (whether they are purchased in this offering or thereafter in the open market); and
▪
“sponsor” are to HC Sponsor LLC, a Cayman Islands limited liability company, affiliated with HealthCor and Catalio.
Any forfeiture or transfer of shares described in this prospectus will take effect as a surrender of shares for no consideration of such shares as a matter of Cayman Islands law. Any conversion of the Class B ordinary shares described in this prospectus will take effect as a compulsory redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. Any share dividends described in this prospectus will take effect as share capitalizations as a matter of Cayman Islands law.
Unless otherwise stated, the information in this prospectus assumes that the underwriter will not exercise its over-allotment option.
General
We are a newly organized blank check company incorporated in November 18, 2020 as a Cayman Islands exempted company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We have generated no operating revenues to date and we do not expect that we will generate operating revenues until we consummate our initial business combination.
Our Founders
Our sponsor is forming HealthCor Catalio Acquisition Corp. in order to further capitalize on their joint knowledge of healthcare markets. They believe their decades of experience investing in private and public healthcare companies is a key differentiator as compared to other blank check companies.
HealthCor was founded in 2005 and manages approximately $2.7 billion in assets across long/short and long only healthcare funds. HealthCor centers its investment strategy on in-depth and fundamental research and has developed deep institutional knowledge of and extensive contacts across the healthcare industry. HealthCor’s Co-Founders, Joe Healey and Art Cohen, have been investing side-by-side for over 20 years, and they collectively have over 60 years of investment experience. Avi Horev and Chris Gaulin, Portfolio Managers at HealthCor, each have over 23 years of investment experience. The HealthCor investment research team includes specialists across biotechnology, pharmaceutical, healthcare services, and medical technology sub-sectors within healthcare. HealthCor’s Co-Founders, Portfolio Managers, and research team have built strong reputations in the healthcare industry over the past 15 years, with investment peers and companies alike. HealthCor’s tenure, reputation, and relationships will be an asset to HealthCor Catalio Acquisition Corp.
Catalio is a private equity firm that invests in breakthrough biomedical technology companies founded by the world’s leading scientist-entrepreneurs. Catalio provides invaluable private market investing experience and a vast network of companies, medical professionals, and academics to HealthCor Catalio Acquisition Corp. Catalio manages approximately $150 million in assets. Catalio was co-founded by George Petrocheilos and Dr. Jacob Vogelstein, who formerly co-founded a healthcare private equity strategy at Camden Partners, a multi-strategy private equity firm that spun out of T. Rowe Price. Catalio has recruited and invested with a group of 28 world-renowned doctors and scientists as venture partners to identify investment opportunities and provide professional advice. Catalio is able to leverage its network of venture partners and their respective labs, centers, and institutes for proprietary deal-flow. Catalio has invested in over 20 innovative, high-growth companies and recently closed its second venture fund, Catalio Nexus II, which was oversubscribed and closed at its hard cap of $100 million. Catalio and its elite group of healthcare experts will serve as a resource for HealthCor Catalio Acquisition Corp.
Our Board of Directors and Management
Chris Gaulin, our Chief Executive Officer and a member of the Company’s board of directors (the “Board”), is a Portfolio Manager at HealthCor. Mr. Gaulin joined HealthCor in 2018 from Soros Fund Management where he managed the firm’s healthcare equity investments. Prior to Soros, Mr. Gaulin spent 14 years at Maverick Capital, most recently as Healthcare Sector Head. As Healthcare Sector Head, Mr. Gaulin was responsible for managing the firm’s multi-billion healthcare equity portfolio and served as a member of Maverick’s Stock Committee and Advisory Committee. Prior to leading the healthcare team at Maverick, Mr. Gaulin ran the firm’s small cap portfolio for three years. Mr. Gaulin joined Maverick in 2003 as a Senior Analyst covering the consumer and business services sectors. Prior to Maverick, Mr. Gaulin was a Senior Analyst at JP Morgan. Mr. Gaulin graduated with a B.S. in Finance from Boston College in 1997.
Christine Clarke, our Chief Financial Officer, joined HealthCor in 2006 and has served as the Chief Financial Officer since 2007. Ms. Clarke’s responsibilities include accounting, operational, and human resources and she serves on the Executive, Valuation, Compliance, Expense, Best Execution, and Risk Committees. Prior to joining HealthCor, Ms. Clarke was the Controller at Narragansett Management, L.P. from 2004 to 2006. From 2000 until 2004, Ms. Clarke was an Assurance Senior Associate at PricewaterhouseCoopers, LLP where she
conducted audits of investment management clients. Ms. Clarke received a B.S. in Accounting from Fordham University in 2000 and is also a Certified Public Accountant.
George Petrocheilos, our President, is Co-Founder and Co-Managing Partner of Catalio. Prior to Catalio, Mr. Petrocheilos was a General Partner at Camden Partners from 2014 through 2020, where he created and co-managed the Nexus life sciences strategy with Dr. Jacob Vogelstein. Mr. Petrocheilos currently serves on the Boards of several private biotechnology companies, including MindX Corp., Spiral Therapeutics, WindMIL Therapeutics, Sisu Global, and LifeSprout Bio. Mr. Petrocheilos also serves on the Board of Trustees of Kennedy Kreiger Institute, a Johns Hopkins Medicine affiliate. Mr. Petrocheilos graduated from Johns Hopkins University in 2013 with a B.A. in Financial Economics.
Joseph Healey serves on our board of directors as chairman. Mr. Healey is a Co-Founder and Portfolio Manager of HealthCor. Prior to HealthCor, Mr. Healey was a Portfolio Manager at S.A.C. Capital Advisors, LLC (“SAC”) from January 2000 through March 2005. Prior to SAC, from 1997 to 2000, Mr. Healey was a health care Portfolio Manager at Kingdon Capital Management, and from 1992 until 1997 he was an Analyst and Portfolio Manager at Dreyfus Corporation. Mr. Healey also served as a First Lieutenant in the U.S. Army Medical Service Corp at the Walter Reed Army Medical Center from 1988 to 1992. Mr. Healey graduated from Boston University in 1988 with a B.A. in Biomedical Engineering and received his M.S. in Technology Management from the University of Maryland in 1993. Mr. Healey became a Chartered Financial Analyst (CFA) in 1996.
Taylor Harris has agreed to serve on our board of directors. Mr. Harris served as the Chief Financial Officer for MyoKardia, Inc., from April 2018 until that company's acquisition by Bristol Myers Squibb in November 2020. At MyoKardia, Mr. Harris led the finance, accounting, information technology, facilities, quality, corporate communications and investor relations functions. Previously, Mr. Harris served as Senior Vice President and Chief Financial Officer of Zeltiq Aesthetics, Inc., until that company’s acquisition by Allergan plc. During that time, he was responsible for global finance, accounting, tax, treasury, investor relations, and information technology functions, as well as the company’s commercial operations, including customer service, product support, and inside sales. Prior to Zeltiq, Mr. Harris served as Vice President and Chief Financial Officer at Thoratec Corporation (acquired by St. Jude Medical, Inc.). Prior to joining Thoratec, Mr. Harris worked at JPMorgan Chase & Co. for over a decade in several capacities, including as a Vice President in the firm’s Healthcare Investment Banking and Equity Research departments. Mr. Harris holds a Bachelor of Arts in Physics and Economics from the University of North Carolina at Chapel Hill, where he studied as a Morehead-Cain Scholar.
Avi Horev has agreed to serve on our board of directors. Mr. Horev is a Senior Partner and Portfolio Manager of HealthCor. Mr. Horev joined HealthCor at the time of its launch in 2005. From 2003 to 2005, Mr. Horev worked with Art Cohen and Mr. Healey’s team as a medical device research analyst at SAC. Prior to working at SAC, Mr. Horev was a health care equity research analyst at JP Morgan from 1997 to 2003. Mr. Horev graduated with a B.S. in Finance from Lehigh University in 1997.
Dr. Kenan Turnacioglu has agreed to serve on our board of directors. Dr. Turnacioglu is a General Partner at Catalio, where he also serves on the Investment Committee. Dr. Turnacioglu is also the Chairman of PaigeAI, a machine learning pathology company spun out of Memorial Sloan Kettering. In 2011, Dr. Turnacioglu co-founded PointState Capital, LP and managed the portfolios and investment teams in Healthcare and Consumer sectors, before departing in 2018. From 2001 to 2010, Dr. Turnacioglu worked at Duquesne Capital Management, LLC managing healthcare investments. While at these positions, Dr. Turnacioglu also served on the boards of StemCentrx from 2013 to 2016, Agensys from 2004 to 2007, and NYU Langone Cancer Center from 2010 to 2015. From 1998 to 2000, Dr. Turnacioglu worked at Credit Suisse as an analyst on the biotech team. Dr. Turnacioglu earned a B.A. from Rutgers University, and a Ph.D from the University of Pennsylvania, before becoming a Post-Doctoral Fellow at Johns Hopkins University.
Mike Weinstein has agreed to serve on our board of directors. Mr. Weinstein is Senior Vice President, Strategy and a member of the Executive Committee at Medtronic PLC, one of the world’s leading medical technology companies. In this role, Mr. Weinstein oversees global strategy for Medtronic, including providing counsel and input on business development, capital deployment, and the overall strategic direction of Medtronic’s businesses. Prior to joining Medtronic, Mr. Weinstein spent 25 years at J.P. Morgan & Co., where as a Managing Director he led the firm’s Healthcare group within Equity Research. Mr. Weinstein joined J.P. Morgan in
1992 and was the firm’s senior medical technology analyst from 1995 to 2018. Mr. Weinstein is a 14-time #1 ranked analyst in the annual surveys of both Institutional Investor and Greenwich Associates. In 2013, he was named to the Institutional Investor Hall of Fame. Mr. Weinstein received his bachelor’s degree in International Management from Georgetown University.
Dr. Christopher Wolfgang has agreed to serve on our board of directors. Christopher Wolfgang MD, PhD is the John L. Cameron Professor of Surgery and the Chief of Pancreatic Surgery at Johns Hopkins Medicine. Dr. Wolfgang holds additional appointments including a Professor of Pathology and Oncology at the Johns Hopkins School of Medicine. Dr. Wolfgang was elected into both the Miller-Coulson Academy of Clinical Excellence and the Distinguished Teaching Society of the Johns Hopkins School of Medicine. Dr. Wolfgang is recognized as one of the world’s leading experts and thought leaders in pancreatic cancer clinical care and basic research. Dr. Wolfgang is one of the most experienced pancreatic surgeons world-wide, personally having performed over 1200 Whipple operations. Dr. Wolfgang is considered one of the go-to surgeons for pancreatic cancer with vascular involvement and has led his group in pushing the envelope for vascular reconstruction as part of pancreatic cancer resection and in resecting pancreatic cancer metastatic to the liver. In addition to his clinical activity, Dr. Wolfgang runs a research program focused on the understanding of metastatic spread — the most important reason for treatment failure following tumor removal. Dr. Wolfgang has published over 400 peer-reviewed research articles and has a Google Scholar H-index of 97 with over 40,000 citations of his work. Dr. Wolfgang graduated from Temple University School of Medicine in 1998 with a combined MD and PhD degree (biochemistry). In January 2020, Dr. Wolfgang assumed the role of Chief of Pancreatic Surgery at NYU Langone in Manhattan, New York.
We believe our management team and board of directors is well positioned to take advantage of the growing set of investment opportunities focused on the healthcare industry and that our contacts and relationships will allow us to generate an attractive transaction for our shareholders.
Industry Opportunity
While we may acquire a business in any industry, our focus will be on the healthcare industry in the United States and other developed countries. We believe the healthcare industry, particularly the life sciences and medical technology sectors, represents an enormous and growing target market with a large number of potential target acquisition opportunities.
Healthcare spending in the U.S. currently exceeds $3.6 trillion. The Centers for Medicare and Medicaid Services estimate that total U.S. national health expenditures will exceed $6.2 trillion by 2028, more than doubling over a 20-year timeframe and reaching nearly 20% of U.S. GDP. At the same time, populations in developed countries are aging and gaining greater access to healthcare, increasing the demand within healthcare systems. Additionally, according to S&P Global Market Intelligence, in the United States alone there are over 30,000 private companies focused on various subsectors within healthcare. We intend to focus our investment effort broadly across the healthcare industry, which encompasses biotechnology, pharmaceuticals, services, and medical technology sub-sectors. We believe that our investing and operating expertise, network of venture partners, and strong relationships throughout the healthcare industry will give us a large, addressable universe of potential targets. This, along with the positive tailwinds in the healthcare industry maximizes the likelihood that our management team will be able to identify and execute an attractive transaction.
The Current Medical Technology and Life Sciences Initial Public Offering (“IPO”) Market
We believe that the current state of the medical technology and life sciences IPO markets may enhance our ability to locate an attractive target. Over 200 life sciences and medical technology companies have gone public since 2016 in the United States.
We believe that privately held medical technology and life sciences companies represent an enormous investment opportunity, and recent trends in equity capital markets continue to demonstrate the desire of these companies to access public capital. Since 2015, approximately $298 billion has been raised in the public equity markets by medical technology and life sciences companies. Approximately $48 billion has been raised through IPOs of 320 life sciences companies and approximately $6 billion has been raised through IPOs of 42 medical technology companies. We believe an acquisition by a special purpose acquisition company with a management team that is well-known and respected in the industry can provide a more transparent and efficient mechanism to bring a private healthcare company to the public markets. We also believe the
combination of a strong IPO market and the benefits from being publicly traded, including greater access to capital, more liquid securities, and increased customer awareness will help us bring an attractive company to the public markets.
Acquisition Strategy
We intend to capitalize on the platforms of our two founders, HealthCor and Catalio. Both founders have experience in investing across a variety of healthcare sub-sectors and a track record of identifying high-quality assets, businesses and management teams. We believe HealthCor’s bottom-up fundamental research together with Catalio’s access to a group of world-renowned, serial scientist-entrepreneurs improve our ability to identify and acquire potential targets. Our selection process will leverage our relationships with leading venture capitalists and growth equity funds, executives of private and public companies, leading investment banking firms, and world-renowned scientists and medical professionals, which we believe should provide us with a key competitive advantage in sourcing potential business combination targets. Given our profile and dedicated industry approach, we anticipate that target business candidates may be brought to our attention from various unaffiliated sources, and in particular investors in other private and public companies in our networks. We also believe that our experience, reputation, access to experienced serial scientist-entrepreneurs, and track record in healthcare investing will make us a preferred partner for potential targets. Consistent with our strategy, we intend to see to acquire companies that we believe:
▪
Are harnessing transformative technology and have strong intellectual property;
▪
Have competitive advantage in the markets in which they operate, and which can benefit from access to additional capital as well as our industry relationships and expertise;
▪
Are at an inflection point in their growth trajectory;
▪
Are ready to be public and have experienced management teams with strong corporate governance, reporting, and policies;
▪
Have significant embedded and/or underexploited growth opportunities;
▪
Will offer an attractive risk-adjusted return for our shareholders; and
▪
Will likely be well received by public investors and are expected to have good access to the public capital markets.
These criteria are not intended to be exhaustive and we may use other criteria as well. Any evaluation relating to the merits of a particular initial business combination may be based on these general criteria as well as other considerations, factors and criteria that our management may deem relevant.
Initial Business Combination
Our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account) at the time of signing the agreement to enter into the initial business combination. We refer to this as the 80% of fair market value test. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). Even though our board of directors will rely on generally accepted standards, our board of directors will have discretion to select the standards employed. In addition, the application of the standards generally involves a substantial degree of judgment. Accordingly, investors will be relying on the business judgment of the board of directors in evaluating the fair market value of the target or targets. The proxy solicitation materials or tender offer documents used by us in connection with any proposed transaction will provide public shareholders with our analysis of our satisfaction of the 80% of fair market value test, as well as the basis for our determinations. If our board of directors is not able to independently determine the fair market value of the target business or businesses or we are considering an initial business combination with an affiliated entity, we will obtain an opinion from an independent investment banking firm which is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), or an independent valuation or accounting firm with respect to the satisfaction of such criteria. Our shareholders may not be provided with a copy of such opinion nor will they be able to rely on such opinion. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the
target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of fair market value test, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required under applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed transaction will include such opinion.
We anticipate structuring our initial business combination so that the post-business combination company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-business combination company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to the completion of our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-business combination company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of fair market value test. If the business combination involves more than one target business, the 80% of fair market value test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking shareholder approval, as applicable. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
In addition, our sponsor has indicated an interest to purchase up to an aggregate of $25,000,000 of our Class A ordinary shares in a private placement that would occur concurrently with the consummation of our initial business combination. However, because indications of interest are not binding agreements or commitments to purchase, our sponsor may determine not to purchase any such shares, or to purchase fewer shares than it has indicated an interest in purchasing. Furthermore, we are not under any obligation to sell any such shares. If we sell shares to our sponsor (or any other investor) in connection with our initial business combination, the equity interest of investors in this offering in the combined company may be diluted and the market prices for our securities may be adversely affected. In addition, if the per share trading price of our ordinary shares is greater than the price per share paid in the private placement, the private placement will result in value dilution to you, in addition to the immediate dilution that you will experience in connection with the consummation of this offering. See “Dilution.”
Other Considerations
We are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor or any of our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm that such initial business combination or transaction is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Affiliates of our sponsor and our officers and members of our board of directors may directly or indirectly own founder shares following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers or directors were to be included by a target business as a condition to any agreement with respect to our initial business combination.
We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. Affiliates of our sponsor are continuously made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a business combination transaction with our company. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to identify or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition candidate.
HealthCor and Catalio may manage multiple investment vehicles and raise additional funds and/or successor funds in the future, which may be during the period in which we are seeking our initial business combination. These investment entities may be seeking acquisition opportunities and related financing at any time. We may compete with any one or more of them on any given acquisition opportunity.
Our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our ability to identify and pursue business combination opportunities or to complete our initial business combination.
In addition, certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary and contractual duties to other entities, including, without limitation, to investment funds, accounts, co-investment vehicles and other entities managed by affiliates of our sponsor and certain entities in which such affiliates have invested. As a result, if any of our officers or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations (including, without limitation, funds or other investment vehicles managed by affiliates of our sponsor), then, subject to their fiduciary duties under Cayman Islands law, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. In addition, investment ideas generated within or presented to HealthCor, Catalio or members of our management team may be suitable for both us and a current or future fund, portfolio company or other investment entity of HealthCor or Catalio and, subject to applicable fiduciary duties, will first be directed to such fund, portfolio company or other entity before being directed, if at all, to us. However, we do not expect these duties to materially affect our ability to identify and pursue business combination opportunities or to complete our initial business combination.
In addition, our officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. Moreover, our officers and directors have, and may have in the future, time and attention requirements for current and future investment funds, accounts, co-investment vehicles and other entities managed by HealthCor or Catalio. To the extent any conflict of interest arises between, on the one hand, us and, on the other hand, such investment funds, accounts, co-investment vehicles and other entities, HealthCor, Catalio and their affiliates, as applicable, will resolve such conflicts in their sole discretion in accordance with their existing fiduciary, contractual and other duties, and there can be no assurance that such conflict of interest will be resolved in our favor.
Corporate Information
Our executive offices are located at 55 Hudson Yards, 28th Floor, New York, New York 10001.
We are a Cayman Islands exempted company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we have applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (2018 Revision) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates equals or exceeds $700,000,000 as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates equals or exceeds $250,000,000 as of the prior June 30, and (2) our annual revenues equaled or exceeded $100,000,000 during such completed fiscal year or the market value of our ordinary shares held by non-affiliates equals or exceeds $700,000,000 as of the prior June 30.
The Offering
In deciding whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled “Risk Factors” of this prospectus.
15,000,000 Class A ordinary shares (or 17,250,000 Class A ordinary shares if the underwriter’s over-allotment option is exercised in full), at $10.00 per share
“HCAQ”
Ordinary shares:
Number outstanding before this offering
4,312,500(1)(2)
Number outstanding after this offering
19,250,000(1)(3)(4)
(1)
Founder shares are currently classified as Class B ordinary shares, which shares will automatically convert into Class A ordinary shares at the time of our initial business combination as described below adjacent to the caption “Founder shares conversion and anti-dilution rights” and in our amended and restated memorandum and articles of association.
(2)
Includes up to 562,500 founder shares that are subject to forfeiture depending on the extent to which the underwriter’s over-allotment optionis exercised.
(3)
Includes 15,000,000 public shares, 500,000 private placement shares and 3,750,000 founder shares, assuming the underwriter’s over-allotment option is not exercised and 562,500 founder shares have been forfeited.
(4)
Unlike other SPAC IPOs, investors in this offering will not receive warrants that would become exercisable following completion of our initial business combination
On November 24, 2020, we issued to our sponsor 4,312,500 founder shares in exchange for a capital contribution of $25,000, or approximately $0.006 per share. In December 2020, our sponsor transferred 35,000 Class B ordinary shares to each of Dr. Wolfgang and Mr. Weinstein for their service as independent directors. In January 2021, our sponsor transferred 35,000 Class B ordinary shares to Mr. Harris for his service as an independent director. These 105,000 founder shares are not subject to forfeiture in the event the underwriter's over-allotment option is not exercised.
Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The per share price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the ownership of our initial shareholders (and their permitted transferees), on an as-converted basis, at 20% of our issued and outstanding ordinary shares (excluding the private placement shares) upon the consummation of this offering. Up to 562,500 founder shares held by our sponsor are subject to forfeiture depending on the extent to which the underwriter’s over-allotment option is exercised.
The founder shares are identical to the Class A ordinary shares being sold in this offering, except that:
•
only holders of the founder shares have the right to vote on the appointment of directors prior to the completion of our initial business combination and holders of a majority of our founder shares may remove a member of the board of directors for any reason;
•
the founder shares are subject to certain transfer restrictions, as described in more detail below;
•
our sponsor and our management team have entered into an agreement with us, pursuant to which they have agreed to (i) waive their redemption rights with respect to any founder shares, private placement shares and public shares they hold, (ii) waive their redemption rights with respect to any founder shares, private placement shares and any public shares purchased during or after this offering in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity and (iii) waive their rights to liquidating distributions from the trust account with respect to any founder shares
they hold if we fail to consummate an initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering). If we seek shareholder approval, we will complete our initial business combination only if a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a general meeting are voted in favor of the business combination. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares and the private placement shares, we would need 5,375,001, or 35.8% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), or 562,501 or 3.75% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 15,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved;
•
the founder shares will automatically convert into our Class A ordinary shares at the time of our initial business combination as described below adjacent to the caption “Founder shares conversion and anti-dilution rights” and in our amended and restated memorandum and articles of association; and
•
the founder shares are entitled to registration rights.
Transfer restrictions on founder shares
Except as described herein, our sponsor and our management team have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and other agreements of our sponsor and management team with respect to any founder shares.
Founder shares conversion and anti-dilution rights
The founder shares are designated as Class B ordinary shares and will automatically convert into Class A ordinary shares on the first business day following the consummation of our initial business combination at a ratio such that the number of Class A
ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding (excluding the private placement shares) upon the consummation of this offering, plus (ii) the sum of the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities (as defined herein) or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any private placement shares issued to our sponsor, members of our management team or any of their affiliates upon conversion of working capital loans. Any conversion of Class B ordinary shares described herein will take effect as a compulsory redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
Appointment of directors;
Voting rights
Prior to the completion of our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the appointment of directors during such time.
In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. These provisions of our amended and restated memorandum and articles of association may only be amended by a special resolution passed by holders representing at least two-thirds of our outstanding Class B ordinary shares. Our amended and restated memorandum and articles of association will provide that our board of directors will be divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual general meeting) serving a three-year term.
With respect to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law or the applicable rules of Nasdaq then in effect, holders of our founder shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote.
Our sponsor has committed, pursuant to a written agreement, to purchase 500,000 private placement shares (or 545,000 private placement shares if the underwriter’s over-allotment option is exercised in full), at a price of $10.00 per share ($5,000,000 in the aggregate or $5,450,000 if the underwriter’s over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. If we do not
consummate an initial business combination within 24 months from the closing of this offering, the proceeds from the sale of the private placement shares held in the trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and the private placement shares will be worthless.
Transfer restrictions on private placement shares
The private placement shares will not be transferable, assignable or salable until 30 days after the completion of our initial business combination, except as described herein under “Principal Shareholders — Transfers of Founder Shares and Private Placement Shares.”
Proceeds to be held in trust account
The Nasdaq rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement shares be deposited in a trust account. Of the proceeds we will receive from this offering and the sale of the private placement shares described in this prospectus, $150,000,000, or $172,500,000 if the underwriter’s over-allotment option is exercised in full ($10.00 per share in either case), will be deposited into a segregated trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee and approximately $1,000,000 will be used to pay expenses in connection with the closing of this offering and approximately $1,000,000 will be used for working capital following this offering. The proceeds to be placed in the trust account include $5,250,000 (or $6,037,500 if the underwriter’s over-allotment option is exercised in full) in deferred underwriting commissions.
Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our income taxes, if any, our amended and restated memorandum and articles of association, as discussed below and subject to the requirements of law and regulation, will provide that the proceeds from this offering and the sale of the private placement shares held in the trust account will not be released from the trust account (1) to us, until the completion of our initial business combination, or (2) to our public shareholders, until the earliest of (a) the completion of our initial business combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (b) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity, and (c) the redemption of our public shares if we have not consummated our business combination within 24 months from the closing of this offering, subject to applicable
law. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (b) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination within 24 months from the closing of this offering, with respect to such Class A ordinary shares so redeemed. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders.
Anticipated expenses and funding
sources
Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except the withdrawal of interest income (if any) to pay our income taxes, if any. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Assuming an interest rate of 0.1% per year, we estimate the interest earned on the trust account will be approximately $150,000 per year; however, we can provide no assurances regarding this amount. Unless and until we complete our initial business combination, we may pay our expenses only from:
•
the net proceeds of this offering and the sale of the private placement shares not held in the trust account, which will be approximately $1,000,000 in working capital after the payment of approximately $1,000,000 in expenses relating to this offering; and
•
any loans or additional investments from our sponsor or an affiliate of our sponsor or certain of our officers and directors, although they are under no obligation to advance funds or invest in us, and provided any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination.
Conditions to completing our initial business combination
Nasdaq rules require that our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account) at the time of signing the agreement to enter into the initial business combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses or we are considering an initial business combination with an affiliated entity, we will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm with respect to the satisfaction of such criteria. Our shareholders
may not be provided with a copy of such opinion nor will they be able to rely on such opinion.
We will complete our initial business combination only if the post-business combination company in which our public shareholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act. Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the completion of our initial business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination transaction. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-business combination company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of fair market value test, provided that in the event that the business combination involves more than one target business, the 80% of fair market value test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking shareholder approval, as applicable.
Permitted purchases and other transactions with respect to our securities
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Additionally, at any time at or prior to the completion of our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, executive officers, advisors or their affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds held in the trust account will be used to purchase public shares in such transactions. If our sponsor, directors, executive officers, advisors or their affiliates engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Securities Exchange Act of 1934, as amended, or the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine
at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. See “Proposed Business — Permitted Purchases and Other Transactions with Respect to Our Securities” for a description of how our sponsor, directors, executive officers, advisors or their affiliates will select which shareholders to purchase securities from in any private transaction.
The purpose of any such transaction could be to (1) vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, or (2) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our Class A ordinary shares may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Redemption rights for public shareholders upon completion of our initial business combination
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of then-outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriter. The redemption rights may include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our private placement shares. Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, the private placement shares and any public shares purchased during or after this offering in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with
our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity.
Limitations on redemptions
Our amended and restated memorandum and articles of association will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). However, a greater net tangible asset or cash requirement may be contained in the agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. Furthermore, although we will not redeem shares in an amount that would cause our net tangible assets to fall below $5,000,001, we do not have a maximum redemption threshold based on the percentage of shares sold in this offering, as many blank check companies do. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
Manner of conducting redemptions
We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and share purchases would not typically require shareholder approval, while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would typically require shareholder approval. We currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange rule or we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons.
If we hold a shareholder vote to approve our initial business combination, we will:
•
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
•
file proxy materials with the SEC.
If we seek shareholder approval, we will complete our initial business combination only if a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a general meeting are voted in favor of the business combination. In such case, our sponsor and our management team have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares and the private placement shares, we would need 5,375,001, or 35.8% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), or 562,501 or 3.75% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 15,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all. Our amended and restated memorandum and articles of association will require that at least five days’ notice will be given of any such general meeting.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
•
conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
•
file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our Class A ordinary shares in the open market, in order to comply with Rule 14e-5 under the Exchange Act. In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public
shareholders not tendering more than the number of public shares we are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
Limitation on redemption rights of shareholders holding more than 15% of the shares sold in this offering if we hold a shareholder vote
Notwithstanding the foregoing redemption rights, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, without our prior consent. We believe the restriction described above will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us, our sponsor or our management team at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our shareholders’ ability to vote all of their shares (including all shares held by those shareholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination.
Release of funds in trust account on closing of our initial business combination
On the completion of our initial business combination, the funds held in the trust account will be disbursed directly by the trustee to pay amounts due to any public shareholders who properly exercise their redemption rights as described above adjacent to the caption “Redemption rights for public shareholders upon completion of our initial business combination,” to pay the underwriter its deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt or not
all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-business combination businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
Redemption of public shares and distribution and liquidation if no initial business combination
Our amended and restated memorandum and articles of association will provide that we will have only 24 months from the closing of this offering to consummate our initial business combination. If we do not consummate an initial business combination within 24 months from the closing of this offering, we 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 the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering).
The underwriter has agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not consummate an initial business combination within 24 months from the closing of this offering and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.
Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that would modify
the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity; unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described above adjacent to the caption “Limitations on redemptions.” For example, our board of directors may propose such an amendment if it determines that additional time is necessary to complete our initial business combination. In such event, we will conduct a proxy solicitation and distribute proxy materials pursuant to Regulation 14A of the Exchange Act seeking shareholder approval of such proposal and, in connection therewith, provide our public shareholders with the redemption rights described above upon shareholder approval of such amendment. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, any executive officer, director or director nominee, or any other person.
Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Limited payments to insiders
There will be no finder’s fees, reimbursements or cash payments made by the company to our sponsor, officers or directors, or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of this offering and the sale of the private placement shares held in the trust account prior to the completion of our initial business combination:
•
repayment of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
•
reimbursement for office space, secretarial and administrative services provided to us by our sponsor, in the amount of up to $10,000 per month;
•
reimbursement for any out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial business combination; and
•
repayment of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such loans may be convertible into shares of the post-business combination company at a price of $10.00 per share at the option of the lender. The shares would be identical to the private placement shares.
Except for the foregoing, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans.
Any such payments will be made either (i) prior to the completion of our initial business combination using proceeds of this offering and the sale of the private placement shares held outside the trust account or from loans made to us by our sponsor or an affiliate of our sponsor or certain of our officers and directors or (ii) in connection with or after the consummation of our initial business combination.
We will establish and maintain an audit committee, which will comply with Nasdaq’s independence requirements. Among its responsibilities, the audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors, or their affiliates and monitor compliance with the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to promptly take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section entitled “Management — Committees of the Board of Directors — Audit Committee.”
SUMMARY OF RISK FACTORS
An investment in our securities involves a high degree of risk. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition and operating results. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Such risks include, but are not limited to:
▪
We are a recently incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
▪
Past performance by our management team or their affiliates, including HealthCor and Catalio, may not be indicative of future performance of an investment in us or in the future performance of the business we may acquire.
▪
Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination.
▪
Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
▪
If we seek shareholder approval of our initial business combination, our initial shareholders have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote.
▪
The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
▪
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
▪
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
▪
The requirement that we consummate an initial business combination within 24 months (or such later date as approved by our shareholders) after the closing of this offering may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.
▪
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak and the status of debt and equity markets.
▪
We may not be able to consummate an initial business combination within 24 months after the closing of this offering, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
▪
If we seek shareholder approval of our initial business combination, our initial shareholders, directors, executive officers, advisors and their affiliates may elect to purchase public shares, which may influence a vote on a proposed business combination and reduce the public “float” of our shares of Class A ordinary shares.
▪
If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
▪
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares, potentially at a loss.
▪
Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
▪
You will not be entitled to protections normally afforded to investors of many other blank check companies.
▪
If we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
▪
Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our private placement shares will be worthless.
▪
If the net proceeds of this offering and the sale of the private placement shares not being held in the trust account are insufficient to allow us to operate for the 24 months following the closing of this offering, it could limit the amount available to fund our search for a target business or businesses and our ability to complete our initial business combination, and we will depend on loans from our sponsor, its affiliates or members of our management team to fund our search and to complete our initial business combination.
Summary Financial Data
The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, so only balance sheet data is presented.
| |
|
|
November 24, 2020
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
Working capital (deficiency)
|
|
|
|
$ |
(30,000) |
|
|
|
Total assets
|
|
|
|
$ |
50,000 |
|
|
|
Total liabilities
|
|
|
|
$ |
30,000 |
|
|
|
Shareholder’s equity
|
|
|
|
$ |
20,000 |
|
|
RISK FACTORS
An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this prospectus, before making a decision to invest in our Class A ordinary shares. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
We are a recently incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a recently incorporated exempted company under the laws of the Cayman Islands with no operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
As of November 24, 2020, we had no cash and a working capital deficiency of $30,000. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. Management’s plans to address this need for capital through this offering are discussed in the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We cannot assure you that our plans to raise capital or to consummate an initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial statements contained elsewhere in this prospectus do not include any adjustments that might result from our inability to consummate this offering or our inability to continue as a going concern.
Past performance by our management team or their respective affiliates, including HealthCor and Catalio, may not be indicative of future performance of an investment in us or in the future performance of the business we may acquire.
Information regarding performance by, or businesses associated with, our management team or their respective affiliates, including HealthCor and Catalio, is presented for informational purposes only. Any past experience of and performance by our management team or their respective affiliates, including HealthCor and Catalio, is not a guarantee either: (1) that we will be able to successfully identify a suitable candidate for our initial business combination; or (2) of any results with respect to any initial business combination we may consummate. You should not rely on the historical record of our management team, HealthCor, Catalio or any of their respective affiliates’ or managed fund’s performance as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. Our management team has no experience in operating special purpose acquisition companies. An investment in us is not an investment in HealthCor or Catalio.
Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination.
We may not hold a shareholder vote to approve our initial business combination unless the business combination would require shareholder approval under applicable Cayman Islands law or stock exchange listing requirements or if we decide to hold a shareholder vote for business or other reasons. For instance, the Nasdaq rules currently allow us to engage in a tender offer in lieu of a general meeting but would still require us to obtain shareholder approval if we were seeking to issue more than 20% of our issued and outstanding shares to a target business as consideration in any business combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of our issued and outstanding ordinary shares, we would seek shareholder approval of such business combination. However, except as required by applicable law or stock exchange rule, the decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may
consummate our initial business combination even if holders of a majority of the outstanding ordinary shares do not approve of the business combination we consummate. Please see the section entitled “Proposed Business — Shareholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.
Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Since our board of directors may complete a business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the business combination, unless we seek such shareholder approval. Accordingly, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our initial business combination.
If we seek shareholder approval of our initial business combination, our sponsor and members of our management team have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote.
Our sponsor will own, on an as-converted basis, 20% of our outstanding ordinary shares (excluding the private placement shares) immediately following the completion of this offering. Our sponsor and members of our management team also may from time to time purchase Class A ordinary shares prior to the completion of our initial business combination. Our amended and restated memorandum and articles of association will provide that, if we seek shareholder approval, we will complete our initial business combination only if a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a general meeting are voted in favor of the business combination. As a result, in addition to our initial shareholders’ founder shares and the private placement shares, we would need 5,375,001, or 35.8% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), or 562,501 or 3.75% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 15,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved. Accordingly, if we seek shareholder approval of our initial business combination, the agreement by our sponsor and our management team to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite shareholder approval for such initial business combination.
The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and payment of deferred underwriting commissions (so that we do not then become subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and payment of deferred underwriting commissions or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
At the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase
price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third-party financing. In addition, if a large number of shares are submitted for redemption, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for additional third-party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provisions of the Class B ordinary shares result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares at the time of our business combination. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure. The amount of the deferred underwriting commissions payable to the underwriter will not be adjusted for any shares that are redeemed in connection with an initial business combination. The per-share amount we will distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions.
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the funds in the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open market.
The requirement that we consummate an initial business combination within 24 months after the closing of this offering may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.
Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must consummate an initial business combination within 24 months from the closing of this offering. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination within the required time period with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak and the status of debt and equity markets.
In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”. The COVID-19 outbreak has resulted, and a significant outbreak of other infectious diseases could result, in a widespread health crisis that adversely affects the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our
search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected. In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.
We may not be able to consummate an initial business combination within 24 months after the closing of this offering, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
We may not be able to find a suitable target business and consummate an initial business combination within 24 months after the closing of this offering. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. For example, the outbreak of COVID-19 continues to grow both in the U.S. and globally and, while the extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. Additionally, the COVID-19 outbreak may negatively impact businesses we may seek to acquire. If we have not consummated an initial business combination within such applicable time period, we 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 the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law. In either such case, our public shareholders may receive only $10.00 per public share, or less than $10.00 per public share, on the redemption of their shares. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public share” and other risk factors herein.
If we seek shareholder approval of our initial business combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase public shares, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary shares.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase public shares in such transactions.
In the event that our sponsor, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of any such transaction could be to (1) vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination or (2) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at
the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our Class A ordinary shares may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. See “Proposed Business — Permitted Purchases and Other Transactions with Respect to Our Securities” for a description of how our sponsor, directors, executive officers, advisors or their affiliates will select which shareholders to purchase securities from in any private transaction.
If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a shareholder fails to receive our proxy solicitation or tender offer materials, as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly redeem or tender public shares. In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed. See “Proposed Business — Effecting Our Initial Business Combination — Tendering Share Certificates in Connection with a Tender Offer or Redemption Rights.”
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares, potentially at a loss.
Our public shareholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) our completion of an initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity, and (iii) the redemption of our public shares if we have not consummated an initial business within 24 months from the closing of this offering, subject to applicable law and as further described herein. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination within 24 months from the closing of this offering, with respect to such Class A ordinary shares so redeemed. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. Accordingly, to liquidate your investment, you may be forced to sell your public shares, potentially at a loss.
Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We have applied to have our shares listed on Nasdaq on the date of this prospectus. Although after giving effect to this offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in Nasdaq’s listing standards, our securities may not be, or may not continue to be, listed on Nasdaq in the future or prior to the completion of our initial business combination. In order to continue listing our securities on Nasdaq prior to the completion of our initial business combination, we must maintain certain financial, distribution and share price levels. Generally, we must maintain a minimum amount in shareholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, the share
price of our securities would generally be required to be at least $4.00 per share and our shareholders’ equity would generally be required to be at least $5,000,000 and we would be required to have a minimum of 300 round-lot holders (with at least 50% of such round lot holders holding securities with a market value of at least $2,500). We may not be able to meet those initial listing requirements at that time.
If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
▪
a limited availability of market quotations for our securities;
▪
reduced liquidity for our securities;
▪
a determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
▪
a limited amount of news and analyst coverage; and
▪
a decreased ability to issue additional securities or obtain additional financing in the future.
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our Class A ordinary shares will be listed on Nasdaq, our Class A ordinary shares will qualify as covered securities under the statute. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our shares would not qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our shares.
You will not be entitled to protections normally afforded to investors of many other blank check companies.
Since the net proceeds of this offering and the sale of the private placement shares are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed to be a “blank check” company under the United States securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the completion of this offering and the sale of the private placement shares and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our shares will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”
If we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in this offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be restricting our shareholders’ ability to vote all of their shares
(including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.
Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we do not complete our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account.
We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement shares our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public share” and other risk factors herein.
If the net proceeds of this offering and the sale of the private placement shares not being held in the trust account are insufficient to allow us to operate for the 24 months following the closing of this offering, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial business combination.
Of the net proceeds of this offering and the sale of the private placement shares, only $1,000,000 will be available to us initially outside the trust account to fund our working capital requirements. We believe that, upon the closing of this offering, the funds available to us outside of the trust account, together with funds available from loans from our sponsor, members of our management team or any of their affiliates will be sufficient to allow us to operate for at least the 24 months following the closing of this offering; however, our estimate may not be accurate, and our sponsor, members of our management team or any of their affiliates are under no obligation to advance funds to us in such circumstances. Of the funds available to us, we expect to use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess with funds not to be held in the trust account. In such case, unless funded by the proceeds of loans available from our sponsor, members of our management team or any of their affiliates, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the
offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. The amount held in the trust account will not be impacted as a result of such increase or decrease. If we are required to seek additional capital, we would need to borrow funds from our sponsor, members of our management team or any of their affiliates or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances may be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into shares of the post-business combination entity at a price of $10.00 per share at the option of the lender. The shares would be identical to the private placement shares. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor, members of our management team or any of their affiliates as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we do not complete our initial business combination within the required time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public shareholders may only receive an estimated $10.00 per public share, or possibly less, on our redemption of our public shares. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public share” and other risk factors herein.
Subsequent to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the share price of our securities, which could cause you to lose some or all of your investment.
Even if we conduct due diligence on a target business with which we combine, this diligence may not surface all material issues with a particular target business. In addition, factors outside of the target business and outside of our control may later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public share.
Our placing of funds in the trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors, service providers (excluding our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee
that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not consummated an initial business combination within 24 months from the closing of this offering, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors. Pursuant to the letter agreement the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (excluding our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriter of this 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, our sponsor will not be responsible to the extent of any liability for such third party claims. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Our sponsor may not be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public shareholders.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public shareholders may be reduced below $10.00 per public share.
We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.
We have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
In recent months, the market for directors and officers liability insurance for special purpose acquisition companies has changed. Fewer insurance companies are offering quotes for directors and officers liability
coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable. There can be no assurance that these trends will not continue.
The increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate an initial business combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business combination entity might need to incur greater expense, accept less favorable terms or both. However, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s ability to attract and retain qualified officers and directors.
In addition, even after we were to complete an initial business combination, our directors and officers could still be subject to potential liability from claims arising from conduct alleged to have occurred prior to the initial business combination. As a result, in order to protect our directors and officers, the post-business combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for run-off insurance would be an added expense for the post-business combination entity, and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to our investors.
The securities in which we invest the proceeds held in the trust account could bear a negative rate of interest, which could reduce the interest income available for payment of taxes or reduce the value of the assets held in trust such that the per share redemption amount received by shareholders may be less than $10.00 per share.
The net proceeds of this offering and certain proceeds from the sale of the private placement shares, in the amount of $150,000,000 may only be invested in direct U.S. Treasury obligations having a maturity of 185 days or less, or in certain money market funds which invest only in direct U.S. Treasury obligations. While short-term U.S. Treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event of very low or negative yields, the amount of interest income (which we may withdraw to pay income taxes, if any) would be reduced. In the event that we are unable to complete our initial business combination, our public shareholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income. If the balance of the trust account is reduced below $150,000,000 as a result of negative interest rates, the amount of funds in the trust account available for distribution to our public shareholders may be reduced below $10.00 per share.
If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or winding-up law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the trust
account, the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
▪
restrictions on the nature of our investments; and
▪
restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination.
In addition, we may have imposed upon us burdensome requirements, including:
▪
registration as an investment company with the SEC;
▪
adoption of a specific form of corporate structure; and
▪
reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to.
In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-business combination business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity, and (iii) the redemption of our public shares if we have not consummated an initial business within 24 months from the closing of this offering, subject to applicable law and as further described herein. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we do not complete our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations.
If we do not consummate an initial business combination within 24 months from the closing of this offering, our public shareholders may be forced to wait beyond such 24 months before redemption from our trust account.
If we do not consummate an initial business combination within 24 months from the closing of this offering, the proceeds then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. Any redemption of public shareholders from the trust account will be effected automatically by function of our amended and restated memorandum and articles of association prior to any voluntary winding up. If we are required to wind up, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Act. In that case, investors may be forced to wait beyond 24 months from the closing of this offering before the redemption proceeds of our trust account become available to them, and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions of our amended and restated memorandum and articles of association, and only then in cases where investors have sought to redeem their Class A ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we do not complete our initial business combination and do not amend certain provisions of our amended and restated memorandum and articles of association. Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. Claims may be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable for a fine of $18,292.68 and imprisonment for five years in the Cayman Islands.
We may not hold an annual general meeting until after the consummation of our initial business combination.
In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on Nasdaq. As an exempted company, there is no requirement under the Companies Act for us to hold annual or general meetings to elect directors. Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to elect directors and to discuss company affairs with management. Our board of directors is divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual general meeting) serving a three-year term.
Holders of Class A ordinary shares will not be entitled to vote on any appointment of directors we hold prior to the completion of our initial business combination.
Prior to the completion of our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. Accordingly, you may not have any say in the management of our company prior to the consummation of an initial business combination.
The grant of registration rights to our initial shareholders may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A ordinary shares.
Pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, our initial shareholders, and their permitted transferees can demand that we register the Class A ordinary shares into which founder shares are convertible and the private placement shares, including the private placement shares that may be issued upon conversion of working capital loans. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A ordinary shares. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our securities that is expected when the securities owned by our initial shareholders or their permitted transferees are registered for resale.
Because we are neither limited to evaluating a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
We may pursue business combination opportunities in any sector, except that we will not, under our amended and restated memorandum and articles of association, be permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations. Because we have not yet selected or approached any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. An investment in our Class A ordinary shares may not ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any holders who choose to retain their securities following our initial business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
Because we intend to seek a business combination with a target business in the healthcare industry, we expect our future operations to be subject to risks associated with this industry.
Because we intend to seek a business combination with a target business in the healthcare industry, we expect our future operations to be subject to risks associated with this industry.
Healthcare related companies are generally subject to greater governmental regulation than most other industries at the U.S. state and federal levels, and internationally. In recent years, both local and national governmental budgets have come under pressure to reduce spending and control healthcare costs, which could both adversely affect regulatory processes and public funding available for healthcare products, services and facilities. In March 2010, comprehensive healthcare reform legislation was enacted in the United States. These laws are intended to increase health insurance coverage through individual and employer mandates, subsidies offered to lower income individuals, tax credits available to smaller employers and broadening of Medicaid eligibility.
While one intent of healthcare reform is to expand health insurance coverage to more individuals, it may also involve additional regulatory mandates and other measures designed to constrain medical costs, including coverage and reimbursement for healthcare services. Healthcare reform has had a significant impact on the healthcare sector in the United States and consequently has the ability to affect companies within the healthcare industry. The ultimate effects of federal healthcare reform or any future legislation or regulation, or healthcare initiatives, if any, on the healthcare sector, whether implemented at the federal or state level or internationally, cannot be predicted with certainty and such reform, legislation, regulation or initiatives may adversely affect the performance of a potential business combination.
Changes in governmental policies may have a material effect on the demand for or costs of certain products and services. A healthcare related company must receive government approval before introducing new drugs and medical devices or procedures. This process may delay the introduction of these products and services to the marketplace, resulting in increased development costs, delayed cost recovery and loss of competitive advantage to the extent that rival companies have developed competing products or procedures, adversely affecting the company’s revenues and profitability. Failure to obtain governmental approval of a key drug or device or other regulatory action could have a material adverse effect on the business of a target company. Additionally, expansion of facilities by healthcare related providers is subject to “determinations of need” by the appropriate government authorities. This process not only increases the time and cost involved in these expansions, but also makes expansion plans uncertain, limiting the revenue and profitability growth potential of healthcare related facilities operators.
Certain healthcare related companies depend on the exclusive rights or patents for the products they develop and distribute. Patents have a limited duration and, upon expiration, other companies may market substantially similar “generic” products that are typically sold at a lower price than the patented product, causing the original developer of the product to lose market share and/or reduce the price charged for the product, resulting in lower profits for the original developer. As a result, the expiration of patents may adversely affect the profitability of these companies. The profitability of healthcare related companies may also be affected, among other factors, by restrictions on government reimbursement for medical expenses, rising or falling costs of medical products and services, pricing pressure, an increased emphasis on outpatient services, a limited product offering, industry innovation, changes in technologies and other market developments. Finally, because the products and services of healthcare related companies affect the health and well-being of many individuals, these companies are especially susceptible to product liability lawsuits.
The healthcare industry spends heavily on research and development. Research findings (e.g., regarding side effects or comparative benefits of one or more particular treatments, services or products) and technological innovation (together with patent expirations) may make any particular treatment, service or product less attractive if previously unknown or underappreciated risks are revealed, or if a more effective, less costly or less risky solution is or becomes available. Any such development could have a material adverse effect on the companies that are target businesses for investment.
We may seek acquisition opportunities in industries or sectors which may or may not be outside of our management’s area of expertise.
We will consider a business combination outside of our management’s area of expertise if a business combination target is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. Although our management will endeavor to evaluate the risks inherent in any particular business combination target, we may not adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our Class A ordinary shares will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in a business combination target. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly, any holders who choose to retain their securities following our initial business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
Although we have identified general criteria that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria.
Although we have identified general criteria for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these criteria, such combination may not be as successful as a combination with a business that does meet all of our general criteria. In addition, if we announce a prospective business combination with a target that does not meet our general criteria, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required by applicable law or stock exchange rule, or we decide to obtain shareholder approval for business or other reasons, it may be more difficult for us to attain shareholder approval of our initial business combination if the target business does not meet our general criteria. If we do not complete our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account.
We are not required to obtain an opinion from an independent accounting or investment banking firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view.
Unless we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent accounting firm or independent investment banking firm which is a member of FINRA that the price we are paying is fair to our shareholders from a financial point of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy solicitation or tender offer materials, as applicable, related to our initial business combination.
We may engage the underwriter or one of its affiliates to provide additional services to us after this offering, which may include acting as financial advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction. The underwriter is entitled to receive deferred commissions that will be released from the trust only on a completion of an initial business combination. These financial incentives may cause the underwriter to have potential conflicts of interest in rendering any such additional services to us after this offering, including, for example, in connection with the sourcing and consummation of an initial business combination.
We may engage the underwriter or one of its affiliates to provide additional services to us after this offering, including, for example, identifying potential targets, providing financial advisory services, acting as a placement agent in a private offering or arranging debt financing. We may pay the underwriter or its affiliate fair and reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with the underwriter or its affiliates and no fees or other compensation for such services will be paid to the underwriter or its affiliates prior to the date that is 60 days from the date of this prospectus, unless FINRA determines that such payment would not be deemed underwriter’s compensation in connection with this offering. The underwriter is also entitled to receive deferred commissions that are conditioned on the completion of an initial business combination. The fact that the underwriter or its affiliates’ financial interests are tied to the consummation of a business combination transaction may give rise to potential conflicts of interest in providing any such additional services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial business combination.
We may issue additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares upon the conversion of the founder shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of association. Any such issuances would dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and articles of association will authorize the issuance of up to 500,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share. Immediately
after this offering (and including the sale of the private placement shares), there will be 484,500,000 and 46,250,000 (assuming in each case that the underwriter has not exercised its over-allotment option) authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance which amount does not take into account shares issuable upon conversion of the Class B ordinary shares, if any. The Class B ordinary shares are automatically convertible into Class A ordinary shares at the time of our initial business combination as described herein and in our amended and restated memorandum and articles of association. Immediately after this offering, there will be no preference shares issued and outstanding.
We may issue a substantial number of additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth herein. However, our amended and restated memorandum and articles of association will provide, among other things, that prior to the completion of our initial business combination, we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial business combination. These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote. The issuance of additional ordinary or preference shares:
▪
may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
▪
may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares;
▪
could cause a change in control if a substantial number of our Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
▪
may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and
▪
may adversely affect prevailing market prices for our Class A ordinary shares.
Our initial shareholders may receive additional Class A ordinary shares if we issue shares to consummate an initial business combination.
The founder shares will automatically convert into Class A ordinary shares on the first business day following the consummation of our initial business combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding (excluding the private placement shares) upon completion of this offering, plus (ii) the sum of the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any private placement shares issued to our sponsor, members of our management team or any of their affiliates upon conversion of working capital loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.
Resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we do not complete our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account.
We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed
transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we do not complete our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account.
An investment in this offering may result in uncertain or adverse U.S. federal income tax consequences.
An investment in this offering may result in uncertain U.S. federal income tax consequences. For instance, it is unclear whether the redemption rights with respect to our ordinary shares suspend the running of a U.S. Holder’s (as defined below in “Taxation — United States Federal Income Tax Considerations — General”) holding period for purposes of determining whether any gain or loss realized by such holder on the sale or exchange of Class A ordinary shares is long-term capital gain or loss and for determining whether any dividend we pay would be considered a “qualified dividend” for U.S. federal income tax purposes. See the section titled “Taxation — United States Federal Income Tax Considerations” for a summary of the U.S. federal income tax considerations of an investment in our securities. Prospective investors are urged to consult their tax advisors with respect to these and other tax consequences of purchasing, holding or disposing of our securities.
We may be a passive foreign investment company, or “PFIC,” which could result in adverse U.S. federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder (as defined in the section of this prospectus captioned “Taxation — United States Federal Income Tax Considerations — General”) of our Class A ordinary shares, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception (see the section of this prospectus captioned “Taxation — United States Federal Income Tax Considerations — U.S. Holders — Passive Foreign Investment Company Rules”). Depending on the particular circumstances, the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable year. Moreover, if we determine we are a PFIC for any taxable year, upon written request, we will endeavor to provide to a U.S. Holder such information as the Internal Revenue Service (“IRS”) may require, including a PFIC Annual Information Statement, in order to enable the U.S. Holder to make and maintain a “qualified electing fund” election, but there can be no assurance that we will timely provide such required information. We urge U.S. investors to consult their tax advisors regarding the possible application of the PFIC rules. For a more detailed discussion of the tax consequences of PFIC classification to U.S. Holders, see the section of this prospectus captioned “Taxation — United States Federal Income Tax Considerations — U.S. Holders — Passive Foreign Investment Company Rules.”
We may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders.
We may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Act, reincorporate in the jurisdiction in which the target company or business is located or in another jurisdiction. The transaction may require a shareholder to recognize taxable income in the jurisdiction in which the shareholder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders to pay such taxes. Shareholders may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.
After our initial business combination, it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be located outside the United States; therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their legal rights,
to effect service of process upon all of our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
In particular, there is uncertainty as to whether the courts of the Cayman Islands or any other applicable jurisdictions would recognize and enforce judgments of U.S. courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or entertain original actions brought in the Cayman Islands or any other applicable jurisdiction’s courts against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States. For a more detailed discussion, see the section of this prospectus captioned “Description of Securities — Certain Differences in Corporate Law.”
We are dependent upon our executive officers and directors and their loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.
Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination, and a particular business combination may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our key personnel may be able to remain with our company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. In addition, pursuant to an agreement to be entered into on or prior to the closing of this offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for appointment to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement, which is described under the section of this prospectus entitled “Description of Securities — Registration and Shareholder Rights.”
We may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources
or information. Our assessment of the capabilities of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any holders who choose to retain their securities following our initial business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs.
Our independent directors also serve as officers and board members for other entities. If our executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. For a complete discussion of our executive officers’ and directors’ other business affairs, please see “Management — Officers, Directors and Director Nominees.”
Our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including another blank check company, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity, subject to his or her fiduciary duties under Cayman Islands law. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law.
In addition, our founders and our directors and officers, , or any of their respective affiliates may in the future become affiliated with other blank check companies that may have acquisition objectives that are similar to ours. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to such other blank check companies prior to its presentation to us, subject to our officers’ and directors’ fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer on the one hand, and us, on the other.
For a complete discussion of our executive officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Management — Officers, Directors and Director Nominees,” “Management — Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”
Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or executive officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our shareholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to us as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’ rights. See the section titled “Description of Securities — Certain Differences in Corporate Law — Shareholders’ Suits” for further information on the ability to bring such claims. However, we might not ultimately be successful in any claim we may make against them for such reason.
We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors or initial shareholders which may raise potential conflicts of interest.
In light of the involvement of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers, directors or initial shareholders. Our directors also serve as officers and board members for other entities, including, without limitation, those described under “Management — Conflicts of Interest.” Our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth in “Proposed Business — Effecting Our Initial Business Combination — Evaluation of a Target Business and Structuring of Our Initial Business Combination” and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, executive officers, directors or initial shareholders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
Since our sponsor, executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they may acquire during or after this offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
On November 24, 2020, we issued to our sponsor 4,312,500 founder shares in exchange for a capital contribution of $25,000, or approximately $0.006 per share. Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. In December 2020, our sponsor transferred 35,000 Class B ordinary shares to each of Dr. Wolfgang and Mr. Weinstein for their service as independent directors. In January 2021, our sponsor transferred 35,000 Class B ordinary shares to Mr. Harris
for his service as an independent director. These 105,000 founder shares are not subject to forfeiture in the event the underwriter's over-allotment option is not exercised. The per share price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued. The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has committed, pursuant to a written agreement, to purchase 500,000 private placement shares (or 545,000 private placement shares if the underwriter’s over-allotment option is exercised in full), at a price of $10.00 per share ($5,000,000 in the aggregate or $5,450,000 if the underwriter’s over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. If we do not consummate an initial business within 24 months from the closing of this offering, the private placement shares will be worthless. The personal and financial interests of our executive officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. This risk may become more acute as the 24-month anniversary of the closing of this offering nears, which is the deadline for our consummation of an initial business combination.
We may issue notes or other debt, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us.
Although we have no commitments as of the date of this prospectus to issue any notes or other debt, or to otherwise incur debt following this offering, we may choose to incur substantial debt to complete our initial business combination. We and our officers have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
▪
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
▪
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
▪
our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
▪
our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
▪
our inability to pay dividends on our Class A ordinary shares;
▪
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
▪
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
▪
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
▪
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
We may only be able to complete one business combination with the proceeds of this offering and the sale of the private placement shares, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.
The net proceeds from this offering and the sale of the private placement shares will provide us with up to $145,750,000 (or $167,462,500 if the underwriter’s over-allotment option is exercised in full) that we may use to complete our initial business combination (after taking into account the $5,250,000, or $6,037,500 if the over-allotment option is exercised in full, of deferred underwriting commissions being held in the trust account) and the estimated out-of-pocket expenses of this offering.
We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:
▪
solely dependent upon the performance of a single business, property or asset; or
▪
dependent upon the development or market acceptance of a single or limited number of products, processes or services.
This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
Our management may not be able to maintain control of a target business after our initial business combination. Upon the loss of control of a target business, new management may not possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination so that the post-business combination company in which our public shareholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-business combination company owns 50% or more of the voting securities of the target, our shareholders prior to the completion of our initial business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new Class A ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our outstanding Class A ordinary shares subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in a single person or
group obtaining a larger portion of the company’s shares than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain control of the target business.
We may seek business combination opportunities with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our desired results.
We may seek business combination opportunities with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the business combination may not be as successful as we anticipate.
To the extent we complete our initial business combination with a large complex business or entity with a complex operating structure, we may also be affected by numerous risks inherent in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy. Although our management team will endeavor to evaluate the risks inherent in a particular target business and its operations, we may not be able to properly ascertain or assess all of the significant risk factors until we complete our business combination. If we are not able to achieve our desired operational improvements, or the improvements take longer to implement than anticipated, we may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of our control and leave us with no ability to control or reduce the chances that those risks and complexities will adversely impact a target business. Such combination may not be as successful as a combination with a smaller, less complex organization.
We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our shareholders do not agree.
Our amended and restated memorandum and articles of association will not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). As a result, we may be able to complete our initial business combination even though a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments. We may seek to amend our amended and restated memorandum and articles of association or governing instruments in a manner that will make it easier for us to complete our initial business combination that our shareholders may not support.
In order to effectuate a business combination, blank check companies have, in the recent past, amended various provisions of their charters and governing instruments. For example, blank check companies have amended the definition of business combination, increased redemption thresholds and extended the time to consummate a business combination. Amending our amended and restated memorandum and articles of association will require at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company. In addition, our amended and restated memorandum and articles of association will require us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity. To the extent any of such amendments would be deemed to
fundamentally change the nature of the securities offered through this registration statement, we would register, or seek an exemption from registration for, the affected securities.
The provisions of our amended and restated memorandum and articles of association that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of a special resolution which requires the approval of the holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association to facilitate the completion of an initial business combination that some of our shareholders may not support.
Some other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a company’s pre-business combination activity, without approval by a certain percentage of the company’s shareholders. In those companies, amendment of these provisions typically requires approval by between 90% and 100% of the company’s shareholders. Our amended and restated memorandum and articles of association will provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the sale of the private placement shares into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution, meaning holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 65% of our ordinary shares; provided that the provisions of our amended and restated memorandum and articles of association governing the appointment or removal of directors prior to our initial business combination may only be amended by a special resolution passed by holders representing at least two-thirds of our outstanding Class B ordinary shares. Our initial shareholders, and their permitted transferees, if any, who will collectively beneficially own, on an as-converted basis, 20% of our Class A ordinary shares upon the closing of this offering (excluding the private placement shares and assuming they do not purchase any shares in this offering), will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated memorandum and articles of association which govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete a business combination with which you do not agree. Our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity; unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares. Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, executive officers, directors or director nominees for any breach of these agreements. As a result, in the event of a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.
We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination. If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account.
Although we believe that the net proceeds of this offering and the sale of the private placement shares will be sufficient to allow us to complete our initial business combination, because we have not yet selected any prospective target business we cannot ascertain the capital requirements for any particular transaction. If the
net proceeds of this offering and the sale of the private placement shares prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. Such financing may not be available on acceptable terms, if at all. The current economic environment may make difficult for companies to obtain acquisition financing. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. If we do not complete our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account. In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or shareholders is required to provide any financing to us in connection with or after our initial business combination.
Our initial shareholders control a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.
Upon the closing of this offering, our initial shareholders will own, on an as-converted basis, 20% of our issued and outstanding ordinary shares (excluding the private placement shares). Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association. If our initial shareholders purchases any shares in this offering or if our initial shareholders purchases any additional Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our sponsor nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A ordinary shares. In addition, our board of directors, whose members were elected by our sponsor, is and will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. We may not hold an annual general meeting to appoint new directors prior to the completion of our initial business combination, in which case all of the current directors will continue in office until at least the completion of the business combination. If there is an annual meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for election and our sponsor, because of its ownership position, will control the outcome, as only holders of our Class B ordinary shares will have the right to vote on the appointment of directors and to remove directors prior to our initial business combination. Accordingly, our sponsor will continue to exert control at least until the completion of our initial business combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
Our sponsor contributed $25,000, or approximately $0.006 per founder share, and, accordingly, you will experience immediate and substantial dilution from the purchase of our Class A ordinary shares.
The difference between the public offering price per share and the pro forma net tangible book value per Class A ordinary share after this offering constitutes the dilution to you and the other investors in this offering. Our sponsor acquired the founder shares at a nominal price, significantly contributing to this dilution. Upon the closing of this offering, you and the other public shareholders will incur an immediate and substantial dilution of approximately 90.3% (or $9.03 per share, assuming no exercise of the underwriter’s over-allotment option), the difference between the pro forma net tangible book value per share of $0.97 and the initial offering price of $10.00 per share. This dilution would increase to the extent that the anti-dilution provisions of the founder shares result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the founder shares at the time of our initial business combination and would become exacerbated to the extent that public shareholders seek redemptions from the trust for their public shares. In addition, because of the anti-dilution protection in the founder shares, any equity or equity-linked securities issued in connection with our initial business combination would be disproportionately dilutive to our Class A ordinary shares.
The determination of the offering price of our Class A ordinary shares and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our Class A ordinary shares properly reflects the value of such shares than you would have in a typical offering of an operating company.
Prior to this offering there has been no public market for any of our securities. The public offering price of the Class A ordinary shares was negotiated between us and the underwriter. In determining the size of this offering, management held customary organizational meetings with the underwriter, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriter believed it reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of the Class A ordinary shares include:
▪
the history and prospects of companies whose principal business is the acquisition of other companies;
▪
prior offerings of those companies;
▪
our prospects for acquiring an operating business at attractive values;
▪
a review of debt-to-equity ratios in leveraged transactions;
▪
our capital structure;
▪
an assessment of our management and their experience in identifying operating companies;
▪
general conditions of the securities markets at the time of this offering; and
▪
other factors as were deemed relevant.
Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results.
There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
There is currently no market for our securities. Shareholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions, including as a result of the COVID-19 outbreak. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
Because we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.
The federal proxy rules require that a proxy statement with respect to a vote on our proposed business combination include historical and/or pro forma financial statement disclosure. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within 24 months from the closing of this offering.
We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A ordinary shares held by non-affiliates equals or exceeds $700,000,000 as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates equals or exceeds $250,000,000 as of the prior June 30, and (2) our annual revenues equaled or exceeded $100,000,000 during such completed fiscal year or the market value of our ordinary shares held by non-affiliates equals or exceeds $700,000,000 as of the prior June 30. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate a business combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.
We are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or executive officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs and the rights of shareholders will be governed by our amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to
time) and the common law of the Cayman Islands. We will also be subject to the federal securities laws of the United States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States. For a more detailed discussion of the principal differences between the provisions of the Companies Act applicable to us and, for example, the laws applicable to companies incorporated in the United States and their shareholders, see the section of this prospectus captioned “Description of Securities — Certain Differences in Corporate Law.”
Shareholders of Cayman Islands exempted companies like the company have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of the register of members of these companies. Our directors have discretion under our amended and restated memorandum and articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
We have been advised by Maples and Calder, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a United States company.
Provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench management.
Our amended and restated memorandum and articles of association will contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests. These provisions will include a staggered board of directors, the ability of the board of directors to designate the terms of and issue new series of preference shares, and the fact that prior to the completion of our initial business combination only holders of our Class B ordinary shares, which have been issued to our sponsor, are entitled to vote on the appointment of directors, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
Since only holders of our founder shares will have the right to vote on the appointment of directors, upon the listing of our shares on Nasdaq, Nasdaq may consider us to be a “controlled company” within the meaning of Nasdaq rules and, as a result, we may qualify for exemptions from certain corporate governance requirements.
After completion of this offering, only holders of our founder shares will have the right to vote on the appointment of directors. As a result, Nasdaq may consider us to be a “controlled company” within the meaning of the Nasdaq corporate governance standards. Under the Nasdaq corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements that:
▪
we have a board that includes a majority of “independent directors,” as defined under the rules of Nasdaq;
▪
we have a compensation committee of our board with a written charter addressing the committee’s purpose and responsibilities; and
▪
we have a nominating and corporate governance committee of our board with a written charter addressing the committee’s purpose and responsibilities.
We do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of Nasdaq, subject to applicable phase-in rules. However, if we determine in the future to utilize some or all of these exemptions, you will not have the same protections afforded to shareholders of companies that are subject to all of Nasdaq corporate governance requirements.
Risks Associated with Acquiring and Operating a Business in Foreign Countries
If we pursue a target company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:
▪
costs and difficulties inherent in managing cross-border business operations;
▪
rules and regulations regarding currency redemption;
▪
complex corporate withholding taxes on individuals;
▪
laws governing the manner in which future business combinations may be effected;
▪
exchange listing and/or delisting requirements;
▪
tariffs and trade barriers;
▪
regulations related to customs and import/export matters;
▪
local or regional economic policies and market conditions;
▪
unexpected changes in regulatory requirements;
▪
longer payment cycles;
▪
tax issues, such as tax law changes and variations in tax laws as compared to the United States;
▪
currency fluctuations and exchange controls;
▪
rates of inflation;
▪
challenges in collecting accounts receivable;
▪
cultural and language differences;
▪
employment regulations;
▪
underdeveloped or unpredictable legal or regulatory systems;
▪
corruption;
▪
protection of intellectual property;
▪
social unrest, crime, strikes, riots and civil disturbances;
▪
regime changes and political upheaval;
▪
terrorist attacks, natural disasters and wars; and
▪
deterioration of political relations with the United States.
We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we complete such combination, our operations might suffer, either of which may adversely impact our business, financial condition and results of operations.
If our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.
Following our initial business combination, our management may resign from their positions as officers or directors of the company and the management of the target business at the time of the business combination will remain in place. Management of the target business may not be familiar with United States securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and social conditions and government policies, developments and conditions in the country in which we operate.
The economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial business combination, the ability of that target business to become profitable.
Exchange rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business combination, our financial condition and results of operations.
Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction.
We may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may not be able to enforce our legal rights.
In connection with our initial business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.
We are subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from seeking a business combination target.
Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:
▪
our ability to select an appropriate target business or businesses;
▪
our ability to complete our initial business combination;
▪
our expectations around the performance of a prospective target business or businesses;
▪
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
▪
our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;
▪
our potential ability to obtain additional financing to complete our initial business combination;
▪
our pool of prospective target businesses;
▪
our ability to consummate an initial business combination due to the uncertainty resulting from the recent COVID-19 pandemic;
▪
the ability of our officers and directors to generate a number of potential business combination opportunities;
▪
our public securities’ potential liquidity and trading;
▪
the lack of a market for our securities;
▪
the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;
▪
the trust account not being subject to claims of third parties; or
▪
our financial performance following this offering.
The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
USE OF PROCEEDS
We are offering 15,000,000 Class A ordinary shares at an offering price of $10.00 per share. We estimate that the net proceeds of this offering, together with the funds we will receive from the sale of the private placement shares, will be used as set forth in the following table.
| |
|
|
WITHOUT OVER-
ALLOTMENT
OPTION
|
|
|
OVER-
ALLOTMENT
OPTION
EXERCISED
|
|
| Gross proceeds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross proceeds from shares offered to public(1)
|
|
|
|
$ |
150,000,000 |
|
|
|
|
$ |
172,500,000 |
|
|
|
Gross proceeds from sale of the private placement shares offered in a private placement to the sponsor
|
|
|
|
|
5,000,000 |
|
|
|
|
|
5,450,000 |
|
|
|
Total gross proceeds
|
|
|
|
$ |
155,000,000 |
|
|
|
|
$ |
177,950,000 |
|
|
| Estimated Offering expenses(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting commissions (2.0% of gross proceeds from shares offered to public, excluding deferred portion)(3)
|
|
|
|
$ |
3,000,000 |
|
|
|
|
$ |
3,450,000 |
|
|
|
Legal fees and expenses
|
|
|
|
|
325,000 |
|
|
|
|
|
325,000 |
|
|
|
Printing and engraving expenses
|
|
|
|
|
35,000 |
|
|
|
|
|
35,000 |
|
|
|
Accounting fees and expenses
|
|
|
|
|
60,000 |
|
|
|
|
|
60,000 |
|
|
|
SEC/FINRA Expenses
|
|
|
|
|
45,000 |
|
|
|
|
|
45,000 |
|
|
|
Travel and road show
|
|
|
|
|
20,000 |
|
|
|
|
|
20,000 |
|
|
|
Nasdaq listing and filing fees
|
|
|
|
|
75,000 |
|
|
|
|
|
75,000 |
|
|
|
Director & Officer liability insurance premiums
|
|
|
|
|
350,000 |
|
|
|
|
|
350,000 |
|
|
|
Miscellaneous
|
|
|
|
|
90,000 |
|
|
|
|
|
90,000 |
|
|
|
Total estimated offering expenses (excluding underwriting commissions)
|
|
|
|
$ |
1,000,000 |
|
|
|
|
$ |
1,000,000 |
|
|
|
Proceeds after estimated offering expenses
|
|
|
|
$ |
151,000,000 |
|
|
|
|
$ |
173,500,000 |
|
|
|
Held in trust account(3)
|
|
|
|
$ |
150,000,000 |
|
|
|
|
$ |
172,500,000 |
|
|
|
% of public offering size
|
|
|
|
|
100% |
|
|
|
|
|
100% |
|
|
|
Not held in trust account
|
|
|
|
$ |
1,000,000 |
|
|
|
|
$ |
1,000,000 |
|
|
| |
The following table shows the use of the $1,000,000 of net proceeds not held in the trust account.(4)(5)
| |
|
|
AMOUNT%
|
|
|
OF TOTAL
|
|
|
Legal, accounting, due diligence, travel, and other expenses in connection with any
business combination(6)
|
|
|
|
|
350,000 |
|
|
|
|
|
35.0% |
|
|
|
Legal and accounting fees related to regulatory reporting obligations
|
|
|
|
|
150,000 |
|
|
|
|
|
15.0% |
|
|
|
Payment for office space, administrative and support services
|
|
|
|
|
240,000 |
|
|
|
|
|
24.0% |
|
|
|
Nasdaq continued listing fees
|
|
|
|
|
55,000 |
|
|
|
|
|
5.5% |
|
|
|
Reserve for liquidation
|
|
|
|
|
100,000 |
|
|
|
|
|
10.0% |
|
|
|
Working capital to cover miscellaneous expenses and reserves
|
|
|
|
|
105,000 |
|
|
|
|
|
10.5% |
|
|
|
Total
|
|
|
|
$ |
1,000,000 |
|
|
|
|
|
100.0% |
|
|
| |
(1)
Includes amounts payable to public shareholders who properly redeem their shares in connection with our successful completion of our initial business combination.
(2)
In addition, a portion of the offering expenses have been paid from the proceeds of loans from our sponsor of up to $300,000 as described in this prospectus. As of the date of this prospectus, we had $57,195 of borrowings under the promissory note with our sponsor. These loans will be repaid upon completion of this offering out of the $1,000,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) and not to be held in the trust account. In the event that offering expenses are less than set
forth in this table, any such amounts will be used for post-closing working capital expenses. In the event that the offering expenses are more than as set forth in this table, we may fund such excess with funds not held in the trust account.
(3)
The underwriter has agreed to defer underwriting commissions of 3.5% of the gross proceeds of this offering. Upon and concurrently with the completion of our initial business combination, $5,250,000, which constitutes the underwriter’s deferred commissions (or $6,037,500 if the underwriter’s over-allotment option is exercised in full) will be paid to the underwriter from the funds held in the trust account. See “Underwriting.” The remaining funds, less amounts released to the trustee to pay redeeming shareholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriter will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.
(4)
These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring our initial business combination based upon the level of complexity of such business combination. In the event we identify a business combination target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount in the table above does not include interest available to us from the trust account. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Assuming an interest rate of 0.1% per year, we estimate the interest earned on the trust account will be approximately $150,000 per year; however, we can provide no assurances regarding this amount.
(5)
Assumes no exercise of the underwriter’s over-allotment option.
(6)
Includes estimated amounts that may also be used in connection with our initial business combination to fund a “no shop” provision and commitment fees for financing.
The rules of Nasdaq provide that at least 90% of the gross proceeds from this offering and the sale of the private placement shares be deposited in a trust account. Of the $155,000,000 in proceeds we receive from this offering and the sale of the private placement shares described in this prospectus, or $177,950,000 if the underwriter’s over-allotment option is exercised in full, $150,000,000 ($10.00 per share), or $172,500,000 if the underwriter’s over-allotment option is exercised in full ($10.00 per share), will be deposited into a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and $5,000,000, or up to $5,450,000 if the underwriter’s over-allotment option is exercised in full, will be used to pay expenses in connection with the closing of this offering (including the portion of the underwriting commissions payable upon closing of this offering) and for working capital following this offering. We will not be permitted to withdraw any of the principal or interest held in the trust account, except with respect to interest earned on the funds held in the trust account that may be released to us to pay our income taxes, if any, until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we have not consummated an initial business combination within 24 months from the closing of this offering, subject to applicable law, and (iii) the redemption of our public shares properly submitted in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity. Based on current interest rates, we expect that interest income earned on the trust account (if any) will be sufficient to pay our income taxes.
The net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our initial business combination. If our initial business combination is paid for using equity or debt, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash released from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-business combination company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination.
We believe that amounts not held in trust, together with funds available to us from loans from our sponsor, members of our management team or any of their affiliates will be sufficient to pay the costs and expenses to which such proceeds are allocated. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required
to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our sponsor, members of our management team or any of their affiliates, but such persons are not under any obligation to advance funds to, or invest in, us.
We will reimburse our sponsor for office space, secretarial and administrative services provided to members of our management team, in the amount of up to $10,000 per month. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
Our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. As of January 19, 2021, we had $57,195 of borrowings under the promissory note with our sponsor. These loans are non-interest bearing, unsecured and are due at the earlier of March 31, 2021 and the closing of this offering. The loans will be repaid upon the closing of this offering out of the $1,000,000 of offering proceeds that has been allocated to the payment of offering expenses.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans would be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into shares of the post-business combination company at a price of $10.00 per share at the option of the lender. The shares would be identical to the private placement shares. Except as set forth above, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor, members of our management team or any of their affiliates as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
DIVIDEND POLICY
We have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time, and we will only pay such dividend out of our profits or share premium (subject to solvency requirements) as permitted under Cayman Islands law. If we increase the size of this offering, we will effect a share capitalization or other appropriate mechanism immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 20% of our issued and outstanding ordinary shares (excluding the private placement shares) upon the consummation of this offering. Further, if we incur any indebtedness in connection with a business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
DILUTION
The difference between the public offering price per Class A ordinary share and the pro forma net tangible book value per Class A ordinary share after this offering constitutes the dilution to investors in this offering. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of Class A ordinary shares which may be redeemed for cash), by the number of outstanding Class A ordinary shares.
At November 24, 2020, our net tangible book deficit was $30,000, or approximately $(0.01) per ordinary share. After giving effect to the sale of 15,000,000 Class A ordinary shares pursuant to this offering (or 17,250,000 Class A ordinary shares if the underwriter’s over-allotment option is exercised in full), the sale of the private placement shares and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at November 24, 2020 would have been $5,000,010, or $0.97 per share (or $0.85 per share, if the underwriter’s over-allotment option is exercised in full), representing an immediate increase in net tangible book value (as decreased by the value of 14,076,999 Class A ordinary shares that may be redeemed for cash, or 16,248,249 Class A ordinary shares if the underwriter’s over-allotment option is exercised in full) of $0.98 per share (or $0.86 per share if the underwriter’s over-allotment option is exercised in full) to our sponsor as of the date of this prospectus and an immediate dilution to public shareholders from this offering of $10.00 per public share. Total dilution to public shareholders from this offering will be $9.03 per share (or $9.15 per share if the underwriter’s over-allotment option is exercised in full).
The following table illustrates the dilution to the public shareholders on a per-share basis:
| |
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Public offering price
|
|
|
|
|
|
|
|
|
|
$ |
10.00 |
|
|
|
|
|
|
|
|
|
|
$ |
10.00 |
|
|
|
Net tangible book deficit before this offering
|
|
|
|
|
(0.01) |
|
|
|
|
|
|
|
|
|
|
|
(0.01) |
|
|
|
|
|
|
|
|
|
Increase attributable to public shareholders
|
|
|
|
|
0.98 |
|
|
|
|
|
|
|
|
|
|
|
0.86 |
|
|
|
|
|
|
|
|
|
Pro forma net tangible book value after this offering and the sale of the
private placement shares
|
|
|
|
|
|
|
|
|
|
|
0.97 |
|
|
|
|
|
|
|
|
|
|
|
0.85 |
|
|
|
Dilution to public shareholders
|
|
|
|
|
|
|
|
|
|
$ |
9.03 |
|
|
|
|
|
|
|
|
|
|
$ |
9.15 |
|
|
|
Percentage of dilution to public shareholders
|
|
|
|
|
|
|
|
|
|
|
90.3% |
|
|
|
|
|
|
|
|
|
|
|
91.5% |
|
|
| |
For purposes of presentation, we have reduced our pro forma net tangible book value after this offering (assuming no exercise of the underwriter’s over-allotment option) by $140,769,990 because holders of up to approximately 93.8% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per share redemption price equal to the amount in the trust account as set forth in our tender offer or proxy materials (initially anticipated to be the aggregate amount held in trust two business days prior to the commencement of our tender offer or general meeting, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares).
The following table sets forth information with respect to our initial shareholders, who hold our Class B ordinary shares, and the public shareholders:
| |
|
|
SHARES PURCHASED
|
|
|
TOTAL CONSIDERATION
|
|
|
AVERAGE PRICE
PER SHARE
|
|
| |
|
|
NUMBER
|
|
|
PERCENTAGE
|
|
|
AMOUNT
|
|
|
PERCENTAGE
|
|
|
Class B Ordinary Shares(1)
|
|
|
|
$ |
3,750,000 |
|
|
|
|
|
19.48% |
|
|
|
|
$ |
25,000 |
|
|
|
|
|
0.02% |
|
|
|
|
$ |
0.007 |
|
|
|
Private Placement Shares
|
|
|
|
|
500,000 |
|
|
|
|
|
2.60% |
|
|
|
|
|
5,000,000 |
|
|
|
|
|
3.23% |
|
|
|
|
$ |
10.00 |
|
|
|
Public Shareholders
|
|
|
|
|
15,000,000 |
|
|
|
|
|
77.92% |
|
|
|
|
|
150,000,000 |
|
|
|
|
|
96.75% |
|
|
|
|
$ |
10.00 |
|
|
| |
|
|
|
$ |
19,250,000 |
|
|
|
|
|
100.00% |
|
|
|
|
$ |
150,025,000 |
|
|
|
|
|
100.00% |
|
|
|
|
|
|
|
|
| |
(1)
Assumes no exercise of the underwriter’s over-allotment option and the corresponding forfeiture of 562,500 Class B ordinary shares held by our sponsor.
The pro forma net tangible book value per share after this offering (assuming that the underwriter does not exercise its over-allotment option) is calculated as follows:
| |
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tangible book deficit before this offering
|
|
|
|
$ |
(30,000) |
|
|
|
|
$ |
(30,000) |
|
|
|
Net proceeds from this offering and sale of the private placement shares(1)
|
|
|
|
|
151,000,000 |
|
|
|
|
|
173,500,000 |
|
|
|
Plus: Offering costs paid in advance, excluded from tangible book value
|
|
|
|
|
50,000 |
|
|
|
|
|
50,000 |
|
|
|
Less: Deferred underwriting commissions
|
|
|
|
|
(5,250,000) |
|
|
|
|
|
(6,037,500) |
|
|
|
Less: Proceeds held in trust subject to redemption(2)
|
|
|
|
|
(140,769,990) |
|
|
|
|
|
(162,482,490) |
|
|
| |
|
|
|
$ |
5,000,010 |
|
|
|
|
$ |
5,000,010 |
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares outstanding prior to this offering
|
|
|
|
|
4,312,500 |
|
|
|
|
|
4,312,500 |
|
|
|
Ordinary shares forfeited if over-allotment is not exercised
|
|
|
|
|
(562,500) |
|
|
|
|
|
— |
|
|
|
Private placement shares
|
|
|
|
|
500,000 |
|
|
|
|
|
545,000 |
|
|
|
Ordinary shares included in this offering
|
|
|
|
|
15,000,000 |
|
|
|
|
|
17,250,000 |
|
|
|
Less: Ordinary shares subject to redemption
|
|
|
|
|
(14,076,999) |
|
|
|
|
|
(16,248,249) |
|
|
| |
|
|
|
|
5,173,001 |
|
|
|
|
|
5,859,251 |
|
|
| |
(1)
Expenses applied against gross proceeds include offering expenses of $1,000,000 and underwriting commissions of $3,000,000 or $3,450,000 if the underwriter exercise its over-allotment option (excluding deferred underwriting fees). See “Use of Proceeds.”
(2)
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. In the event of any such purchases of our shares prior to the completion of our initial business combination, the number of Class A ordinary shares subject to redemption will be reduced by the amount of any such purchases, increasing the pro forma net tangible book value per share. See “Proposed Business — Effecting Our Initial Business Combination — Permitted Purchases and Other Transactions with Respect to Our Securities.”
CAPITALIZATION
The following table sets forth our capitalization at November 24, 2020, and as adjusted to give effect to the filing of our amended and restated memorandum and articles of association, the sale of our shares in this offering and the private placement shares and the application of the estimated net proceeds derived from the sale of such securities:
| |
|
|
November 24, 2020
|
|
| |
|
|
Actual
|
|
|
As Adjusted(1)
|
|
|
Note payable – related party(2)
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
Deferred underwriting commissions(3)
|
|
|
|
|
— |
|
|
|
|
|
5,250,000 |
|
|
|
Class A ordinary shares, $0.0001 par value, 500,000,000 shares authorized; -0- and 14,076,999 shares are subject to possible redemption, actual and adjusted, respectively
|
|
|
|
|
— |
|
|
|
|
|
140,769,990 |
|
|
|
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding, actual and as adjusted
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Class A ordinary shares, $0.0001 par value, 500,000,000 shares authorized;
-0- and 1,423,001 shares issued and outstanding (excluding -0- and
14,076,999 shares subject to possible redemption), actual and as adjusted,
respectively(4)
|
|
|
|
|
— |
|
|
|
|
|
142 |
|
|
|
Class B ordinary shares, $0.0001 par value, 50,000,000 shares authorized, 4,312,500 and 3,750,000 shares issued and outstanding, actual and as adjusted, respectively
|
|
|
|
|
431 |
|
|
|
|
|
375 |
|
|
|
Additional paid-in capital
|
|
|
|
|
24,569 |
|
|
|
|
|
5,004,493 |
|
|
|
Accumulated deficit
|
|
|
|
|
(5,000) |
|
|
|
|
|
(5,000) |
|
|
|
Total shareholders’ equity
|
|
|
|
$ |
20,000 |
|
|
|
|
$ |
5,000,010 |
|
|
|
Total capitalization
|
|
|
|
$ |
20,000 |
|
|
|
|
$ |
151,020,000 |
|
|
| |
(1)
Assumes no exercise of the underwriter’s over-allotment option and the corresponding forfeiture of 562,500 Class B ordinary shares held by our sponsor.
(2)
Our sponsor may loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering. As of January 19, 2021, we had borrowed $57,195 from our sponsor to cover for expenses in connection with this offering.
(3)
$0.35 per share, or $5,250,000 in the aggregate, will be payable to the underwriter for deferred underwriting commissions. The deferred underwriting commissions will become payable to the underwriter from the amounts held in the trust account solely in the event that the company completes a business combination, subject to the terms of the underwriting agreement. The company records deferred underwriting commissions upon the closing of the initial public offering as a reduction of additional paid-in capital. Since the actual additional paid-in capital was reduced by the recording of the accrued deferred underwriting commission, total capitalization, as adjusted, includes the amount of the deferred underwriting commission to reflect total capitalization.
(4)
Upon the completion of our initial business combination, we will provide our public shareholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein whereby redemptions cannot cause our net tangible assets to be less than $5,000,001 and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a blank check company incorporated on November 18, 2020 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the private placement shares, our shares, debt or a combination of cash, equity and debt.
The issuance of additional shares in a business combination:
▪
may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
▪
may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares;
▪
could cause a change in control if a substantial number of our Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
▪
may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and
▪
may adversely affect prevailing market prices for our Class A ordinary shares.
Similarly, if we issue debt or otherwise incur significant debt, it could result in:
▪
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
▪
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
▪
our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
▪
our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
▪
our inability to pay dividends on our Class A ordinary shares;
▪
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
▪
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
▪
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
▪
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
As indicated in the accompanying financial statements, as of November 24, 2020, we had no cash and deferred offering costs of approximately $50,000. Further, we expect to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering.
Liquidity and Capital Resources
Our liquidity needs have been satisfied prior to the completion of this offering through receipt of a $25,000 capital contribution from our sponsor in exchange for the issuance of the founder shares to our sponsor and a commitment from our sponsor to loan up to $300,000 to us to cover our expenses in connection with this offering.
We estimate that the net proceeds from (i) the sale of the Class A ordinary shares in this offering, after deducting offering expenses of $1,000,000, underwriting commissions of $3,000,000, or $3,450,000 if the underwriter’s over-allotment option is exercised in full (excluding deferred underwriting commissions of $5,250,000, or $6,037,500 if the underwriter’s over-allotment option is exercised in full), and (ii) the sale of the private placement shares for a purchase price of $5,000,000 (or $5,450,000 if the underwriter’s over-allotment option is exercised in full) will be $151,000,000 (or $173,500,000 if the underwriter’s over-allotment option is exercised in full). $150,000,000 (or $172,500,000 if the underwriter’s over-allotment option is exercised in full) will be held in the trust account, which includes the deferred underwriting commissions described above. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. The remaining $1,000,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less taxes payable and deferred underwriting commissions), to complete our initial business combination. We may withdraw interest income (if any) to pay income taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the interest income earned on the amount in the trust account (if any) will be sufficient to pay our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completion of our initial business combination, we will have available to us the $1,000,000 of proceeds held outside the trust account, as well as certain funds from loans from our sponsor, members of our management team or any of their affiliates. We will use these funds to primarily identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.
We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business prior to the completion of our initial business combination, other than funds available from loans from our sponsor, members of our management team or any of their affiliates. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and
negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to the completion of our initial business combination. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into shares of the post-business combination company at a price of $10.00 per share at the option of the lender. The shares would be identical to the private placement shares. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor, members of our management team or any of their affiliates as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
We expect our primary liquidity requirements during that period to include approximately $350,000 for legal, accounting, due diligence, travel and other expenses in connection with any business combinations; $150,000 for legal and accounting fees related to regulatory reporting obligations; $55,000 for Nasdaq continued listing fees; $100,000 reserved for liquidation; and $105,000 for general working capital that will be used for miscellaneous expenses and reserves. We will also reimburse our sponsor for office space, secretarial and administrative services provided to us in the amount of up to $10,000 per month ($240,000 in the aggregate).
These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.
Moreover, we may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account, or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. If we have not consummated our initial business combination within 24 months from the closing of this offering because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account.
Controls and Procedures
We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2021. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company would we be required to comply with the independent registered public accounting firm attestation requirement on internal control over financial reporting. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.
Prior to the closing of this offering, we have not completed an assessment, nor have our auditors tested our systems, of our internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as:
▪
staffing for financial, accounting and external reporting areas, including segregation of duties;
▪
reconciliation of accounts;
▪
proper recording of expenses and liabilities in the period to which they relate;
▪
evidence of internal review and approval of accounting transactions;
▪
documentation of processes, assumptions and conclusions underlying significant estimates; and
▪
documentation of accounting policies and procedures.
Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expenses in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.
Once our management’s report on internal controls is complete, we will retain our independent auditors to audit and render an opinion on such report when required by Section 404 of the Sarbanes-Oxley Act. The independent auditors may identify additional issues concerning a target business’s internal controls while performing their audit of internal control over financial reporting.
Quantitative and Qualitative Disclosures about Market Risk
The net proceeds of this offering and the sale of the private placement shares held in the trust account will be invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of November 24, 2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have not conducted any operations to date.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory
audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.
PROPOSED BUSINESS
Introduction
We are a newly organized blank check company incorporated in November 18, 2020 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We have generated no operating revenues to date and we do not expect that we will generate operating revenues until we consummate our initial business combination.
Our Founders
Our sponsor is forming HealthCor Catalio Acquisition Corp. in order to further capitalize on their joint knowledge of healthcare markets. They believe their decades of experience investing in private and public healthcare companies is a key differentiator as compared to other blank check companies.
HealthCor was founded in 2005 and manages approximately $2.7 billion in assets across long/short and long only healthcare funds. HealthCor centers its investment strategy on in-depth and fundamental research and has developed deep institutional knowledge of and extensive contacts across the healthcare industry. HealthCor’s Co-Founders, Joe Healey and Art Cohen, have been investing side-by-side for over 20 years, and they collectively have over 60 years of investment experience. Avi Horev and Chris Gaulin, Portfolio Managers at HealthCor, each have over 23 years of investment experience. The HealthCor investment research team includes specialists across biotechnology, pharmaceutical, healthcare services, and medical technology sub-sectors within healthcare. HealthCor’s Co-Founders, Portfolio Managers, and research team have built strong reputations in the healthcare industry over the past 15 years, with investment peers and companies alike. HealthCor’s tenure, reputation, and relationships will be an asset to HealthCor Catalio Acquisition Corp.
Catalio is a private equity firm that invests in breakthrough biomedical technology companies founded by the world’s leading scientist-entrepreneurs. Catalio provides invaluable private market investing experience and a vast network of companies, medical professionals, and academics to HealthCor Catalio Acquisition Corp. Catalio manages approximately $150 million in assets. Catalio was co-founded by George Petrocheilos and Dr. Jacob Vogelstein, who formerly co-founded a healthcare private equity strategy at Camden Partners, a multi-strategy private equity firm that spun out of T. Rowe Price. Catalio has recruited and invested with a group of 28 world-renowned doctors and scientists as venture partners to identify investment opportunities and provide professional advices. Catalio is able to leverage its network of venture partners and their respective labs, centers, and institutes for proprietary deal-flow. Catalio has invested in over 20 innovative, high-growth companies and recently closed its second venture fund, Catalio Nexus II, which was oversubscribed and closed at its hard cap of $100 million. Catalio, and its elite group of healthcare experts will serve as a resource for HealthCor Catalio Acquisition Corp.
Industry Opportunity
While we may acquire a business in any industry, our focus will be on the healthcare industry in the United States and other developed countries. We believe the healthcare industry, particularly the life sciences and medical technology sectors, represents an enormous and growing target market with a large number of potential target acquisition opportunities.
Healthcare spending in the U.S. currently exceeds $3.6 trillion. The Centers for Medicare and Medicaid Services estimate that total U.S. national health expenditures will exceed $6.2 trillion by 2028, more than doubling over a 20-year timeframe and reaching nearly 20% of U.S. GDP. At the same time, populations in developed countries are aging and gaining greater access to healthcare, increasing the demand within healthcare systems. Additionally, the number of private companies in the healthcare industry is significant, with over 30,000 firms focused on various sub-sectors of the healthcare value chain in the United States alone according to S&P Global Market Intelligence. The market dynamics are similar in Europe and other developed countries. We intend to focus our investment effort broadly across the healthcare industry, which encompasses biotechnology, pharmaceuticals, services, and medical technology sub-sectors. We believe that our investing and operating expertise, network of venture partners, and strong relationships throughout the healthcare industry
will give us a large, addressable universe of potential targets. This, along with the positive tailwinds in the healthcare industry maximizes the likelihood that our management team will be able to identify and execute an attractive transaction.
The Current Medical Technology and Life Sciences IPO Market
We believe that the current state of the medical technology and life sciences IPO markets may enhance our ability to locate an attractive target. Over 200 life sciences and medical technology companies have gone public since 2016 in the United States.
We believe that privately held medical technology and life sciences companies represent an enormous investment opportunity, and recent trends in equity capital markets continue to demonstrate the desire of these companies to access public capital. Since 2015, approximately $298 billion has been raised in the public equity markets by medical technology and life sciences companies. Approximately $48 billion has been raised through initial public offerings of 320 life sciences companies and approximately $6 billion has been raised through initial public offerings of 42 medical technology companies. We believe an acquisition by a special purpose acquisition company with a management team that is well-known and respected in the industry can provide a more transparent and efficient mechanism to bring a private healthcare company to the public markets. We also believe the combination of a strong IPO market and the benefits from being publicly traded, including greater access to capital, more liquid securities, and increased customer awareness will help us bring an attractive company to the public markets.
Acquisition Strategy
We intend to capitalize on the platforms of our two founders, HealthCor and Catalio. Both founders have experience in investing across a variety of healthcare sub-sectors and a track record of identifying high-quality assets, businesses and management teams. We believe HealthCor’s bottom-up fundamental research together with Catalio’s access to a group of world-renowned, serial scientist-entrepreneurs improve our ability to identify and acquire potential targets. Our selection process will leverage our relationships with leading venture capitalists and growth equity funds, executives of private and public companies, leading investment banking firms, and world-renowned scientists and medical professionals, which we believe should provide us with a key competitive advantage in sourcing potential business combination targets. Given our profile and dedicated industry approach, we anticipate that target business candidates may be brought to our attention from various unaffiliated sources, and in particular investors in other private and public companies in our networks. We also believe that our experience, reputation, access to experienced serial scientist-entrepreneurs, and track record in healthcare investing will make us a preferred partner for potential targets. Consistent with our strategy, we intend to see to acquire companies that we believe:
▪
Are harnessing transformative technology and have strong intellectual property;
▪
Have competitive advantage in the markets in which they operate, and which can benefit from access to additional capital as well as our industry relationships and expertise;
▪
Are at an inflection point in their growth trajectory;
▪
Are ready to be public and have experienced management teams with strong corporate governance, reporting, and policies;
▪
Have significant embedded and/or underexploited growth opportunities;
▪
Will offer an attractive risk-adjusted return for our shareholders; and
▪
Will likely be well received by public investors and are expected to have good access to the public capital markets.
These criteria are not intended to be exhaustive and we may use other criteria as well. Any evaluation relating to the merits of a particular initial business combination may be based on these general criteria as well as other considerations, factors and criteria that our management may deem relevant.
Initial Business Combination
Our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account)
at the time of signing the agreement to enter into the initial business combination. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). Even though our board of directors will rely on generally accepted standards, our board of directors will have discretion to select the standards employed. In addition, the application of the standards generally involves a substantial degree of judgment. Accordingly, investors will be relying on the business judgment of the board of directors in evaluating the fair market value of the target or targets. The proxy solicitation materials or tender offer documents used by us in connection with any proposed transaction will provide public shareholders with our analysis of our satisfaction of the 80% of fair market value test, as well as the basis for our determinations. If our board of directors is not able to independently determine the fair market value of the target business or businesses or we are considering an initial business combination with an affiliated entity, we will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm with respect to the satisfaction of such criteria. Our shareholders may not be provided with a copy of such opinion nor will they be able to rely on such opinion. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of fair market value test, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required under applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed transaction will include such opinion.
We anticipate structuring our initial business combination so that the post-business combination company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-business combination company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to the completion of our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-business combination company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of fair market value test. If the business combination involves more than one target business, the 80% of fair market value test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking shareholder approval, as applicable. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
In addition, our sponsor has indicated an interest to purchase up to an aggregate of $25,000,000 of our Class A ordinary shares in a private placement that would occur concurrently with the consummation of our initial business combination. However, because indications of interest are not binding agreements or commitments to purchase, our sponsor may determine not to purchase any such shares, or to purchase fewer shares than it has indicated an interest in purchasing. Furthermore, we are not under any obligation to sell any such shares. If we sell shares to our sponsor (or any other investor) in connection with our initial business
combination, the equity interest of investors in this offering in the combined company may be diluted and the market prices for our securities may be adversely affected. In addition, if the per share trading price of our ordinary shares is greater than the price per share paid in the private placement, the private placement will result in value dilution to you, in addition to the immediate dilution that you will experience in connection with the consummation of this offering. See “Dilution.”
Other Considerations
We are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor or any of our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm that such initial business combination or transaction is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Affiliates of our sponsor and our officers and members of our board of directors may directly or indirectly own founder shares following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers or directors were to be included by a target business as a condition to any agreement with respect to our initial business combination.
We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. Affiliates of our sponsor are continuously made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a business combination transaction with our company. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to identify or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition candidate.
HealthCor and Catalio may manage multiple investment vehicles and raise additional funds and/or successor funds in the future, which may be during the period in which we are seeking our initial business combination. These investment entities may be seeking acquisition opportunities and related financing at any time. We may compete with any one or more of them on any given acquisition opportunity.
Our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our ability to identify and pursue business combination opportunities or to complete our initial business combination.
In addition, certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary and contractual duties to other entities, including, without limitation, to investment funds, accounts, co-investment vehicles and other entities managed by affiliates of our sponsor and certain entities in which such affiliates have invested. As a result, if any of our officers or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations (including, without limitation, funds or other investment vehicles managed by affiliates of our sponsor), then, subject to their fiduciary duties under Cayman Islands law, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. In addition, investment ideas generated within or presented to HealthCor, Catalio or members of our management team may be suitable for both us and a current or future fund, portfolio company or other investment entity of HealthCor or Catalio and, subject to applicable fiduciary duties, will first be directed to such fund, portfolio company or other entity before being directed, if at all,
to us. However, we do not expect these duties to materially affect our ability to identify and pursue business combination opportunities or to complete our initial business combination.
In addition, our officers and directors, are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. Moreover, our officers and directors have, and may have in the future, time and attention requirements for current and future investment funds, accounts, co-investment vehicles and other entities managed by HealthCor or Catalio. To the extent any conflict of interest arises between, on the one hand, us and, on the other hand, such investment funds, accounts, co-investment vehicles and other entities, HealthCor, Catalio and their affiliates, as applicable, will resolve such conflicts in their sole discretion in accordance with their existing fiduciary, contractual and other duties, and there can be no assurance that such conflict of interest will be resolved in our favor.
Unlike other SPAC IPOs, investors in this offering will not receive warrants that would become exercisable following completion of our initial business combination.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination with us. In a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock, shares or other equity interests in the target business for our Class A ordinary shares (or shares of a new holding company) or for a combination of our Class A ordinary shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses will find this method a more expeditious and cost effective method to becoming a public company than the typical initial public offering. The typical initial public offering process takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses in the initial public offering process, including underwriting discounts and commissions, that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriter’s ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring or have negative valuation consequences. Once public, we believe the target business would then have greater access to capital, an additional means of providing management incentives consistent with shareholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank check company, such as our lack of an operating history and our ability to seek shareholder approval of any proposed initial business combination, negatively.
We are an “emerging growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates equals or exceeds $700,000,000 as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates equals or exceeds $250,000,000 as of the prior June 30, and (2) our annual revenues equaled or exceeded $100,000,000 during such completed fiscal year or the market value of our ordinary shares held by non-affiliates equals or exceeds $700,000,000 as of the prior June 30.
Financial Position
With funds available for a business combination initially in the amount of $145,750,000, after payment of the estimated expenses of this offering and $5,250,000 of deferred underwriting fees (or $167,462,500 after payment of the estimated expenses of this offering and $6,037,500 of deferred underwriting fees if the underwriter’s over-allotment option is exercised in full), we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
General
We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial business combination using cash from the proceeds of this offering, the sale of the private placements shares, our equity, debt or a combination of these as the consideration to be paid in our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of this offering or otherwise). We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity or debt, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-business combination company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions with any business combination target. Additionally, we have not engaged or retained any agent or other representative to identify or locate any suitable acquisition candidate, to conduct any research or take any measures, directly or indirectly, to locate or contact a target business, other than our officers and directors. Accordingly, there is no current basis for investors in this offering to evaluate the possible merits or risks of the target business with which we may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely affect a target business.
We may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account, or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. There are no prohibitions on our ability to issue securities or incur debt in connection with our initial business combination. We are not currently a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities, the incurrence of debt or otherwise.
Sources of Target Businesses
Our process of identifying acquisition targets will leverage our founders’ and our management team’s unique industry experiences, proven deal sourcing capabilities and broad and deep network of relationships in numerous industries, including executives and management teams, private equity groups and other institutional investors, large business enterprises, lenders, investment bankers and other investment market participants,
restructuring advisers, consultants, attorneys and accountants, which we believe should provide us with a number of business combination opportunities. We expect that the collective experience, capability and network of our founders, directors and officers, combined with their individual and collective reputations in the investment community, will help to create prospective business combination opportunities.
In addition, we anticipate that target business candidates may be brought to our attention from various unaffiliated sources, including investment bankers and private investment funds. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read this prospectus and know what types of businesses we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates of which they become aware through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions.
While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of a finder’s fee is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor or any of our existing officers or directors, or any entity with which they are affiliated, be paid any finder’s fee, consulting fee or other compensation by the company prior to, or for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is). None of our sponsor, executive officers or directors, or any of their respective affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective business combination target in connection with a contemplated acquisition of such target by us. We have agreed to pay our sponsor a total of up to $10,000 per month for office space, secretarial and administrative support and to reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. Some of our officers and directors may enter into employment or consulting agreements with the post-business combination company following our initial business combination.
We are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with our sponsor, founders, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor or any of our founders, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm that such initial business combination or transaction is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including entities that are affiliates of our sponsor, pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to their fiduciary duties under Cayman Islands law. See “Management — Conflicts of Interest.”
Evaluation of a Target Business and Structuring of Our Initial Business Combination
In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial, operational, legal and other information which will be made available to us. If we determine to move forward with a particular target, we will proceed to structure and negotiate the terms of the business combination transaction.
The time required to identify and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation with, a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination. The company will not pay any consulting fees to members of our management team, or any of their respective affiliates, for services rendered to or in connection with our initial business combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:
▪
subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and
▪
cause us to depend on the marketing and sale of a single product or limited number of products or services.
Limited Ability to Evaluate the Target’s Management Team
Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Shareholders May Not Have the Ability to Approve Our Initial Business Combination
We may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum and articles of association. However, we will seek shareholder approval if it is required by applicable law or stock exchange rule, or we may decide to seek shareholder approval for business or other reasons.
Under Nasdaq’s listing rules, shareholder approval would be required for our initial business combination if, for example:
▪
we issue (other than in a public offering for cash) ordinary shares that will either (a) be equal to or in excess of 20% of the number of ordinary shares then issued and outstanding or (b) have voting power equal to or in excess of 20% of the voting power then issued and outstanding;
▪
any of our directors, officers or substantial shareholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of ordinary shares could result in an increase in outstanding ordinary shares or voting power of 5% or more; or
▪
the issuance or potential issuance of ordinary shares will result in our undergoing a change of control.
The Companies Act and Cayman Islands law do not currently require, and we are not aware of any other applicable law that will require, shareholder approval of our initial business combination.
The decision as to whether we will seek shareholder approval of a proposed business combination in those instances in which shareholder approval is not required by law will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a variety of factors, including, but not limited to:
▪
the timing of the transaction, including in the event we determine shareholder approval would require additional time and there is either not enough time to seek shareholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;
▪
the expected cost of holding a shareholder vote;
▪
the risk that the shareholders would fail to approve the proposed business combination;
▪
other time and budget constraints of the company; and
▪
additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to shareholders.
Permitted Purchases and Other Transactions with Respect to Our Securities
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, executive officers, advisors or their affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase public shares in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.
In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling shareholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules.
The purpose of any such transactions could be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our Class A ordinary shares may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors and/or their affiliates anticipate that they may identify the shareholders with whom our sponsor, officers, directors or their affiliates may pursue privately negotiated transactions by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of Class A ordinary shares) following our mailing of tender offer or proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private transaction, they would identify and contact only potential selling or redeeming shareholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such shareholder has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the general meeting related to our initial business combination. Our sponsor, executive officers, directors, advisors or their affiliates will select which shareholders to purchase shares from based on the negotiated price and number of shares and any other factors that they may deem relevant, and will be restricted from purchasing shares if such purchases do not comply with Regulation M under the Exchange Act and the other federal securities laws.
Our sponsor, officers, directors and/or their affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. We expect any such purchases would be reported by such person pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
Redemption Rights for Public Shareholders upon Completion of Our Initial Business Combination
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriter. The redemption rights may include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Our sponsor and our management team have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, the private placement shares and any public shares purchased during or after this offering in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity.
Limitations on Redemptions
Our amended and restated memorandum and articles of association provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). However, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof.
Manner of Conducting Redemptions
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either (i) in connection with a general
meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would typically require shareholder approval. We currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange rule or we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons.
If we held a shareholder vote to approve our initial business combination, we will, pursuant to our amended and restated memorandum and articles of association:
▪
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
▪
file proxy materials with the SEC.
In the event that we seek shareholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders with the redemption rights described above upon completion of the initial business combination.
If we seek shareholder approval, we will complete our initial business combination only if a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a general meeting are voted in favor of the business combination. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares and the private placement shares, we would need 5,375,001, or 35.8% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), or 562,501 or 3.75% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 15,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all. In addition, our sponsor and our management team have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, the private placement shares and any public shares purchased during or after this offering in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
▪
conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
▪
file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our initial business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase Class A ordinary shares in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than the number of public shares we are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
Limitation on Redemption upon Completion of Our Initial Business Combination If We Seek Shareholder Approval
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares, without our prior consent. We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us, our sponsor or our management team at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the shares sold in this offering without our prior consent, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering Share Certificates in Connection with a Tender Offer or Redemption Rights
Public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” will be required to either tender their certificates (if any) to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials, as applicable, mailed to such holders, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/ Withdrawal At Custodian) System, at the holder’s option, in each case up to two business days prior to the initially scheduled vote to approve the business combination. The proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate the applicable delivery requirements, which may include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Accordingly, a public shareholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the initially scheduled vote on the proposal to approve the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short period in which to exercise redemption rights, it is advisable for shareholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced 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 a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the shareholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was approved, the
company would contact such shareholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the shareholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of the company’s shares in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which shareholders were aware they needed to commit before the general meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming shareholder’s election to redeem is irrevocable once the business combination is approved.
Any request to redeem such shares, once made, may be withdrawn at any time up to two business days prior to the initially scheduled vote on the proposal to approve the business combination, unless otherwise agreed to by us. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until 24 months from the closing of this offering.
Redemption of Public Shares and Liquidation If No Initial Business Combination
Our amended and restated memorandum and articles of association will provide that we will have only 24 months from the closing of this offering to consummate an initial business combination. If we do not consummate an initial business combination within 24 months from the closing of this offering, we 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 the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering).
Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of
our Class A ordinary shares or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset requirement, we would not proceed with the amendment or the related redemption of our public shares at such time. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, any executive officer, director or director nominee, or any other person.
We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the $1,000,000 of proceeds held outside the trust account plus up to $100,000 of funds from the trust account available to us to pay dissolution expenses, although we cannot assure you that there will be sufficient funds for such purpose.
If we were to expend all of the net proceeds of this offering and the sale of the private placement shares, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by shareholders upon our dissolution would be $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption amount received by shareholders will not be less than $10.00. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers (excluding our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. The underwriter will not execute agreements with us waiving such claims to the monies held in the trust account. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriter of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified
whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Our sponsor may not be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00 per public share.
We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (excluding our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriter of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to $1,000,000 from the proceeds of this offering and the sale of the private placement shares with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, shareholders who received funds from our trust account could be liable for claims made by creditors; however such liability will not be greater than the amount of funds from our trust account received by any such shareholder. In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
If we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the trust account, we cannot assure you we will be able to return $10.00 per public share to our public shareholders. Additionally, if we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.”
As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public shareholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public shares if we do not consummate an initial business combination within 24 months from the closing of this offering, (ii) in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating
to the rights of holders of our Class A ordinary shares or pre-initial business combination activity, and (iii) if they redeem their respective shares for cash upon the completion of the initial business combination. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination within 24 months from the closing of this offering, with respect to such Class A ordinary shares so redeemed. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. In the event we seek shareholder approval in connection with our initial business combination, a shareholder’s voting in connection with the business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such shareholder must have also exercised its redemption rights described above. These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote.
Comparison of Redemption or Purchase Prices in Connection with Our Initial Business Combination and If We Fail to Complete Our Initial Business Combination.
The following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion of our initial business combination and if we do not consummate an initial business combination within 24 months from the closing of this offering.
| |
|
|
REDEMPTIONS IN CONNECTION
WITH OUR INITIAL BUSINESS
COMBINATION
|
|
|
OTHER PERMITTED PURCHASES
OF PUBLIC SHARES BY OUR
AFFILIATES
|
|
|
REDEMPTIONS IF WE FAIL TO
COMPLETE AN INITIAL
BUSINESS COMBINATION
|
|
|
Calculation of redemption price
|
|
|
Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a shareholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a shareholder vote. In either case, our public shareholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.00 per share), including interest earned on the funds held in the trust account and not previously released to us
|
|
|
If we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following completion of our initial business combination. There is no limit to the prices that our sponsor, directors, officers, advisors or their affiliates may pay in these transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate
|
|
|
If we do not consummate an initial business combination within 24 months from the closing of this offering, we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount, then on deposit in the trust account (which is initially anticipated to be $10.00 per share), including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares.
|
|
| |
|
|
REDEMPTIONS IN CONNECTION
WITH OUR INITIAL BUSINESS
COMBINATION
|
|
|
OTHER PERMITTED PURCHASES
OF PUBLIC SHARES BY OUR
AFFILIATES
|
|
|
REDEMPTIONS IF WE FAIL TO
COMPLETE AN INITIAL
BUSINESS COMBINATION
|
|
| |
|
|
to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001 and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination.
|
|
|
that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules
|
|
|
|
|
|
Impact to remaining shareholders
|
|
|
The redemptions in connection with our initial business combination will reduce the book value per share for our remaining shareholders, who will bear the burden of the deferred underwriting commissions and taxes payable.
|
|
|
If the permitted purchases described above are made, there would be no impact to our remaining shareholders because the purchase price would not be paid by us.
|
|
|
The redemption of our public shares if we fail to complete our initial business combination will reduce the book value per share for the shares held by our sponsor, who will be our only remaining shareholder after such redemptions
|
|
Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419
The following table compares the terms of this offering to the terms of an offering by a blank check company subject to the provisions of Rule 419. This comparison assumes that the gross proceeds, underwriting commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company subject to Rule 419, and that the underwriter will not exercise its over-allotment option. None of the provisions of Rule 419 apply to our offering.
| |
|
|
TERMS OF OUR OFFERING
|
|
|
TERMS UNDER A RULE 419 OFFERING
|
|
|
Escrow of offering proceeds
|
|
|
$150,000,000 of the net proceeds of this offering and the sale of the private placement shares will be deposited into a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee.
|
|
|
Approximately $127,575,000 of the offering proceeds would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account.
|
|
| |
|
|
TERMS OF OUR OFFERING
|
|
|
TERMS UNDER A RULE 419 OFFERING
|
|
|
Investment of net proceeds
|
|
|
$150,000,000 of the net proceeds of this offering and the sale of the private placement shares held in trust will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.
|
|
|
Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States.
|
|
|
Receipt of interest on escrowed funds
|
|
|
Interest income (if any) on proceeds from the trust account to be paid to shareholders is reduced by (i) any income taxes paid or payable and (ii) in the event of our liquidation for failure to complete our initial business combination within the allotted time, up to $100,000 of net interest that may be released to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation.
|
|
|
Interest income on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination.
|
|
|
Limitation on fair value or net assets of target business
|
|
|
Our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account) at the time of signing the agreement to enter into the initial business combination.
|
|
|
The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds.
|
|
|
Trading of securities issued
|
|
|
The public shares are expected to begin trading on or promptly after the date of this prospectus.
|
|
|
No trading of the Class A ordinary shares would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.
|
|
|
Election to remain an investor
|
|
|
We will provide our public shareholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account
|
|
|
A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of a post-effective amendment to the company’s
|
|
| |
|
|
TERMS OF OUR OFFERING
|
|
|
TERMS UNDER A RULE 419 OFFERING
|
|
| |
|
|
and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, upon the completion of our initial business combination, subject to the limitations described herein. We may not be required by applicable law or stock exchange rule to hold a shareholder vote. If we are not required by applicable law or stock exchange rule and do not otherwise decide to hold a shareholder vote, we will, pursuant to our amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offerdocuments with the SEC which will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, we hold a shareholder vote, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek shareholder approval, we will complete our initial business combination only if a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a general meeting are voted in favor of the business combination. Additionally, each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all. Our amended and restated memorandum and articles of association will require that at least five days’ notice will be given of any such general meeting.
|
|
|
registration statement, to decide if he, she or it elects to remain a shareholder of the company or require the return of his, her or its investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the shareholder. Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities are issued.
|
|
|
Business combination deadline
|
|
|
If we do not consummate an initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than
|
|
|
If an acquisition has not been completed within 18 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors.
|
|
| |
|
|
TERMS OF OUR OFFERING
|
|
|
TERMS UNDER A RULE 419 OFFERING
|
|
| |
|
|
ten business days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
|
|
|
|
|
|
Release of funds
|
|
|
Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our income taxes, if any, until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we have not consummated an initial business combination within 24 months from the closing of this offering, subject to applicable law and (iii) the redemption of our public shares properly submitted in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any
|
|
|
The proceeds held in the escrow account are not released until the earlier of the completion of a business combination and the failure to effect a business combination within the allotted time.
|
|
| |
|
|
TERMS OF OUR OFFERING
|
|
|
TERMS UNDER A RULE 419 OFFERING
|
|
| |
|
|
other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity. Based on current interest rates, we expect that interest income earned on the trust account (if any) will be sufficient to pay our income taxes.
|
|
|
|
|
Competition
In identifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies, operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our public shareholders who properly exercise their redemption rights may reduce the resources available to us for our initial business combination, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
We currently maintain our executive offices at 55 Hudson Yards, 28th Floor, New York, New York 10001. The cost for our use of this space is included in the up to $10,000 per month fee we will pay to our sponsor for office space, administrative and support services. We consider our current office space adequate for our current operations.
Employees
We currently have two executive officers. These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the stage of the business combination process we are in. We do not intend to have any full time employees prior to the completion of our initial business combination.
Periodic Reporting and Financial Information
We will register our Class A ordinary shares under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public accountants.
We will provide shareholders with audited financial statements of the prospective target business as part of the proxy solicitation or tender offer materials, as applicable, sent to shareholders. These financial statements may be required to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within 24 months from the closing of this offering. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have financial statements prepared in accordance with the requirements outlined above, or that the potential target business will be able to prepare
its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2021 as required by the Sarbanes-Oxley Act. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company would we be required to comply with the independent registered public accounting firm attestation requirement on internal control over financial reporting. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We are a Cayman Islands exempted company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we have applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (2018 Revision) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates equals or exceeds $700,000,000 as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates
equals or exceeds $250,000,000 as of the prior June 30, and (2) our annual revenues equaled or exceeded $100,000,000 during such completed fiscal year or the market value of our ordinary shares held by non-affiliates equals or exceeds $700,000,000 as of the prior June 30.
Legal Proceedings
There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
MANAGEMENT
Officers, Directors and Director Nominees
Our officers, directors and director nominees are as follows:
|
Name
|
|
|
Age
|
|
|
Position
|
|
|
Christopher Gaulin
|
|
|
|
|
45 |
|
|
|
Chief Executive Officer and Director
|
|
|
Christine Clarke
|
|
|
|
|
42 |
|
|
|
Chief Financial Officer
|
|
|
George Petrocheilos
|
|
|
|
|
29 |
|
|
|
President
|
|
|
Joseph Healey
|
|
|
|
|
54 |
|
|
|
Director (Chairman)
|
|
|
Avi Horev
|
|
|
|
|
46 |
|
|
|
Director Nominee
|
|
|
Dr. Kenan Turnacioglu
|
|
|
|
|
50 |
|
|
|
Director Nominee
|
|
|
Michael Weinstein
|
|
|
|
|
50 |
|
|
|
Director Nominee
|
|
|
Dr. Christopher Wolfgang
|
|
|
|
|
54 |
|
|
|
Director Nominee
|
|
|
Taylor Harris
|
|
|
|
|
44 |
|
|
|
Director Nominee
|
|
Christopher Gaulin serves as our Chief Executive Officer and is a member of our board of directors. Mr. Gaulin is a Portfolio Manager at HealthCor. Mr. Gaulin joined HealthCor in 2018 from Soros Fund Management where he managed the firm’s healthcare equity investments. Prior to Soros, Mr. Gaulin spent 14 years at Maverick Capital, most recently as Healthcare Sector Head. As Healthcare Sector Head, Mr. Gaulin was responsible for managing the firm’s multi-billion healthcare equity portfolio and served as a member of Maverick’s Stock Committee and Advisory Committee. Prior to leading the healthcare team at Maverick, Mr. Gaulin ran the firm’s small cap portfolio for three years. Mr. Gaulin joined Maverick in 2003 as a Senior Analyst covering the consumer and business services sectors. Prior to Maverick, Mr. Gaulin was a Senior Analyst at JP Morgan. Mr. Gaulin graduated with a B.S. in Finance from Boston College in 1997. We believe that Mr. Gaulin’s transactional and investing experience in the healthcare industry make him well qualified to serve on our board of directors.
Christine Clarke, CPA, serves as our Chief Financial Officer. Ms. Clarke joined HealthCor in 2006 and has served as the Chief Financial Officer since 2007. Ms. Clarke’s responsibilities include accounting, operational, and human resources and she serves on the Executive, Valuation, Compliance, Expense, Best Execution, and Risk Committees. Prior to joining HealthCor, Ms. Clarke was the Controller at Narragansett Management, L.P. from 2004 to 2006. From 2000 until 2004, Ms. Clarke was an Assurance Senior Associate at PricewaterhouseCoopers, LLP where she conducted audits of investment management clients. Ms. Clarke received a B.S. in Accounting from Fordham University in 2000 and is also a Certified Public Accountant.
George Petrocheilos serves as our President. Mr. Petrocheilos is the Co-Founder and Co-Managing Partner of Catalio. Prior to Catalio, Mr. Petrocheilos was a General Partner at Camden Partners from 2014 through 2020, where he created and co-managed the Nexus life sciences strategy with Dr. Jacob Vogelstein. Mr. Petrocheilos currently serves on the Boards of several private biotechnology companies, including MindX Corp., Spiral Therapeutics, WindMIL Therapeutics, Sisu Global, and LifeSprout Bio. Mr. Petrocheilos also serves on the Board of Trustees of Kennedy Kreiger Institute, a Johns Hopkins Medicine affiliate. Mr. Petrocheilos graduated from Johns Hopkins University in 2013 with a B.A. in Financial Economics.
Joseph Healey is the chairman of our board of directors. Mr. Healey is a Co-Founder and Portfolio Manager of HealthCor. Prior to HealthCor, Mr. Healey was a Portfolio Manager at SAC from January 2000 through March 2005. Prior to SAC, from 1997 to 2000, Mr. Healey was a health care Portfolio Manager at Kingdon Capital Management, and from 1992 until 1997 he was an Analyst and Portfolio Manager at Dreyfus Corporation. Mr. Healey also served as a First Lieutenant in the U.S. Army Medical Service Corp at the Walter Reed Army Medical Center from 1988 to 1992. Mr. Healey graduated from Boston University in 1988 with a B.A. in Biomedical Engineering and received his M.S. in Technology Management from the University of Maryland in 1993. Mr. Healey became a Chartered Financial Analyst (CFA) in 1996. We believe that Mr. Healey’s healthcare industry and leadership experience make him well qualified to serve on our board of directors.
Avi Horev will become a member of our board of directors upon the closing of this offering. Mr. Horev is a Senior Partner and Portfolio Manager of HealthCor. Mr. Horev joined HealthCor at the time of its launch in 2005. From 2003 to 2005, Mr. Horev worked with Art Cohen and Mr. Healey’s team as a medical device research analyst at SAC. Prior to working at SAC, Mr. Horev was a health care equity research analyst at JP Morgan from 1997 to 2003. Mr. Horev graduated with a B.S. in Finance from Lehigh University in 1997. We believe that Mr. Horev’s finance and investing experience in the healthcare industry make him well qualified to serve on our board of directors.
Taylor Harris will become a member of our board of directors upon the closing of this offering. Mr. Harris served as the Chief Financial Officer for MyoKardia, Inc., from April 2018 until that company's acquisition by Bristol Myers Squibb in November 2020. At Myokardia, Mr. Harris led the finance, accounting, information technology, facilities, quality, corporate communications and investor relations functions. Previously, Mr. Harris served as Senior Vice President and Chief Financial Officer of Zeltiq Aesthetics, Inc., until that company’s acquisition by Allergan plc. During that time, he was responsible for global finance, accounting, tax, treasury, investor relations, and information technology functions, as well as the company’s commercial operations, including customer service, product support, and inside sales. Prior to Zeltiq, Mr. Harris served as Vice President and Chief Financial Officer at Thoratec Corporation (acquired by St. Jude Medical, Inc.). Prior to joining Thoratec, Mr. Harris worked at JPMorgan Chase & Co. for over a decade in several capacities, including as a Vice President in the firm’s Healthcare Investment Banking and Equity Research departments. Mr. Harris holds a Bachelor of Arts in Physics and Economics from the University of North Carolina at Chapel Hill, where he studied as a Morehead-Cain Scholar. We believe that Mr. Harris's finance, accounting and operations experience makes him well qualified to serve on our board of directors.
Dr. Kenan Turnacioglu will become a member of our board of directors upon the closing of this offering. Dr. Turnacioglu is a General Partner at Catalio, where he also serves on the Investment Committee. Dr. Turnacioglu is also the Chairman of PaigeAI, a machine learning pathology company spun out of Memorial Sloan Kettering. In 2011, Dr. Turnacioglu co-founded PointState Capital, LP and managed the portfolios and investment teams in Healthcare and Consumer sectors, before departing in 2018. From 2001 to 2010, Dr. Turnacioglu worked at Duquesne Capital Management, LLC managing healthcare investments. While at these positions, Dr. Turnacioglu also served on the boards of StemCentrx from 2013 to 2016, Agensys from 2004 to 2007, and NYU Langone Cancer Center from 2010 to 2015. From 1998 to 2000, Dr. Turnacioglu worked at Credit Suisse as an analyst on the biotech team. Dr. Turnacioglu earned a B.A. from Rutgers University, and a Ph.D from the University of Pennsylvania, before becoming a Post-Doctoral Fellow at Johns Hopkins University. We believe that Dr. Turnacioglu’s finance and investing experience, as well as his experience on various boards of directors, make him well qualified to serve on our board of directors.
Michael Weinstein will become a member of our board of directors upon the closing of this offering. Mr. Weinstein is Senior Vice President, Strategy and a member of the Executive Committee at Medtronic PLC, one of the world’s leading medical technology companies. In this role, Mr. Weinstein oversees global strategy for Medtronic, including providing counsel and input on business development, capital deployment, and the overall strategic direction of Medtronic’s businesses. Prior to joining Medtronic, Mr. Weinstein spent 25 years at J.P. Morgan & Co., where as a Managing Director he led the firm’s Healthcare group within Equity Research. Mr. Weinstein joined J.P. Morgan in 1992 and was the firm’s senior medical technology analyst from 1995 to 2018. Mr. Weinstein is a 14-time #1 ranked analyst in the annual surveys of both Institutional Investor and Greenwich Associates. In 2013, he was named to the Institutional Investor Hall of Fame. Mr. Weinstein received his bachelor’s degree in International Management from Georgetown University. We believe that Mr. Weinstein’s healthcare industry and public company leadership experience make him well qualified to serve on our board of directors.
Dr. Christopher Wolfgang will become a member of our board of directors upon the closing of this offering. Christopher Wolfgang MD, PhD is the John L. Cameron Professor of Surgery and the Chief of Pancreatic Surgery at Johns Hopkins Medicine. Dr. Wolfgang holds additional appointments including a Professor of Pathology and Oncology at the Johns Hopkins School of Medicine. Dr. Wolfgang was elected into both the Miller-Coulson Academy of Clinical Excellence and the Distinguished Teaching Society of the Johns Hopkins School of Medicine. Dr. Wolfgang is recognized as one of the world’s leading experts and thought leaders in pancreatic cancer clinical care and basic research. Dr. Wolfgang is one of the most experienced pancreatic surgeons world-wide, personally having performed over 1200 Whipple operations. Dr. Wolfgang is considered one of the
go-to surgeons for pancreatic cancer with vascular involvement and has led his group in pushing the envelope for vascular reconstruction as part of pancreatic cancer resection and in resecting pancreatic cancer metastatic to the liver. In addition to his clinical activity, Dr. Wolfgang runs a research program focused on the understanding of metastatic spread — the most important reason for treatment failure following tumor removal. Dr. Wolfgang has published over 400 peer-reviewed research articles and has a Google Scholar H-index of 97 with over 40,000 citations of his work. Dr. Wolfgang graduated from Temple University School of Medicine in 1998 with a combined MD and PhD degree (biochemistry). In January 2020, Dr. Wolfgang assumed the role of Chief of Pancreatic Surgery at NYU Langone in Manhattan, New York. We believe that Dr. Wolfgang’s healthcare industry and leadership experience make him well qualified to serve on our board of directors.
Number and Terms of Office of Officers and Directors
Our board of directors is divided into three classes, with only one class of directors being elected in each year, and with each class (except for those directors appointed prior to our first annual general meeting) serving a three-year term. The term of office of the first class of directors, consisting of Dr. Turnacioglu and Dr. Wolfgang, will expire at our first annual general meeting. The term of office of the second class of directors, consisting of Messrs. Harris, Horev and Weinstein, will expire at our second annual general meeting. The term of office of the third class of directors, consisting of Messrs. Gaulin and Healey, will expire at our third annual general meeting.
Prior to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders of a majority of our founder shares. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
Pursuant to an agreement to be entered into on or prior to the closing of this offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for election to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement.
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our amended and restated memorandum and articles of association as it deems appropriate. Our amended and restated memorandum and articles of association will provide that our officers may consist of one or more chairman of the board, chief executive officer, president, chief financial officer, vice presidents, secretary, treasurer and such other offices as may be determined by the board of directors.
Director Independence
Nasdaq listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship with the company which in the opinion of the company’s board of directors, could interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Upon the effectiveness of the registration statement of which this prospectus forms a part, we expect to have a majority of “independent directors” as defined in Nasdaq’s listing standards and applicable SEC rules. Our board of directors has determined that Taylor Harris, Mike Weinstein, Dr. Kenan Turnacioglu and Dr. Christopher Wolfgang are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.
Executive Officer and Director Compensation
None of our executive officers or directors have received any cash compensation for services rendered to us. Commencing on the date that our securities are first listed on the Nasdaq through the earlier of consummation of our initial business combination and our liquidation, we will reimburse our sponsor for office space, secretarial and administrative services provided to us in the amount of up to $10,000 per month. In addition, our sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, executive officers or directors,
or our or their affiliates. Any such payments prior to an initial business combination will be made using funds held outside the trust account. Other than quarterly audit committee review of such reimbursements, we do not expect to have any additional controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, will be paid by the company to our sponsor, executive officers and directors, or any of their respective affiliates, prior to completion of our initial business combination.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the proxy solicitation materials or tender offer materials furnished to our shareholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our executive officers and directors may negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment.
Committees of the Board of Directors
Upon the effectiveness of the registration statement of which this prospectus forms a part, our board of directors will have three standing committees: an audit committee, a nominating committee and a compensation committee. Subject to phase-in rules and a limited exception, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception, the rules of Nasdaq require that the compensation committee of a listed company be comprised solely of independent directors. Each committee will operate under a charter that has been approved by our board and will have the composition and responsibilities described below. The charter of each committee will be available on our website.
Audit Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish an audit committee of the board of directors. Taylor Harris, Michael Weinstein and Dr. Christopher Wolfgang will serve as members of our audit committee. Taylor Harris will serve as the Chairman of the audit committee. Each member of the audit committee meets the financial literacy requirements of Nasdaq and our board of directors has determined that Taylor Harris qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise.
The audit committee is responsible for:
▪
meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems;
▪
monitoring the independence of the independent registered public accounting firm;
▪
verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;
▪
inquiring and discussing with management our compliance with applicable laws and regulations;
▪
pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed;
▪
appointing or replacing the independent registered public accounting firm;
▪
determining the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;
▪
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies;
▪
monitoring compliance on a quarterly basis with the terms of this offering and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance with the terms of this offering; and
▪
reviewing and approving all payments made to our existing shareholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval.
Nominating Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a nominating committee of our board of directors. The members of our nominating committee will be Taylor Harris, Michael Weinstein and Dr. Christopher Wolfgang, and Taylor Harris will serve as chairman of the nominating committee.
The nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. The nominating committee considers persons identified by its members, management, shareholders, investment bankers and others.
Guidelines for Selecting Director Nominees
The guidelines for selecting nominees, which will be specified in a charter to be adopted by us, generally provide that persons to be nominated:
▪
should have demonstrated notable or significant achievements in business, education or public service;
▪
should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and
▪
should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders.
The nominating committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The nominating committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The nominating committee does not distinguish among nominees recommended by shareholders and other persons.
Compensation Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a compensation committee of our board of directors. The members of our compensation committee will be Taylor Harris, Michael Weinstein and Dr. Christopher Wolfgang, and Taylor Harris will serve as chairman of the compensation committee.
We will adopt a compensation committee charter, which will detail the principal functions of the compensation committee, including:
▪
reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such
goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;
▪
reviewing and approving the compensation of all of our other Section 16 executive officers;
▪
reviewing our executive compensation policies and plans;
▪
implementing and administering our incentive compensation equity-based remuneration plans;
▪
assisting management in complying with our proxy statement and annual report disclosure requirements;
▪
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;
▪
producing a report on executive compensation to be included in our annual proxy statement; and
▪
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
The charter will also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Compensation Committee Interlocks and Insider Participation
None of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving on our board of directors.
Code of Ethics
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will have adopted a Code of Ethics applicable to our directors, officers and employees. A copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Conflicts of Interest
Under Cayman Islands law, directors and officers owe the following fiduciary duties:
▪
duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;
▪
duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
▪
directors should not improperly fetter the exercise of future discretion;
▪
duty to exercise powers fairly as between different sections of shareholders;
▪
duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and
▪
duty to exercise independent judgment.
In addition to the above, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge skill and experience of that director.
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the amended and restated memorandum and articles of association or alternatively by shareholder approval at general meetings.
Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including entities that are affiliates of our sponsor, pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to their fiduciary duties under Cayman Islands law. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to identify and pursue business combination opportunities or to complete our initial business combination.
Below is a table summarizing the entities to which our executive officers and directors currently have fiduciary duties, contractual obligations or other material management relationships:
|
INDIVIDUAL
|
|
|
ENTITY
|
|
|
ENTITY’S BUSINESS
|
|
|
AFFILIATION
|
|
|
Christopher Gaulin
|
|
|
HealthCor Management, L.P.
|
|
|
Investment Adviser
|
|
|
Portfolio Manager and Partner
|
|
|
Christine Clarke
|
|
|
HealthCor Management, L.P.
|
|
|
Investment Adviser
|
|
|
Chief Financial Officer
|
|
|
George Petrocheilos
|
|
|
Catalio Capital Management, LP
|
|
|
Venture Capital
|
|
|
Co-Founder and Co-Managing Partner
|
|
| |
|
|
MindX Corp.
Spiral Therapeutics
WindMIL Therapeutics
Sisu Global
LifeSprout Bio
Kennedy Kreiger Institute
|
|
|
Biotechnology
Biotechnology
Biotechnology
Biotechnology
Biotechnology
Medicine
|
|
|
Board Member
Board Member
Board Member
Board Member
Board Member
Board Member
|
|
|
Joseph Healey
|
|
|
HealthCor Management, L.P.
|
|
|
Investment Adviser
|
|
|
Co-Founder and Portfolio Manager
|
|
| |
|
|
HealthCor Partners Management, L.P.
|
|
|
Investment Adviser
|
|
|
Investment Committee Member
|
|
|
Taylor Harris
|
|
|
Procept Biorobotics
|
|
|
Medical Technology
|
|
|
Director
|
|
| |
|
|
Endologix
|
|
|
Medical Technology
|
|
|
Director
|
|
|
Avi Horev
|
|
|
HealthCor Management, L.P.
|
|
|
Investment Adviser
|
|
|
Senior Partner and Portfolio Manager
|
|
|
Dr. Kenan Turnacioglu
|
|
|
Catalio Capital Management, LP
PaigeAI
|
|
|
Venture Capital
Machine Learning
|
|
|
Investment Committee Member
Chairman
|
|
|
Michael Weinstein
|
|
|
Medtronic PLC
|
|
|
Medical Technology
|
|
|
Senior Vice President
|
|
|
Dr. Christopher Wolfgang
|
|
|
Johns Hopkins School of Medicine
|
|
|
Medicine/Education
|
|
|
Professor of Surgery; Chief of Pancreatic Surgery; Professor of Pathology and Oncology.
|
|
| |
|
|
NYU Langone Health
|
|
|
Medicine/Education
|
|
|
Chief of Pancreatic Surgery
|
|
Potential investors should also be aware of the following other potential conflicts of interest:
▪
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial
compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs.
▪
Our sponsor subscribed for founder shares prior to the date of this prospectus and will purchase private placement shares in a transaction that will close simultaneously with the closing of this offering. Our sponsor and our management team have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, the private placement shares and any public shares purchased during or after this offering in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity. Additionally, our sponsor has agreed to waive its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to complete our initial business combination within the required time period. If we do not complete our initial business combination within the required time period, the private placement shares will be worthless. Except as described herein, our sponsor and our management team have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property. With certain limited exceptions, the private placement shares will not be transferable until 30 days following the completion of our initial business combination. Because each of our executive officers and director nominees will own ordinary shares directly or indirectly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
▪
Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
We are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with our sponsor, founders, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor or any of our founders, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm that such initial business combination or transaction is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context. Furthermore, in no event will our sponsor or any of our existing officers or directors, or any of their respective affiliates, be paid by us any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination. Further, commencing on the date our securities are first listed on the Nasdaq, we will also reimburse our sponsor for office space, secretarial and administrative services provided to us in the amount of up to $10,000 per month.
We cannot assure you that any of the above mentioned conflicts will be resolved in our favor.
If we seek shareholder approval, we will complete our initial business combination only if a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a general meeting are voted in favor of the business combination. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and public shares purchased during or after this offering in favor of our initial business combination.
Limitation on Liability and Indemnification of Officers and Directors
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association will provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We will enter into agreements with our directors and officers to provide contractual indemnification in addition to the indemnification provided for in our amended and restated memorandum and articles of association. We expect to purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
Our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.
Our indemnification obligations may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
PRINCIPAL SHAREHOLDERS
The following table sets forth information regarding the beneficial ownership of our ordinary shares as of the date of this prospectus, and as adjusted to reflect the sale of our Class A ordinary shares offered by this prospectus, and assuming no purchase of public shares in this offering, by:
▪
each person known by us to be the beneficial owner of more than 5% of our issued and outstanding ordinary shares;
▪
each of our executive officers, directors and director nominees that beneficially owns ordinary shares; and
▪
all our executive officers and directors as a group.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all of our ordinary shares beneficially owned by them.
On November 24, 2020, we issued to our sponsor 4,312,500 founder shares (up to 562,500 of which are subject to forfeiture depending on the extent to which the underwriter’s over-allotment option is exercised) in exchange for a capital contribution of $25,000, or approximately $0.006 per share. In addition, our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 500,000 private placement shares, at a price of $10.00 per share ($5,000,000 in the aggregate) in a private placement that will occur simultaneously with the closing of this offering (assuming the underwriter does not exercise its over-allotment option). Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. In December 2020, our sponsor transferred 35,000 Class B ordinary shares to each of Dr. Wolfgang and Mr. Weinstein for their service as independent directors. In January 2021, our sponsor transferred 35,000 Class B ordinary shares to Mr. Harris for his service as an independent director. These 105,000 founder shares are not subject to forfeiture in the event the underwriter's over-allotment option is not exercised. The per share price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued. The number of shares beneficially owned and post-offering percentages in the following table assume that the underwriter does not exercise its over-allotment option and that there are 19,250,000 ordinary shares, consisting of (i) 15,000,000 public Class A ordinary shares, (ii) 3,750,000 Class B ordinary shares and (iii) 500,000 private placement shares, issued and outstanding after this offering.
| |
|
|
NUMBER OF SHARES
BENEFICIALLY
OWNED(2)
|
|
|
APPROXIMATE
PERCENTAGE OF
OUTSTANDING
ORDINARY SHARES
|
|
|
NAME AND ADDRESS OF BENEFICIAL OWNER(1)
|
|
|
BEFORE
OFFERING
|
|
|
AFTER
OFFERING
|
|
|
HC Sponsor LLC (our sponsor)
|
|
|
|
|
4,145,000(3)(4) |
|
|
|
|
|
97.5% |
|
|
|
|
|
21.5% |
|
|
|
Christopher Gaulin
|
|
|
|
|
— |
|
|
|
|
|
—% |
|
|
|
|
|
—% |
|
|
|
Christine Clarke
|
|
|
|
|
— |
|
|
|
|
|
—% |
|
|
|
|
|
—% |
|
|
|
George Petrocheilos
|
|
|
|
|
— |
|
|
|
|
|
—% |
|
|
|
|
|
—% |
|
|
|
Joseph Healey
|
|
|
|
|
4,145,000(3)(4) |
|
|
|
|
|
97.5% |
|
|
|
|
|
21.5% |
|
|
|
Avi Horev
|
|
|
|
|
— |
|
|
|
|
|
—% |
|
|
|
|
|
—% |
|
|
|
Dr. Kenan Turnacioglu
|
|
|
|
|
— |
|
|
|
|
|
—% |
|
|
|
|
|
—% |
|
|
|
Michael Weinstein
|
|
|
|
|
35,000 |
|
|
|
|
|
* |
|
|
|
|
|
* |
|
|
|
Dr. Christopher Wolfgang
|
|
|
|
|
35,000 |
|
|
|
|
|
* |
|
|
|
|
|
* |
|
|
|
Taylor Harris
|
|
|
|
|
35,000 |
|
|
|
|
|
* |
|
|
|
|
|
* |
|
|
|
All officers, directors and director nominees as a group (9 individuals)
|
|
|
|
|
4,250,000 |
|
|
|
|
|
100% |
|
|
|
|
|
22.1% |
|
|
*
Less than one percent
(1)
Unless otherwise noted, the business address of each of the following entities or individuals is 55 Hudson Yards, 28th Floor, New York, New York 10001.
(2)
Interests shown consist solely of founder shares, classified as Class B ordinary shares, and private placement shares. The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of our initial business combination as described in the section entitled “Description of Securities.”
(3)
The shares reported above are held in the name of our sponsor. Our sponsor is managed by its manager, HealthCor Sponsor Investments LLC (“HealthCor Investments”), which is managed by its manager, HealthCor Group, LLC (“HealthCor LLC”). Arthur Cohen and Joseph Healey are the controlling members of HealthCor LLC. As such, Messrs. Cohen and Healey have voting and investment discretion with respect to the Class B ordinary shares held of record by our sponsor and may be deemed to have shared beneficial ownership of the Class B ordinary shares held directly by our sponsor.
(4)
Includes 500,000 private placement shares.
Immediately after this offering, our initial shareholders will beneficially own 20% of the then issued and outstanding ordinary shares (excluding the private placement shares and assuming they do not purchase any shares in this offering) and will have the right to appoint all of our directors prior to the completion of our initial business combination. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial shareholders (and their permitted transferees, if any) at 20% of the issued and outstanding ordinary shares (excluding the private placement shares) upon the consummation of this offering. Holders of our public shares will not have the right to appoint any directors to our board of directors prior to the completion of our initial business combination. Because of this ownership block, our initial shareholders may be able to effectively influence the outcome of all other matters requiring approval by our shareholders, including amendments to our amended and restated memorandum and articles of association and approval of significant corporate transactions including our initial business combination.
Our sponsor and our management team have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, the private placement shares and any public shares purchased during or after this offering in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity. Further, our sponsor and each member of our management team have agreed to vote their founder shares and public shares purchased during or after this offering in favor of our initial business combination.
Our sponsor is deemed to be our “promoter” as such term is defined under the federal securities laws.
Transfers of Founder Shares and Private Placement Shares
The founder shares and private placement shares are each subject to transfer restrictions pursuant to lock-up provisions in the agreements entered into by our sponsor and management team. Our sponsor and our management team have agreed not to transfer, assign or sell (i) any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property, and (ii) any of their private placement shares until 30 days after the completion of our initial business combination. The foregoing restrictions are not applicable to transfers (a) to our officers or directors, any affiliates or family members of any of our officers or directors, any members or partners of our sponsor or their affiliates, any affiliates of our sponsor, or any employees of the Sponsor or any of its affiliates; (b) in the case of an individual, by gift to a member of one of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with the consummation of a business combination at prices no greater than the price at which the founder shares, or private placement shares, as applicable, were originally purchased; (f) by virtue of our sponsor’s organizational documents upon liquidation or
dissolution of our sponsor; (g) to the company for no value for cancellation in connection with the consummation of our initial business combination; (h) in the event of our liquidation prior to the completion of our initial business combination; or (i) in the event of our completion of a liquidation, merger, share exchange or other similar transaction which results in all of our public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property subsequent to our completion of our initial business combination; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreement.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On November 24, 2020, we issued 4,312,500 founder shares to our sponsor in exchange for a capital contribution of $25,000, or approximately $0.006 per share. In December 2020, our sponsor transferred 35,000 Class B ordinary shares to each of Dr. Wolfgang and Mr. Weinstein for their service as independent directors. In January 2021, our sponsor transferred 35,000 Class B ordinary shares to Mr. Harris for his service as an independent director. These 105,000 founder shares are not subject to forfeiture in the event the underwriter's over-allotment option is not exercised. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the issued and outstanding shares (excluding the private placement shares) upon completion of this offering. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial shareholders (and their permitted transferees, if any) at 20% of the issued and outstanding ordinary shares (excluding the private placement shares) upon the consummation of this offering. Up to 562,500 founder shares held by our sponsor are subject to forfeiture by our sponsor depending on the extent to which the underwriter’s over-allotment option is exercised. The founder shares (including the Class A ordinary shares issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.
Our sponsor has committed, pursuant to a written agreement, to purchase 500,000 private placement shares (or 545,000 private placement shares if the over-allotment option is exercised in full) for a purchase price of $10.00 per share in a private placement that will occur simultaneously with the closing of this offering. As such, our sponsor’s interest in this transaction is valued at between $5,000,000 and $5,450,000, depending on the number of private placement shares purchased. The private placement shares may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder until 30 days after the completion of our initial business combination.
As more fully discussed in the section of this prospectus entitled “Management — Conflicts of Interest,” if any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
We currently maintain our executive offices at 55 Hudson Yards, 28th Floor, New York, New York 10001. The cost for our use of this space is included in the up to $10,000 per month fee we will pay to our sponsor for office space, administrative and support services, commencing on the date that our securities are first listed on the Nasdaq. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
No compensation of any kind, including finder’s and consulting fees, will be paid to our sponsor, officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers, directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Prior to the consummation of this offering, our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. These loans are non-interest bearing, unsecured and are due at the earlier of March 31, 2021 and the closing of this offering. The loan will be repaid upon the closing of this offering out of the estimated $1,000,000 of offering proceeds that has been allocated to the payment of offering expenses and that is not held in the trust account.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated
to, loan us funds as may be required. If we complete an initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into shares at a price of $10.00 per share at the option of the lender. The shares would be identical to the private placement shares. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor, members of our management team or any of their affiliates as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our shareholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our shareholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a general meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
We will enter into a registration and shareholder rights agreement pursuant to which our initial shareholders, and their permitted transferees, if any, will be entitled to certain registration rights with respect to the private placement shares, including the private placement shares issuable upon conversion of working capital loans (if any) and the Class A ordinary shares issuable upon conversion of the founder shares. Further, pursuant to an agreement to be entered into on or prior to the closing of this offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for election to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement, which is described under the section of this prospectus entitled “Description of Securities — Registration and Shareholder Rights.”
Our sponsor has indicated an interest to purchase up to an aggregate of $25,000,000 of our Class A ordinary shares in a private placement that would occur concurrently with the consummation of our initial business combination. The funds from such private placement would be used as part of the consideration to the sellers in our initial business combination, and any excess funds from such private placement would be used for working capital in the post-business combination company. However, because indications of interest are not binding agreements or commitments to purchase, our sponsor may determine not to purchase any such shares, or to purchase fewer shares than it has indicated an interest in purchasing. Furthermore, we are not under any obligation to sell any such shares. Such investment would be made on terms and conditions determined at the time of the business combination.
Policy for Approval of Related Party Transactions
The audit committee of our board of directors will adopt a charter, providing for the review, approval and/or ratification of “related party transactions,” which are those transactions required to be disclosed pursuant to Item 404 of Regulation S-K as promulgated by the SEC, by the audit committee. At its meetings, the audit committee shall be provided with the details of each new, existing, or proposed related party transaction, including the terms of the transaction, any contractual restrictions that the company has already committed to, the business purpose of the transaction, and the benefits of the transaction to the company and to the relevant related party. Any member of the committee who has an interest in the related party transaction under review by the committee shall abstain from voting on the approval of the related party transaction, but may, if so requested by the chairman of the committee, participate in some or all of the committee’s discussions of the related party transaction. Upon completion of its review of the related party transaction, the committee may determine to permit or to prohibit the related party transaction.
DESCRIPTION OF SECURITIES
We are a Cayman Islands exempted company and our affairs will be governed by our amended and restated memorandum and articles of association, the Companies Act and the common law of the Cayman Islands. Pursuant to our amended and restated memorandum and articles of association which will be adopted prior to the consummation of this offering, we will be authorized to issue 500,000,000 Class A ordinary shares and 50,000,000 Class B ordinary shares, as well as 5,000,000 preference shares, $0.0001 par value each. The following description summarizes certain terms of our shares as set out more particularly in our amended and restated memorandum and articles of association. Because it is only a summary, it may not contain all the information that is important to you.
Ordinary Shares
Prior to the date of this prospectus, there were 4,312,500 Class B ordinary shares issued and outstanding, all of which were held of record by our initial shareholders, so that our initial shareholders will own 20% of our issued and outstanding shares (excluding the private placement shares and assuming our initial shareholders do not purchase any shares in this offering) after this offering. Upon the closing of this offering, 19,250,000 of our ordinary shares will be outstanding (assuming no exercise of the underwriter’s over-allotment option) including:
▪
15,000,000 Class A ordinary shares issued as part of this offering;
▪
500,000 private placement shares issued simultaneously with the closing of this offering; and
▪
3,750,000 Class B ordinary shares held by our initial shareholders.
If we increase or decrease the size of this offering, we will effect a share capitalization or share compulsory redemption or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the ownership of our initial shareholders (and their permitted transferees, if any) at 20% of our issued and outstanding ordinary shares (excluding the private placement shares) upon the consummation of this offering.
Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of our shareholders except as required by law. Unless specified in our amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of our ordinary shares that are voted is required to approve any such matter voted on by our shareholders. Approval of certain actions will require a special resolution under Cayman Islands law, being the affirmative vote of at least two-thirds of our ordinary shares that are voted, and pursuant to our amended and restated memorandum and articles of association; such actions include amending our amended and restated memorandum and articles of association and approving a statutory merger or consolidation with another company. Our board of directors is divided into three classes, each of which will generally serve for terms of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the appointment of directors, with the result that the holders of more than 50% of the shares voted for the appointment of directors can appoint all of the directors. Our shareholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor. Prior to our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. The provisions of our amended and restated memorandum and articles of association governing the appointment or removal of directors prior to our initial business combination may only be amended by a special resolution passed by holders representing at least two-thirds of our outstanding Class B ordinary shares.
Because our amended and restated memorandum and articles of association will authorize the issuance of up to 500,000,000 Class A ordinary shares, if we were to enter into a business combination, we may (depending on the terms of such a business combination) be required to increase the number of Class A ordinary shares which we are authorized to issue at the same time as our shareholders vote on the business combination to the extent we seek shareholder approval in connection with our initial business combination.
Our board of directors is divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual general meeting) serving a three-year term. In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on Nasdaq. As an exempted company, there is no requirement under the Companies Act for us to hold annual or general meetings to appoint directors. We may not hold an annual general meeting to appoint new directors prior to the consummation of our initial business combination. Prior to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders of a majority of our founder shares. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriter. The redemption rights may include the requirement that a beneficial owner must identify itself in order to valid redeem its shares. Our sponsor and our management team have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, the private placement shares and any public shares purchased during or after this offering in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity. Unlike many blank check companies that hold shareholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote is not required by law, if a shareholder vote is not required by applicable law or stock exchange rule and we do not decide to hold a shareholder vote for business or other reasons, we will, pursuant to our amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated memorandum and articles of association will require these tender offer documents to contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, a shareholder approval of the transaction is required by applicable law or stock exchange rule, or we decide to obtain shareholder approval for business or other reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek shareholder approval, we will complete our initial business combination only if a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a general meeting are voted in favor of the business combination. However, the participation of our sponsor, officers, directors, advisors or their affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our initial business combination even if a majority of our public shareholders vote, or indicate their intention to vote, against such initial business combination unless restricted by applicable Nasdaq rules. For purposes of seeking approval of the majority of our issued and outstanding ordinary shares, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. Our amended and restated memorandum and articles of association will require that at least five days’ notice will be given of any general meeting.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as
defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares, without our prior consent. However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Our shareholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business combination, and such shareholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such shareholders will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And, as a result, such shareholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their shares in open market transactions, potentially at a loss.
If we seek shareholder approval, we will complete our initial business combination only if a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a general meeting are voted in favor of the business combination. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares and the private placement shares, we would need 5,375,001, or 35.8% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), or 562,501 or 3.75% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 15,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved. Additionally, each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all.
Pursuant to our amended and restated memorandum and articles of association, if we do not consummate an initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case of clause (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering).
In the event of a liquidation, dissolution or winding up of the company after a business combination, our shareholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of shares, if any, having preference over the ordinary shares. Our shareholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the ordinary shares, except that we will provide our public shareholders with the opportunity to redeem their public shares for cash at a per share price 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 us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, upon the completion of our initial business combination, subject to the limitations described herein.
Private Placement Shares
The private placement shares may not be redeemed. The private placement shares will not be transferable or salable until 30 days after the completion of our initial business combination (except, among other limited exceptions as described under “Principal Shareholders — Transfers of Founder Shares and Private Placement Shares,” to our officers and directors and other persons or entities affiliated with our sponsor). Holders of our private placement shares are entitled to certain registration rights. If we do not consummate an initial business combination within 24 months from the closing of this offering, the proceeds from the sale of the
private placement shares held in the trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and the private placement shares will be worthless. Further, if we seek shareholder approval, we will complete our initial business combination only if a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a shareholder meeting are voted in favor of the business combination. In such case, our sponsor and each member of our management team have agreed to vote their founder shares, private placement shares and any public shares purchased during or after this offering in favor of our initial business combination. Otherwise, the private placement shares are identical to the Class A ordinary shares sold in this offering.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. Up to $1,500,000 of such loans may be convertible into shares of the post-business combination company at a price of $10.00 per share at the option of the lender. Such shares would be identical to the private placement shares.
Founder Shares
The founder shares are designated as Class B ordinary shares and, except as described below, are identical to the Class A ordinary shares being sold in this offering, and holders of founder shares have the same shareholder rights as public shareholders, except that:
▪
only holders of the founder shares have the right to vote on the appointment of directors prior to the completion of our initial business combination and holders of a majority of our founder shares may remove a member of the board of directors for any reason;
▪
the founder shares are subject to certain transfer restrictions, as described in more detail below;
▪
our sponsor and our management team have entered into an agreement with us, pursuant to which they have agreed to (i) waive their redemption rights with respect to any founder shares, the private placement shares and public shares they hold, (ii) to waive their redemption rights with respect to any founder shares, private placement shares and any public shares purchased during or after this offering in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity and (iii) waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering);
▪
the founder shares will automatically convert into our Class A ordinary shares at the time of our initial business combination as described below adjacent to the caption “Founder shares conversion and anti-dilution rights” and in our amended and restated memorandum and articles of association; and
▪
the founder shares are entitled to registration rights.
If we submit our initial business combination to our public shareholders for a vote, our sponsor and our management team have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. If we seek shareholder approval, we will complete our initial business combination only if a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a general meeting are voted in favor of the business combination. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares and the private placement shares, we would need 5,375,001, or 35.8% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), or 562,501 or 3.75% (assuming only the minimum number of shares representing a quorum
are voted and the over-allotment option is not exercised), of the 15,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved;
The founder shares will automatically convert into Class A ordinary shares on the day of the closing of our initial business combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding (excluding the private placement shares) upon completion of this offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any private placement shares issued to our sponsor, members of our management team or any of their affiliates upon conversion of working capital loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.
Except as described herein, our sponsor and our management team have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of our sponsor and management team with respect to any founder shares, private placement shares and Class A ordinary shares issued upon conversion or exercise thereof. We refer to such transfer restrictions throughout this prospectus as the lock-up. Notwithstanding the foregoing, if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the founder shares will be released from the lock-up.
Prior to the completion of our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. These provisions of our amended and restated memorandum and articles of association may only be amended by a special resolution passed by holders representing at least two-thirds of our outstanding Class B ordinary shares. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law, holders of our founder shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote.
Register of Members
Under Cayman Islands law, we must keep a register of members and there will be entered therin:
▪
the names and addresses of the members, a statement of the shares held by each member, and of the amount paid or agreed to be considered as paid, on the shares of each member and the voting rights of shares of each member;
▪
whether voting rights are attached to the share in issue;
▪
the date on which the name of any person was entered on the register as a member; and
▪
the date on which any person ceased to be a member.
Under Cayman Islands law, the register of members of our company is prima facie evidence of the matters set out therein (i.e. the register of members will raise a presumption of fact on the matters referred to above unless rebutted) and a member registered in the register of members will be deemed as a matter of Cayman Islands law to have legal title to the shares as set against its name in the register of members. Upon the closing
of this public offering, the register of members will be immediately updated to reflect the issue of shares by us. Once our register of members has been updated, the shareholders recorded in the register of members will be deemed to have legal title to the shares set against their name. However, there are certain limited circumstances where an application may be made to a Cayman Islands court for a determination on whether the register of members reflects the correct legal position. Further, the Cayman Islands court has the power to order that the register of members maintained by a company should be rectified where it considers that the register of members does not reflect the correct legal position. If an application for an order for rectification of the register of members were made in respect of our ordinary shares, then the validity of such shares may be subject to re-examination by a Cayman Islands court.
Preference Shares
Our amended and restated memorandum and articles of association will authorize 5,000,000 preference shares and will provide that preference shares may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without shareholder approval, issue preference shares with voting and other rights that could adversely affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover effects. The ability of our board of directors to issue preference shares without shareholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preference shares issued and outstanding at the date hereof. Although we do not currently intend to issue any preference shares, we cannot assure you that we will not do so in the future. No preference shares are being issued or registered in this offering.
Dividends
We have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time, and we will only pay such dividend out of our profits or share premium (subject to solvency requirements) as permitted under Cayman Islands law. If we increase the size of this offering, we will effect a share capitalization or other appropriate mechanism immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 20% of our issued and outstanding ordinary shares (excluding the private placement shares) upon the consummation of this offering. Further, if we incur any indebtedness in connection with a business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Our Transfer Agent
The transfer agent for our ordinary shares is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent, its agents and each of its shareholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any claims and losses due to any gross negligence or intentional misconduct of the indemnified person or entity.
Certain Differences in Corporate Law
Cayman Islands companies are governed by the Companies Act. The Companies Act is modeled on English Law but does not follow recent English Law statutory enactments, and differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the material differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.
Mergers and Similar Arrangements. In certain circumstances, the Companies Act allows for mergers or consolidations between two Cayman Islands companies, or between a Cayman Islands exempted company and a company incorporated in another jurisdiction (provided that is facilitated by the laws of that other jurisdiction) so as to form a single surviving company.
Where the merger or consolidation is between two Cayman Islands companies, the directors of each company must approve and enter into a written plan of merger or consolidation containing certain prescribed information. That plan or merger or consolidation must then be authorized by either (a) a special resolution (usually a majority of two-thirds in value of the voting shares voted at a general meeting) of the shareholders of each company; or (b) such other authorization, if any, as may be specified in such constituent company’s articles of association. No shareholder resolution is required for a merger between a parent company (i.e., a company that owns at least 90% of the issued shares of each class in a subsidiary company) and its subsidiary company. The consent of each holder of a fixed or floating security interest of a constituent company must be obtained, unless the court waives such requirement. If the Cayman Islands Registrar of Companies is satisfied that the requirements of the Companies Act (which includes certain other formalities) have been complied with, the Registrar of Companies will register the plan of merger or consolidation.
Where the merger or consolidation involves a foreign company, the procedure is similar, save that with respect to the foreign company, the directors of the Cayman Islands exempted company are required to make a declaration to the effect that, having made due enquiry, they are of the opinion that the requirements set out below have been met: (i) that the merger or consolidation is permitted or not prohibited by the constitutional documents of the foreign company and by the laws of the jurisdiction in which the foreign company is incorporated, and that those laws and any requirements of those constitutional documents have been or will be complied with; (ii) that no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the foreign company in any jurisdictions; (iii) that no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the foreign company, its affairs or its property or any part thereof; and (iv) that no scheme, order, compromise or other similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the foreign company are and continue to be suspended or restricted.
Where the surviving company is the Cayman Islands exempted company, the directors of the Cayman Islands exempted company are further required to make a declaration to the effect that, having made due enquiry, they are of the opinion that the requirements set out below have been met: (i) that the foreign company is able to pay its debts as they fall due and that the merger or consolidated is bona fide and not intended to defraud unsecured creditors of the foreign company; (ii) that in respect of the transfer of any security interest granted by the foreign company to the surviving or consolidated company (a) consent or approval to the transfer has been obtained, released or waived; (b) the transfer is permitted by and has been approved in accordance with the constitutional documents of the foreign company; and (c) the laws of the jurisdiction of the foreign company with respect to the transfer have been or will be complied with; (iii) that the foreign company will, upon the merger or consolidation becoming effective, cease to be incorporated, registered or exist under the laws of the relevant foreign jurisdiction; and (iv) that there is no other reason why it would be against the public interest to permit the merger or consolidation.
Where the above procedures are adopted, the Companies Act provides certain limited appraisal rights for dissenting shareholders to be paid a payment of the fair value of his shares upon their dissenting to the merger or consolidation if they follow a prescribed procedure. In essence, that procedure is as follows: (a) the shareholder must give his written objection to the merger or consolidation to the constituent company before the vote on the merger or consolidation, including a statement that the shareholder proposes to demand payment for his shares if the merger or consolidation is authorized by the vote; (b) within 20 days following the date on which the merger or consolidation is approved by the shareholders, the constituent company must give written notice to each shareholder who made a written objection; (c) a shareholder must within 20 days following receipt of such notice from the constituent company, give the constituent company a written notice of his intention to dissent including, among other details, a demand for payment of the fair value of his shares; (d) within seven days following the date of the expiration of the period set out in paragraph (b) above or seven days following the date on which the plan of merger or consolidation is filed, whichever is later, the constituent company, the surviving company or the consolidated company must make a written offer to each dissenting shareholder to purchase his shares at a price that the company determines is the fair value and if the company and the shareholder agree the price within 30 days following the date on which the offer was made, the company must pay the shareholder such amount; and (e) if the company and the shareholder fail to agree a price within such 30 day period, within 20 days following the date on which such 30 day period expires, the company (and any dissenting shareholder) must file a petition with the Cayman Islands Grand Court to determine the fair value and such petition must be accompanied by a list of the names and addresses of the
dissenting shareholders with whom agreements as to the fair value of their shares have not been reached by the company. At the hearing of that petition, the court has the power to determine the fair value of the shares together with a fair rate of interest, if any, to be paid by the company upon the amount determined to be the fair value. Any dissenting shareholder whose name appears on the list filed by the company may participate fully in all proceedings until the determination of fair value is reached. These rights of a dissenting shareholder are not available in certain circumstances, for example, to dissenters holding shares of any class in respect of which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the relevant date or where the consideration for such shares to be contributed are shares of any company listed on a national securities exchange or shares of the surviving or consolidated company.
Moreover, Cayman Islands law has separate statutory provisions that facilitate the reconstruction or amalgamation of companies in certain circumstances, schemes of arrangement will generally be more suited for complex mergers or other transactions involving widely held companies, commonly referred to in the Cayman Islands as a “scheme of arrangement” which may be tantamount to a merger. In the event that a merger was sought pursuant to a scheme of arrangement (the procedures for which are more rigorous and take longer to complete than the procedures typically required to consummate a merger in the United States), the arrangement in question must be approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meeting summoned for that purpose. The convening of the meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:
▪
we are not proposing to act illegally or beyond the scope of our corporate authority and the statutory provisions as to majority vote have been complied with;
▪
the shareholders have been fairly represented at the meeting in question;
▪
the arrangement is such as a businessman would reasonably approve; and
▪
the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act or that would amount to a “fraud on the minority.”
If a scheme of arrangement or takeover offer (as described below) is approved, any dissenting shareholder would have no rights comparable to appraisal rights (providing rights to receive payment in cash for the judicially determined value of the shares), which would otherwise ordinarily be available to dissenting shareholders of United States corporations.
Squeeze-out Provisions. When a tender offer is made and accepted by holders of 90% of the shares to whom the offer relates within four months, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands, but this is unlikely to succeed unless there is evidence of fraud, bad faith, collusion or inequitable treatment of the shareholders.
Further, transactions similar to a merger, reconstruction and/or an amalgamation may in some circumstances be achieved through means other than these statutory provisions, such as a share capital exchange, asset acquisition or control, or through contractual arrangements of an operating business.
Shareholders’ Suits. Maples and Calder, our Cayman Islands legal counsel, is not aware of any reported class action having been brought in a Cayman Islands court. Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions. In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers or directors usually may not be brought by a shareholder. However, based both on Cayman Islands authorities and on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:
▪
a company is acting, or proposing to act, illegally or ultra vires (beyond the scope of its authority);
▪
the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or
▪
those who control the company are perpetrating a “fraud on the minority.”
A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
Enforcement of Civil Liabilities. The Cayman Islands has a different body of securities laws as compared to the United States and provides less protection to investors. Additionally, Cayman Islands companies may not have standing to sue before the Federal courts of the United States.
We have been advised by Maples and Calder, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
Special Considerations for Exempted Companies. We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:
▪
an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies;
▪
an exempted company’s register of members is not open to inspection;
▪
an exempted company does not have to hold an annual general meeting;
▪
an exempted company may issue shares with no par value;
▪
an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);
▪
an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
▪
an exempted company may register as a limited duration company; and
▪
an exempted company may register as a segregated portfolio company.
“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).
Amended and Restated Memorandum and Articles of Association
Our amended and restated memorandum and articles of association will contain provisions designed to provide certain rights and protections relating to this offering that will apply to us until the completion of our initial business combination. These provisions cannot be amended without a special resolution. As a matter of Cayman Islands law, a resolution is deemed to be a special resolution where it has been approved by either
(i) the affirmative vote of at least two-thirds (or any higher threshold specified in a company’s articles of association) of a company’s shareholders entitled to vote and so voting at a general meeting for which notice specifying the intention to propose the resolution as a special resolution has been given; or (ii) if so authorized by a company’s articles of association, by a unanimous written resolution of all of the company’s shareholders. Our amended and restated memorandum and articles of association will provide that special resolutions must be approved either by at least two-thirds of our shareholders who attend and vote at a general meeting of the company (i.e., the lowest threshold permissible under Cayman Islands law), or by a unanimous written resolution of all of our shareholders.
Our initial shareholders and their permitted transferees, if any, who will collectively beneficially own 20% of our ordinary shares (excluding the private placement shares and assuming they do not purchase any public shares in this offering) upon the closing of this offering, will participate in any vote to amend our amended and restated memorandum and articles of association and will have the discretion to vote in any manner they choose. Specifically, our amended and restated memorandum and articles of association will provide, among other things, that:
▪
if we do not consummate an initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law;
▪
prior to or in connection with our initial business combination, we may not issue additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on our initial business combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial business combination or (b) to approve an amendment to our amended and restated memorandum and articles of association to (x) extend the time we have to consummate a business combination beyond 24 months from the closing of this offering or (y) amend the foregoing provisions;
▪
although we do not intend to enter into a business combination with a target business that is affiliated with our sponsor, our directors or our executive officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm that such a business combination or transaction is fair to our company from a financial point of view;
▪
if a shareholder vote on our initial business combination is not required by applicable law or stock exchange rule and we do not decide to hold a shareholder vote for business or other reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act;
▪
our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account) at the time of signing the agreement to enter into the initial business combination;
▪
if our shareholders approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business
combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity, we will provide our public shareholders with the opportunity to redeem all or a portion of their ordinary shares upon such approval 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 us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein; and
▪
we will not effectuate our initial business combination with another blank check company or a similar company with nominal operations.
In addition, our amended and restated memorandum and articles of association will provide that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001.
The Companies Act permits a company incorporated in the Cayman Islands to amend its memorandum and articles of association with the approval of a special resolution. A company’s articles of association may specify that the approval of a higher majority is required but, provided the approval of the required majority is obtained, any Cayman Islands exempted company may amend its memorandum and articles of association regardless of whether its memorandum and articles of association provides otherwise. Accordingly, although we could amend any of the provisions relating to our proposed offering, structure and business plan which are contained in our amended and restated memorandum and articles of association, we view all of these provisions as binding obligations to our shareholders and neither we, nor our officers or directors, will take any action to amend or waive any of these provisions unless we provide dissenting public shareholders with the opportunity to redeem their public shares.
Anti-Money Laundering — Cayman Islands
If any person in the Cayman Islands knows or suspects, or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or money laundering or is involved with terrorism or terrorist financing and property and the information for that knowledge or suspicion came to their attention in the course of business in the regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (2020 Revision) of the Cayman Islands if the disclosure relates to criminal conduct or money laundering, or (ii) a police officer of the rank of constable or higher, or the Financial Reporting Authority, pursuant to the Terrorism Act (2018 Revision) of the Cayman Islands, if the disclosure relates to involvement with terrorism or terrorist financing and property. Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise.
Data Protection — Cayman Islands
We have certain duties under the Data Protection Act, 2017 of the Cayman Islands (the “Data Protection Act”) based on internationally accepted principles of data privacy.
Privacy Notice
Introduction
This privacy notice puts our shareholders on notice that through your investment in the Company you will provide us with certain personal information which constitutes personal data within the meaning of the Data Protection Act (“personal data”). In the following discussion, the “company” refers to us and our affiliates and/or delegates, except where the context requires otherwise.
Investor Data
We will collect, use, disclose, retain and secure personal data to the extent reasonably required only and within the parameters that could be reasonably expected during the normal course of business. We will only process, disclose, transfer or retain personal data to the extent legitimately required to conduct our activities of on an ongoing basis or to comply with legal and regulatory obligations to which we are subject. We will only transfer personal data in accordance with the requirements of the Data Protection Act, and will apply appropriate
technical and organizational information security measures designed to protect against unauthorized or unlawful processing of the personal data and against the accidental loss, destruction or damage to the personal data.
In our use of this personal data, we will be characterized as a “data controller” for the purposes of the Data Protection Act, while our affiliates and service providers who may receive this personal data from us in the conduct of our activities may either act as our “data processors” for the purposes of the Data Protection Act or may process personal information for their own lawful purposes in connection with services provided to us.
We may also obtain personal data from other public sources. Personal data includes, without limitation, the following information relating to a shareholder and/or any individuals connected with a shareholder as an investor: name, residential address, email address, contact details, corporate contact information, signature, nationality, place of birth, date of birth, tax identification, credit history, correspondence records, passport number, bank account details, source of funds details and details relating to the shareholder’s investment activity.
Who this Affects
If you are a natural person, this will affect you directly. If you are a corporate investor (including, for these purposes, legal arrangements such as trusts or exempted limited partnerships) that provides us with personal data on individuals connected to you for any reason in relation your investment in the company, this will be relevant for those individuals and you should transmit the content of this Privacy Notice to such individuals or otherwise advise them of its content.
How the Company May Use a Shareholder’s Personal Data
The company, as the data controller, may collect, store and use personal data for lawful purposes, including, in particular:
1.
where this is necessary for the performance of our rights and obligations under any purchase agreements;
2.
where this is necessary for compliance with a legal and regulatory obligation to which we are subject (such as compliance with anti-money laundering and FATCA/CRS requirements); and/or
3.
where this is necessary for the purposes of our legitimate interests and such interests are not overridden by your interests, fundamental rights or freedoms.
Should we wish to use personal data for other specific purposes (including, if applicable, any purpose that requires your consent), we will contact you.
Why We May Transfer Your Personal Data
In certain circumstances we may be legally obliged to share personal data and other information with respect to your shareholding with the relevant regulatory authorities such as the Cayman Islands Monetary Authority or the Tax Information Authority. They, in turn, may exchange this information with foreign authorities, including tax authorities.
We anticipate disclosing personal data to persons who provide services to us and their respective affiliates (which may include certain entities located outside the United States, the Cayman Islands or the European Economic Area), who will process your personal data on our behalf.
The Data Protection Measures We Take
Any transfer of personal data by us or our duly authorized affiliates and/or delegates outside of the Cayman Islands shall be in accordance with the requirements of the Data Protection Act.
We and our duly authorized affiliates and/or delegates shall apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of personal data, and against accidental loss or destruction of, or damage to, personal data.
We shall notify you of any personal data breach that is reasonably likely to result in a risk to your interests, fundamental rights or freedoms or those data subjects to whom the relevant personal data relates.
Certain Anti-Takeover Provisions of our Amended and Restated Memorandum and Articles of Association
Our amended and restated memorandum and articles of association will provide that our board of directors will be classified into three classes of directors. As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at two or more annual meetings.
Our authorized but unissued Class A ordinary shares and preference shares are available for future issuances without shareholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved Class A ordinary shares and preference shares could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Securities Eligible for Future Sale
Immediately after this offering we will have 19,250,000 Class A ordinary shares (or 22,107,500 Class A ordinary shares if the underwriter’s over-allotment option is exercised in full) issued and outstanding on an as-converted basis. Of these shares, the Class A ordinary shares sold in this offering (15,000,000 Class A ordinary shares if the underwriter’s over-allotment option is not exercised and 17,250,000 Class A ordinary shares if the underwriter’s over-allotment option is exercised in full) will be freely tradable without restriction or further registration under the Securities Act, except for any Class A ordinary shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the outstanding founder shares (3,750,000 founder shares if the underwriter’s over-allotment option is not exercised and 4,312,500 founder shares if the underwriter’s over-allotment option is exercised in full) and all of the outstanding private placement shares (500,000 private placement shares if the underwriter’s over-allotment option is not exercised and 545,000 private placement shares if the underwriter’s over-allotment option is exercised in full) will be restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering.
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.
Persons who have beneficially owned restricted shares for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
▪
1% of the total number of ordinary shares then outstanding, which will equal 192,500 shares immediately after this offering (or 221,075 shares if the underwriter exercises its over-allotment option in full); and
▪
the average weekly reported trading volume of the Class A ordinary shares during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies
Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:
▪
the issuer of the securities that was formerly a shell company has ceased to be a shell company;
▪
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
▪
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
▪
at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
As a result, our initial shareholders will be able to sell their founder shares and our sponsor will be able to sell its private placement shares, pursuant to Rule 144 without registration one year after we have completed our initial business combination.
Registration and Shareholder Rights
The holders of the founder shares, private placement shares, including the private placement shares that may be issued upon conversion of working capital loans, and any Class A ordinary shares issuable upon conversion of the founder shares, will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of this offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the founder shares, as described in the following paragraph, and (ii) in the case of the private placement shares, 30 days after the completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Except as described herein, our sponsor and our management team have agreed not to transfer, assign or sell (i) any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property, and (ii) any of their private placement shares until 30 days after the completion of our initial business combination. Any permitted transferees will be subject to the same restrictions and other agreements of our sponsor and management team with respect to any founder shares and private placement shares. We refer to such transfer restrictions throughout this prospectus as the lock-up.
In addition, pursuant to an agreement to be entered into on or prior to the closing of this offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for election to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement.
Listing of Securities
We have applied to have our Class A ordinary shares listed on Nasdaq under the symbol “HCAQ.”
TAXATION
The following summary of certain Cayman Islands and U.S. federal income tax consequences of an investment in our Class A ordinary shares, which we also refer to as our securities, is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in our Class A ordinary shares, such as the tax consequences under state, local and other tax laws.
Prospective investors should consult their advisors on the possible tax consequences of investing in our securities under the laws of their country of citizenship, residence or domicile.
Cayman Islands Tax Considerations
The following is a discussion on certain Cayman Islands income tax consequences of an investment in the securities of the company. The discussion is a general summary of present law, which is subject to prospective and retroactive change. It is not intended as tax advice, does not consider any investor’s particular circumstances, and does not consider tax consequences other than those arising under Cayman Islands law.
Under Existing Cayman Islands Laws
Payments of dividends and capital in respect of our securities will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of the securities nor will gains derived from the disposal of the securities be subject to Cayman Islands income or corporate tax. The Cayman Islands currently has no income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax.
No stamp duty is payable in respect of the issue of our Class A ordinary shares or on an instrument of transfer in respect of such shares.
The company has been incorporated under the laws of the Cayman Islands as an exempted company with limited liability and, as such, has applied for and received an undertaking from the Financial Secretary of the Cayman Islands in the following form:
THE TAX CONCESSIONS ACT
(2018 Revision)
UNDERTAKING AS TO TAX CONCESSIONS
In accordance with the provision of Section 6 of The Tax Concessions Act (2018 Revision), the Financial Secretary undertakes with the company:
2. That no law which is hereafter enacted in the Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to the company or its operations; and 3. In addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable:
3.2 On or in respect of the shares, debentures or other obligations of the company; or
3.3 by way of the withholding in whole or part, of any relevant payment as defined in Section 6(3) of the Tax Concessions Act (2018 Revision).
These concessions shall be for a period of 20 years from the date hereof.
United States Federal Income Tax Considerations
General
The following discussion summarizes certain U.S. federal income tax considerations generally applicable to the purchase, ownership and disposition of our Class A ordinary shares, other than private placement shares, that are purchased in this offering by U.S. Holders (as defined below) and Non-U.S. Holders (as defined below).
This discussion is limited to certain U.S. federal income tax considerations to beneficial owners of our Class A ordinary shares who are initial purchasers of a Class A ordinary share (other than a private placement share) pursuant to this offering and hold the Class A ordinary share as a capital asset under the U.S. Internal Revenue Code of 1986, as amended (the “Code”). This discussion assumes that any distributions made (or deemed made) by us on our Class A ordinary shares and any consideration received (or deemed received) by a holder in consideration for the sale or other disposition of our securities will be in U.S. dollars. This discussion is a summary only and does not consider all aspects of U.S. federal income taxation that may be relevant to the ownership and disposition of a Class A ordinary share by a prospective investor in light of its particular circumstances, including:
▪
our sponsor, founders, officers or directors;
▪
banks, financial institutions or financial services entities;
▪
broker-dealers;
▪
taxpayers that are subject to the mark-to-market accounting rules;
▪
S-corporations;
▪
tax-exempt entities;
▪
governments or agencies or instrumentalities thereof;
▪
insurance companies;
▪
regulated investment companies;
▪
real estate investment trusts;
▪
expatriates or former long-term residents of the United States;
▪
U.S. Holders (as defined below) owning or considered as owning 15 percent or more (measured by vote or value) of our ordinary shares;
▪
persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation or in connection with services;
▪
persons that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated or similar transaction; or
▪
U.S. Holders (as defined below) whose functional currency is not the U.S. dollar.
Moreover, the discussion below is based upon the provisions of the Code, the Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all as of the date hereof. Those authorities may be repealed, revoked, modified or subject to differing interpretations, possibly on a retroactive basis, so as to result in U.S. federal income tax consequences different from those discussed below. Furthermore, this discussion does not address any aspect of U.S. federal non-income tax laws, such as gift, estate or Medicare contribution tax laws, or state, local or non-U.S. tax laws.
We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree with the discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion.
As used herein, the term “U.S. Holder” means a beneficial owner of Class A ordinary shares that is for U.S. federal income tax purposes: (i) an individual citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust, or (B) it has in effect under applicable U.S. Treasury Regulations a valid election to be treated as a U.S. person.
This discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our securities through such entities. If a partnership (or other entity or arrangement classified as a
partnership for U.S. federal income tax purposes) is the beneficial owner of our Class A ordinary shares, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partner and the partnership. A U.S. Holder who is a partner of a partnership holding our Class A ordinary shares is urged to consult its tax advisor.
THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY, IS ONLY A SUMMARY OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS ASSOCIATED WITH THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR CLASS A ORDINARY SHARES AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING. EACH PROSPECTIVE INVESTOR IN OUR SECURITIES IS URGED TO CONSULT ITS TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE OWNERSHIP AND DISPOSITION OF OUR CLASS A ORDINARY SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, AND NON-U.S. TAX LAWS, AS WELL AS UNDER ANY APPLICABLE TAX TREATY.
U.S. Holders
Taxation of Distributions
Subject to the passive foreign investment company (“PFIC”) rules discussed below, a U.S. Holder generally will be required to include in gross income as dividends the amount of any distribution paid on our Class A ordinary shares to the extent the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Such dividends paid by us will be taxable to a corporate U.S. Holder at regular rates and will not be eligible for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received from other domestic corporations. Distributions in excess of such earnings and profits generally will be applied against and reduce the U.S. Holder’s basis in its Class A ordinary shares (but not below zero) and, to the extent in excess of such basis, will be treated as gain from the sale or exchange of such Class A ordinary shares (see “— Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares” below).
With respect to non-corporate U.S. Holders, under tax laws currently in effect and subject to certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), dividends generally will be taxed at the lower applicable long-term capital gains rate (see “— Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares” below) only if our Class A ordinary shares are readily tradable on an established securities market in the United States, the company is not treated as a PFIC at the time the dividend was paid or in the preceding taxable year and provided certain holding period requirements are met. It is unclear, however, whether certain redemption rights described in this prospectus may suspend the running of the applicable holding period for this purpose. U.S. Holders are urged to consult their tax advisors regarding the availability of such lower rate for any dividends paid with respect to our Class A ordinary shares.
Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares
Subject to the PFIC rules discussed below, a U.S. Holder generally will recognize capital gain or loss on the sale or other taxable disposition of our Class A ordinary shares (including on our dissolution and liquidation if we do not consummate an initial business combination within the required time period). Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for such Class A ordinary shares exceeds one year. It is unclear, however, whether certain redemption rights described in this prospectus may suspend the running of the applicable holding period for this purpose.
The amount of gain or loss recognized on a sale or other taxable disposition generally will be equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition and (ii) the U.S. Holder’s adjusted tax basis in its Class A ordinary shares so disposed of. A U.S. Holder’s adjusted tax basis in its Class A ordinary shares generally will equal the U.S. Holder’s acquisition cost reduced by any prior distributions treated as a return of capital. Long-term capital gain realized by a non-corporate U.S. Holder is currently eligible to be taxed at reduced rates. The deduction of capital losses is subject to certain limitations.
Redemption of Class A Ordinary Shares
Subject to the PFIC rules discussed below, in the event that a U.S. Holder’s Class A ordinary shares are redeemed pursuant to the redemption provisions described in this prospectus under “Description of Securities — Ordinary Shares” or if we purchase a U.S. Holder’s Class A ordinary shares in an open market transaction (referred to herein as a “redemption”), the treatment of the redemption for U.S. federal income tax purposes will depend on whether it qualifies as a sale of the Class A ordinary shares under Section 302 of
the Code. If the redemption qualifies as a sale of Class A ordinary shares, the U.S. Holder will be treated as described under “— Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares” above. If the redemption does not qualify as a sale of Class A ordinary shares, the U.S. Holder will be treated as receiving a corporate distribution with the tax consequences described above under “— Taxation of Distributions.” Whether a redemption qualifies for sale treatment will depend largely on the total number of our shares treated as held by the U.S. Holder (including any shares constructively owned by the U.S. Holder described in the following paragraph) relative to all of our shares outstanding both before and after such redemption. The redemption of Class A ordinary shares generally will be treated as a sale of the Class A ordinary shares (rather than as a corporate distribution) if such redemption (i) is “substantially disproportionate” with respect to the U.S. Holder, (ii) results in a “complete termination” of the U.S. Holder’s interest in us or (iii) is “not essentially equivalent to a dividend” with respect to the U.S. Holder. These tests are explained more fully below.
In determining whether any of the foregoing tests are satisfied, a U.S. Holder takes into account not only Class A ordinary shares actually owned by the U.S. Holder, but also our shares that are constructively owned by it. A U.S. Holder may constructively own, in addition to shares owned directly, shares owned by certain related individuals and entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder, as well as any shares the U.S. Holder has a right to acquire by exercise of an option. In order to meet the substantially disproportionate test, the percentage of our outstanding voting shares actually and constructively owned by the U.S. Holder immediately following the redemption of Class A ordinary shares must, among other requirements, be less than 80 percent of the percentage of our outstanding voting shares actually and constructively owned by the U.S. Holder immediately before the redemption. Prior to the completion of our initial business combination, the Class A ordinary shares may not be treated as voting stock for this purpose and, consequently, this substantially disproportionate test may not be applicable. There will be a complete termination of a U.S. Holder’s interest if either (i) all of our shares actually and constructively owned by the U.S. Holder are redeemed or (ii) all of our shares actually owned by the U.S. Holder are redeemed and the U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of shares owned by certain family members and the U.S. Holder does not constructively own any other shares of ours. The redemption of the Class A ordinary shares will not be essentially equivalent to a dividend with respect to a U.S. Holder if it results in a “meaningful reduction” of the U.S. Holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S. Holder’s proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority shareholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. Holder are urged to consult with its tax advisors as to the tax consequences of a redemption.
If none of the foregoing tests are satisfied, then the redemption will be treated as a corporate distribution and the tax effects will be as described under “— Taxation of Distributions” above. After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed Class A ordinary shares will be added to the U.S. Holder’s adjusted tax basis in its remaining shares, or, if it has none, possibly to the U.S. Holder’s adjusted tax basis in other shares constructively owned by it.
Passive Foreign Investment Company Rules
A foreign (i.e., non-U.S.) corporation will be classified as a PFIC for U.S. federal income tax purposes if either (i) at least 75% of its gross income in a taxable year, including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income or (ii) at least 50% of its assets in a taxable year (ordinarily determined based on fair market value and averaged quarterly over the year), including its pro rata share of the assets of any corporation in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce, passive income. Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets.
Because we are a blank check company, with no current active business, we believe that it is likely that we will meet the PFIC asset and/or income test for our current taxable year. However, pursuant to a start-up exception, a corporation will not be a PFIC for the first taxable year in which the corporation has gross income (the “start-up year”), if (1) no predecessor of the corporation was a PFIC; (2) the corporation satisfies the IRS that it will not be a PFIC for either of the two taxable years following the start-up year; and (3) the
corporation is not in fact a PFIC for either of those years. The applicability of the start-up exception to us is uncertain and will not be known until after the close of our current taxable year or, possibly, after the close of our two subsequent taxable years. After the acquisition of a company or assets in a business combination, we may still meet one of the PFIC tests depending on the timing of the acquisition and the amount of our passive income and assets as well as the passive income and assets of the acquired business. If the company that we acquire in a business combination is a PFIC (or we do not complete a business acquisition by the end of the first taxable year after the taxable year of our formation), then we will likely not qualify for the start-up exception and will be a PFIC for our current taxable year. Our actual PFIC status for our current taxable year or any subsequent taxable year, however, will not be determinable until after the end of such taxable year. Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year or any future taxable year.
Although our PFIC status is determined annually, an initial determination that our company is a PFIC will generally apply for subsequent years to a U.S. Holder who held Class A ordinary shares while we were a PFIC, whether or not we meet the test for PFIC status in those subsequent years. If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our Class A ordinary shares and the U.S. Holder did not make either a qualified electing fund (“QEF”) election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) Class A ordinary shares, a QEF election along with a purging election, or a mark-to-market election, each as described below, such U.S. Holder generally will be subject to special and adverse rules with respect to (i) any gain recognized by the U.S. Holder on the sale or other disposition of its Class A ordinary shares and (ii) any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of the Class A ordinary shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for the Class A ordinary shares).
Under these rules:
▪
the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the Class A ordinary shares;
▪
the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the portion of such holding period before the first day of our first taxable year in which we are a PFIC, will be taxed as ordinary income;
▪
the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder, and
▪
an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder with respect to the tax attributable to each such other taxable year of the U.S. Holder.
PFIC Elections
In general, if we are determined to be a PFIC, a U.S. Holder may avoid the adverse PFIC tax consequences described above in respect of our Class A ordinary shares by making and maintaining a timely and valid QEF election (if eligible to do so) to include in income its pro rata share of our net capital gains (as long-term capital gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends. A U.S. Holder generally may make a separate election to defer the payment of taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an interest charge.
The QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S. Holder generally makes a QEF election by attaching a completed IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), including the information provided in a PFIC Annual Information Statement, to a timely filed U.S. federal income tax return for the tax year to which the election relates. Retroactive QEF elections generally may be made only by filing a protective statement with such return and if certain other conditions are met or with the consent of the IRS. U.S. Holders are urged to consult their tax advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances.
In order to comply with the requirements of a QEF election, a U.S. Holder must receive a PFIC Annual Information Statement from us. If we determine we are a PFIC for any taxable year, upon written request, we will endeavor to provide to a U.S. Holder such information as the IRS may require, including a PFIC Annual Information Statement, in order to enable the U.S. Holder to make and maintain a QEF election, but there is no assurance that we will timely provide such required information. There is also no assurance that we will have timely knowledge of our status as a PFIC in the future or of the required information to be provided.
If a U.S. Holder has made a QEF election with respect to our Class A ordinary shares, and the excess distribution rules discussed above do not apply to such shares (because of a timely QEF election for our first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to hold) such shares or a purge of the PFIC taint pursuant to a purging election, as described above), any gain recognized on the sale of our Class A ordinary shares generally will be taxable as capital gain and no additional tax charge will be imposed under the PFIC rules. As discussed above, if we are a PFIC for any taxable year, a U.S. Holder of our Class A ordinary shares that has made a QEF election will be currently taxed on its pro rata share of our earnings and profits, whether or not distributed for such year. A subsequent distribution of such earnings and profits that were previously included in income generally should not be taxable when distributed to such U.S. Holder. The tax basis of a U.S. Holder’s shares in a QEF will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under the above rules. In addition, if we are not a PFIC for any taxable year, such U.S. Holder will not be subject to the QEF inclusion regime with respect to our Class A ordinary shares for such taxable year.
Alternatively, if we are a PFIC and our Class A ordinary shares constitute “marketable stock,” a U.S. Holder may avoid the adverse PFIC tax consequences discussed above if such U.S. Holder, at the close of the first taxable year in which it holds (or is deemed to hold) our Class A ordinary shares, makes a mark-to-market election with respect to such shares for such taxable year. Such U.S. Holder generally will include for each of its taxable years as ordinary income the excess, if any, of the fair market value of its Class A ordinary shares at the end of such year over its adjusted basis in its Class A ordinary shares. The U.S. Holder also will recognize an ordinary loss in respect of the excess, if any, of its adjusted basis of its Class A ordinary shares over the fair market value of its Class A ordinary shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). The U.S. Holder’s basis in its Class A ordinary shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of its Class A ordinary shares will be treated as ordinary income.
The mark-to-market election is available only for “marketable stock,” generally, stock that is regularly traded on a national securities exchange that is registered with the SEC, including Nasdaq (on which we intend to list the Class A ordinary shares), or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. If made, a mark-to-market election would be effective for the taxable year for which the election was made and for all subsequent taxable years unless the ordinary shares ceased to qualify as “marketable stock” for purposes of the PFIC rules or the IRS consented to the revocation of the election. U.S. Holders are urged to consult their tax advisors regarding the availability and tax consequences of a mark-to-market election with respect to our Class A ordinary shares under their particular circumstances.
If we are a PFIC and, at any time, have a foreign subsidiary that is classified as a PFIC, U.S. Holders generally would be deemed to own a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described above if we receive a distribution from, or dispose of all or part of our interest in, the lower-tier PFIC or the U.S. Holders otherwise were deemed to have disposed of an interest in the lower-tier PFIC. Upon written request, we will endeavor to cause any lower-tier PFIC to provide to a U.S. Holder the information that may be required to make or maintain a QEF election with respect to the lower-tier PFIC. There can be no assurance that we will have timely knowledge of the status of any such lower-tier PFIC. In addition, we may not hold a controlling interest in any such lower-tier PFIC and thus there can be no assurance we will be able to cause the lower-tier PFIC to provide such required information. U.S. Holders are urged to consult their tax advisors regarding the tax issues raised by lower-tier PFICs.
A U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder, may have to file an IRS Form 8621 (whether or not a QEF or mark-to-market election is made) and such other
information as may be required by the U.S. Treasury Department. Failure to do so, if required, will extend the statute of limitations until such required information is furnished to the IRS.
The rules dealing with PFICs and with the QEF and mark-to-market elections are very complex and are affected by various factors in addition to those described above. Accordingly, U.S. Holders of our Class A ordinary shares are urged to consult their tax advisors concerning the application of the PFIC rules to our securities under their particular circumstances.
Tax Reporting
Certain U.S. Holders may be required to file an IRS Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation) to report a transfer of property (including cash) to us. Substantial penalties may be imposed on a U.S. Holder that fails to comply with this reporting requirement and the period of limitations on assessment and collection of U.S. federal income taxes will be extended in the event of a failure to comply. Furthermore, certain U.S. Holders who are individuals and certain entities will be required to report information with respect to such U.S. Holder’s investment in “specified foreign financial assets” on IRS Form 8938 (Statement of Specified Foreign Financial Assets), subject to certain exceptions. An interest in the company constitutes a specified foreign financial asset for these purposes. Persons who are required to report specified foreign financial assets and fail to do so may be subject to substantial penalties and the period of limitations on assessment and collection of U.S. federal income taxes will be extended in the event of a failure to comply. Potential investors are urged to consult their tax advisors regarding the foreign financial asset and other reporting obligations and their application to an investment in our Class A ordinary shares.
Non-U.S. Holders
This section applies to you if you are a “Non-U.S. Holder.” As used herein, the term “Non-U.S. Holder” means a beneficial owner of our Class A ordinary shares (other than a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) who or that is for U.S. federal income tax purposes:
▪
a non-resident alien individual;
▪
a foreign corporation; or
▪
an estate or trust that is not a U.S. Holder; but generally does not include an individual who is present in the United States for 183 days or more in the taxable year of disposition. A U.S. Holder who is such an individual are urged to consult its tax advisor regarding the U.S. federal income tax consequences of the sale or other disposition of our securities.
Dividends (including constructive dividends) paid or deemed paid to a Non-U.S. Holder in respect of our Class A ordinary shares generally will not be subject to U.S. federal income tax, unless the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains in the United States). In addition, a Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other taxable disposition of our Class A ordinary shares unless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such holder maintains in the United States).
Dividends (including constructive dividends) and gains that are effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to U.S. federal income tax at the same regular U.S. federal income tax rates applicable to a comparable U.S. Holder and, in the case of a Non-U.S. Holder that is a corporation for U.S. federal income tax purposes, also may be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.
Information Reporting and Backup Withholding
Dividend payments with respect to our Class A ordinary shares and proceeds from the sale, exchange or redemption of our Class A ordinary shares may be subject to information reporting to the IRS and possible U.S. backup withholding. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes other required certifications, or who is otherwise exempt from backup withholding and establishes such exempt status. A Non-U.S. Holder generally will eliminate the
requirement for information reporting and backup withholding by providing certification of its foreign status, under penalties of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a holder’s U.S. federal income tax liability, and a holder generally may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the IRS and furnishing any required information.
The U.S. federal income tax discussion set forth above is included for general information only and may not be applicable depending upon a holder’s particular situation. Holders are urged to consult their tax advisors with respect to the tax consequences to them of the ownership and disposition of our Class A ordinary shares, including the tax consequences under state, local, estate, foreign and other tax laws and tax treaties and the possible effects of changes in U.S. or other tax laws.
UNDERWRITING
Jefferies LLC is acting as the sole book-running manager of the offering. Subject to the terms and conditions set forth in the underwriting agreement between us and Jefferies LLC, we have agreed to sell to Jefferies LLC, and Jefferies LLC has agreed to purchase from us, 15,000,000 Class A ordinary shares.
The underwriting agreement provides that the obligations of the underwriter are subject to certain conditions precedent such as the receipt by the underwriter of officers’ certificates and legal opinions and approval of certain legal matters by its counsel. The underwriting agreement provides that the underwriter will purchase all of the Class A ordinary shares if any of them are purchased. We have agreed to indemnify the underwriter and certain of its controlling persons against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the underwriter may be required to make in respect of those liabilities.
The underwriter has advised us that, following the completion of this offering, they currently intend to make a market in the Class A ordinary shares as permitted by applicable laws and regulations. However, the underwriter is not obligated to do so, and the underwriter may discontinue any market-making activities at any time without notice in its sole discretion. Accordingly, no assurance can be given as to the liquidity of the trading market for the Class A ordinary shares, that you will be able to sell any of the Class A ordinary shares held by you at a particular time or that the prices that you receive when you sell will be favorable.
The underwriter is offering the Class A ordinary shares subject to its acceptance of the Class A ordinary shares from us and subject to prior sale. The underwriter reserves the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part. In addition, the underwriter has advised us that they do not intend to confirm sales to any account over which they exercise discretionary authority.
Commission and Expenses
The underwriter has advised us that they propose to offer the Class A ordinary shares to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers, which may include the underwriter, at that price less a concession not in excess of $ per share. The underwriter may allow, and certain dealers may re-allow, a discount from the concession not in excess of $ per share to certain brokers and dealers. After the offering, the initial public offering price, concession and reallowance to dealers may be reduced by the representative. No such reduction will change the amount of proceeds to be received by us as set forth on the cover page of this prospectus.
The following table shows the public offering price, the underwriting discounts and commissions that we are to pay the underwriter and the proceeds, before expenses, to us in connection with this offering. Such amounts are shown assuming both no exercise and full exercise of the underwriter’s option to purchase additional Class A ordinary shares.
| |
|
|
PAID BY
HEALTHCOR CATALIO
ACQUISITION CORP.
|
|
| |
|
|
NO EXERCISE
|
|
|
FULL EXERCISE
|
|
|
Per Class A ordinary share(1)
|
|
|
|
$ |
0.55 |
|
|
|
|
$ |
0.55 |
|
|
|
Total(1)
|
|
|
|
$ |
8,250,000 |
|
|
|
|
$ |
9,487,500 |
|
|
(1)
$0.20 per share, or $3,000,000 in the aggregate (or $3,450,000 in the aggregate if the underwriter’s option to purchase additional shares is exercised in full), is payable upon the closing of this offering. $0.35 per share, or $5,250,000 in the aggregate (or $6,037,500 in the aggregate if the underwriter’s option to purchase additional shares is exercised in full) payable to the underwriter for deferred underwriting commissions will be placed in a trust account located in the United States as described herein. The deferred commissions will be released to the underwriter only on and concurrently with completion of an initial business combination.
If we do not complete our initial business combination within 24 months from the closing of this offering, the underwriter has agreed that it will forfeit any rights or claims to its deferred underwriting discounts and commissions, including any accrued interest thereon, then in the trust account and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.
We estimate expenses payable by us in connection with this offering, other than the underwriting discounts and commissions referred to above, will be approximately $1,000,000. We have agreed to pay for FINRA-related fees and expenses of the underwriter’s legal counsel, not to exceed $25,000, and have agreed to provide
Jefferies LLC with a right of first refusal to provide investment banking and/or financial advisory services in connection with certain future transactions.
Determination of Offering Price
Prior to this offering, there has not been a public market for our Class A ordinary shares. Consequently, the initial public offering price for our Class A ordinary shares was determined by negotiations between us and the representative. Among the factors considered in these negotiations were the history and prospects of companies whose principal business is the acquisition of other companies, prior offerings of those companies, our management, our capital structure, and currently prevailing general conditions in equity securities markets, including current market valuations of publicly traded companies considered comparable to our company.
We offer no assurances that the initial public offering price will correspond to the price at which the Class A ordinary shares will trade in the public market subsequent to the offering or that an active trading market for the Class A ordinary shares will develop and continue after the offering.
Listing
We have applied to have our public shares listed on Nasdaq under the symbol “HCAQ.”
Stamp Taxes
If you purchase the Class A ordinary shares offered in this prospectus, you may be required to pay stamp taxes and other charges under the laws and practices of the country of purchase, in addition to the offering price listed on the cover page of this prospectus.
Option to Purchase Additional Class A ordinary shares
We have granted to the underwriter an option, exercisable for 45 days from the date of this prospectus, to purchase, from time to time, in whole or in part, up to an aggregate of 2,250,000 Class A ordinary shares from us at the public offering price set forth on the cover page of this prospectus, less underwriting discounts and commissions. If the underwriter exercises this option, each underwriter will be obligated, subject to specified conditions, to purchase a number of additional Class A ordinary shares proportionate to that underwriter’s initial purchase commitment as indicated in the table above. This option may be exercised only if the underwriter sells more Class A ordinary shares than the total number set forth on the cover page of this prospectus.
Letter Agreements
We, our sponsor and our officers and directors have agreed that, for a period of 180 days from the date of this prospectus, we and they will not, without the prior written consent of Jefferies LLC, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, Class A ordinary shares or any other securities convertible into, or exercisable, or exchangeable for, Class A ordinary shares; provided, however, that we may (1) issue and sell the private placement shares, (2) issue and sell the additional Class A ordinary shares to cover our underwriter’s over-allotment option (if any), (3) register with the SEC pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, the resale of the founder shares, and (4) issue securities in connection with an initial business combination. Jefferies LLC in its sole discretion may release any of the securities subject to these lock-up agreements at any time without notice.
Our sponsor and our directors and executive officers have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property (except as described herein under “Principal Shareholders — Transfers of Founder Shares and Private Placement Shares”). Any permitted transferees will be subject to the same restrictions and other agreements of our sponsor and our management team with respect to any founder shares and private placement shares. We refer to such transfer restrictions throughout this prospectus as the lock-up.
The private placement shares will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except pursuant to limited exceptions as described under “Principal Shareholders — Transfers of Founder Shares and Private Placement Shares”).
Stabilization
The underwriter has advised us that they, pursuant to Regulation M under the Exchange Act, and certain persons participating in the offering may engage in short sale transactions, stabilizing transactions, syndicate covering transactions or the imposition of penalty bids in connection with this offering. These activities may have the effect of stabilizing or maintaining the market price of the Class A ordinary shares at a level above that which might otherwise prevail in the open market. Establishing short sales positions may involve either “covered” short sales or “naked” short sales.
“Covered” short sales are sales made in an amount not greater than the underwriter’s option to purchase additional Class A ordinary shares in this offering. The underwriter may close out any covered short position by either exercising its option to purchase additional Class A ordinary shares or purchasing Class A ordinary shares in the open market. In determining the source of Class A ordinary shares to close out the covered short position, the underwriter will consider, among other things, the price of Class A ordinary shares available for purchase in the open market as compared to the price at which they may purchase Class A ordinary shares through the option to purchase additional Class A ordinary shares.
“Naked” short sales are sales in excess of the option to purchase additional Class A ordinary shares. The underwriter must close out any naked short position by purchasing Class A ordinary shares in the open market. A naked short position is more likely to be created if the underwriter is concerned that there may be downward pressure on the price of our Class A ordinary shares in the open market after pricing that could adversely affect investors who purchase in this offering.
A stabilizing bid is a bid for the purchase of Class A ordinary shares on behalf of the underwriter for the purpose of fixing or maintaining the price of the Class A ordinary shares. A syndicate covering transaction is the bid for or the purchase of Class A ordinary shares on behalf of the underwriter to reduce a short position incurred by the underwriter in connection with the offering. Similar to other purchase transactions, the underwriter’s purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our Class A ordinary shares or preventing or retarding a decline in the market price of our Class A ordinary shares. As a result, the price of our Class A ordinary shares may be higher than the price that might otherwise exist in the open market. A penalty bid is an arrangement permitting the underwriter to reclaim the selling concession otherwise accruing to a syndicate member in connection with the offering if the Class A ordinary shares originally sold by such syndicate member are purchased in a syndicate covering transaction and therefore have not been effectively placed by such syndicate member.
Neither we nor any of the underwriter make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our Class A ordinary shares. The underwriter is not obligated to engage in these activities and, if commenced, any of the activities may be discontinued at any time.
The underwriter may also engage in passive market making transactions in our Class A ordinary shares on Nasdaq in accordance with Rule 103 of Regulation M during a period before the commencement of offers or sales of our Class A ordinary shares in this offering and extending through the completion of distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker’s bid, that bid must then be lowered when specified purchase limits are exceeded.
Electronic Distribution
A prospectus in electronic format may be made available by e-mail or on the web sites or through online services maintained by one or more of the underwriter or its affiliates. In those cases, prospective investors may view offering terms online and may be allowed to place orders online. The underwriter may agree with us to allocate a specific number of Class A ordinary shares for sale to online brokerage account holders. Any such allocation for online distributions will be made by the underwriter on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriter’s web sites and any information contained in any other web site maintained by the underwriter is not part of this prospectus, has not been approved and/or endorsed by us or the underwriter and should not be relied upon by investors.
Other Activities and Relationships
We are not under any contractual obligation to engage the underwriter to provide any services for us after this offering, and have no present intent to do so. However, the underwriter may introduce us to potential target businesses or assist us in raising additional capital in the future, including by acting as a placement agent in a private offering or underwriting or arranging debt financing. If the underwriter provides services to us after this offering, we may pay such underwriter fair and reasonable fees that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with the underwriter and no fees for such services will be paid to the underwriter prior to the date that is 60 days from the date of this prospectus, unless FINRA determines that such payment would not be deemed underwriter’s compensation in connection with this offering and we may pay the underwriter of this offering or any entity with which it is affiliated a finder’s fee or other compensation for services rendered to us in connection with the completion of a business combination. Any fees we may pay the underwriter or its affiliates for services rendered to us after this offering may be contingent on the completion of a business combination and may include non-cash compensation. The underwriter or its affiliates that provide these services to us may have a potential conflict of interest given that the underwriter is entitled to the deferred portion of its underwriting compensation for this offering only if an initial business combination is completed within the specified timeframe.
The underwriter and certain of its affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriter and certain of its affiliates have, from time to time, performed, and may in the future perform, various commercial and investment banking and financial advisory services for us and our affiliates, for which they received or will receive customary fees and expenses.
In the ordinary course of their various business activities, the underwriter and certain of its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments issued by us and our affiliates. The underwriter and certain of its affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Selling Restrictions
Cayman Islands
No offer or invitation, whether directly or indirectly, may be made to the public in the Cayman Islands to subscribe for our securities.
Canada
Resale Restrictions
The distribution of the securities in Canada is being made only in the provinces of Ontario, Quebec, Alberta and British Columbia on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of these securities are made. Any resale of the securities in Canada must be made under applicable securities laws which may vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the securities.
Representations of Canadian Purchasers
By purchasing the securities in Canada and accepting delivery of a purchase confirmation, a purchaser is representing to us and the dealer from whom the purchase confirmation is received that:
▪
the purchaser is entitled under applicable provincial securities laws to purchase the securities without the benefit of a prospectus qualified under those securities laws as it is an “accredited investor” as defined under National Instrument 45-106 — Prospectus Exemptions,
▪
the purchaser is a “permitted client” as defined in National Instrument 31-103 — Registration Requirements, Exemptions and Ongoing Registrant Obligations,
▪
where required by law, the purchaser is purchasing as principal and not as agent, and
▪
the purchaser has reviewed the text above under Resale Restrictions.
Conflicts of Interest
Canadian purchasers are hereby notified that the underwriter is relying on the exemption set out in section 3A.3 or 3A.4, if applicable, of National Instrument 33-105 — Underwriting Conflicts from having to provide certain conflict of interest disclosure in this document.
Statutory Rights of Action
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if the prospectus (including any amendment thereto) such as this document contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser of these securities in Canada should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Enforcement of Legal Rights
All of our directors and officers as well as the experts named herein may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.
Taxation and Eligibility for Investment
Canadian purchasers of the securities should consult their own legal and tax advisors with respect to the tax consequences of an investment in the securities in their particular circumstances and about the eligibility of the securities for investment by the purchaser under relevant Canadian legislation.
Australia
This prospectus is not a disclosure document for the purposes of Australia’s Corporations Act 2001 (Cth) of Australia, or Corporations Act, has not been lodged with the Australian Securities & Investments Commission and is only directed to the categories of exempt persons set out below. Accordingly, if you receive this prospectus in Australia:
You confirm and warrant that you are either:
▪
a “sophisticated investor” under section 708(8)(a) or (b) of the Corporations Act;
▪
a “sophisticated investor” under section 708(8)(c) or (d) of the Corporations Act and that you have provided an accountant’s certificate to the company which complies with the requirements of section 708(8)(c)(i) or (ii) of the Corporations Act and related regulations before the offer has been made;
▪
a person associated with the company under Section 708(12) of the Corporations Act; or
▪
a “professional investor” within the meaning of section 708(11)(a) or (b) of the Corporations Act.
To the extent that you are unable to confirm or warrant that you are an exempt sophisticated investor, associated person or professional investor under the Corporations Act any offer made to you under this prospectus is void and incapable of acceptance.
You warrant and agree that you will not offer any of the securities issued to you pursuant to this prospectus for resale in Australia within 12 months of those securities being issued unless any such resale offer is exempt from the requirement to issue a disclosure document under section 708 of the Corporations Act.
European Economic Area
In relation to each Member State of the European Economic Area (each a “Member State”), no securities have been offered or will be offered pursuant to this offering to the public in that Member State prior to the publication of a prospectus in relation to the securities which has been approved by the competent authority in that Member State or, where appropriate, approved in another Member State and notified to the competent
authority in that Member State, all in accordance with the Prospectus Regulation, except that offers of securities may be made to the public in that Member State at any time under the following exemptions under the Prospectus Regulation:
(a)
to any legal entity which is a qualified investor as defined under the Prospectus Regulation;
(b)
to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation), subject to obtaining the prior consent of the underwriter for any such offer; or
(c)
in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
provided that no such offer of securities shall require the issuer or any manager to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
For the purposes of this provision, the expression an “offer to the public” in relation to any securities in any Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any securities to be offered so as to enable an investor to decide to purchase or subscribe for any securities, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129, as amended.
Hong Kong
No securities have been offered or sold, and no securities may be offered or sold, in Hong Kong, by means of any document, other than to persons whose ordinary business is to buy or sell shares or debentures, whether as principal or agent; or to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (“SFO”) and any rules made under that Ordinance; or in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong (“CO”) or which do not constitute an offer or invitation to the public for the purpose of the CO or the SFO. No document, invitation or advertisement relating to the securities has been issued or may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted under the securities laws of Hong Kong) other than with respect to securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the SFO and any rules made under that Ordinance.
This prospectus has not been registered with the Registrar of Companies in Hong Kong. Accordingly, this prospectus may not be issued, circulated or distributed in Hong Kong, and the securities may not be offered for subscription to members of the public in Hong Kong. Each person acquiring the securities will be required, and is deemed by the acquisition of the securities, to confirm that he is aware of the restriction on offers of the securities described in this prospectus and the relevant offering documents and that he is not acquiring, and has not been offered any securities in circumstances that contravene any such restrictions.
Israel
This document does not constitute a prospectus under the Israeli Securities Law, 5728-1968, or the Securities Law, and has not been filed with or approved by the Israel Securities Authority. In Israel, this prospectus is being distributed only to, and is directed only at, and any offer of the Class A ordinary shares is directed only at, (i) a limited number of persons in accordance with the Israeli Securities Law and (ii) investors listed in the first addendum, or the Addendum, to the Israeli Securities Law, consisting primarily of joint investment in trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange, underwriters, venture capital funds, entities with equity in excess of NIS 50,000,000 and “qualified individuals,” each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors (in each case, purchasing for their own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in the Addendum). Qualified investors are required to submit written confirmation that they fall within the scope of the Addendum, are aware of the meaning of same and agree to it.
Japan
The offering has not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948 of Japan, as amended), or FIEL, and the Initial Purchaser will not offer or sell any
securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the FIEL and any other applicable laws, regulations and ministerial guidelines of Japan.
Singapore
This prospectus has not been and will not be lodged or registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the securities may not be circulated or distributed, nor may the securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the securities are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
▪
a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
▪
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the securities pursuant to an offer made under Section 275 of the SFA except:
▪
to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
▪
where no consideration is or will be given for the transfer;
▪
where the transfer is by operation of law;
▪
as specified in Section 276(7) of the SFA; or
▪
as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore.
Switzerland
The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This prospectus has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this prospectus nor any other offering or marketing material relating to the securities or the offering may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this prospectus nor any other offering or marketing material relating to the offering, the company or the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this prospectus will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA, and the offer of securities has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of securities.
United Kingdom
In relation to the United Kingdom, no securities have been offered or will be offered pursuant to this offering to the public in the United Kingdom prior to the publication of a prospectus in relation to the securities that
either (i) has been approved by the Financial Conduct Authority in accordance with the transitional provisions in Regulation 74 of the Prospectus (Amendment etc.) (EU exit) Regulations 2019, except that offers of securities may be made to public in the United Kingdom at any time under the following exemptions under Regulation (EU) 2017/1129, as amended, as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the “UK Prospectus Regulation”):
a.
to any legal entity which is a qualified investor as defined under the UK Prospectus Regulation;
b.
to fewer than 150 natural or legal persons (other than qualified investors as defined under the UK Prospectus Regulation), subject to obtaining the prior consent of the underwriter for any such offer; or
c.
in any other circumstances falling within section 86 of the Financial Services and Markets Act 2000 (as amended, the “FSMA”),
provided that no such offer of securities shall require the issuer or the underwriter to publish a prospectus pursuant to section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.
For the purposes of this provision, the expression an “offer to the public” in relation to any securities in the United Kingdom means the communication in any form and by any means of sufficient information on the terms of the offer and any securities to be offered so as to enable an investor to decide to purchase or subscribe for any securities.
In the United Kingdom, this prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the UK Prospectus Regulation who are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) and/or (ii) high net worth entities or other persons falling within Article 49(2)(a) to (d) of the Order; or (iii) other persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons being referred to as “relevant persons”).
LEGAL MATTERS
Kirkland & Ellis LLP, New York, New York is acting as United States counsel in connection with the registration of our Class A ordinary shares under the Securities Act. Maples and Calder will pass upon the validity of the securities offered in this prospectus with respect to the Class A ordinary shares and matters of Cayman Islands law. In connection with this offering, Paul Hastings LLP, New York, New York advised the underwriter in connection with the offering of the Class A ordinary shares.
EXPERTS
The financial statements of HealthCor Catalio Acquisition Corp. as of November 24, 2020 and for the period from November 18, 2020 (inception) through November 24, 2020 appearing in this prospectus have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report thereon (which contains an explanatory paragraph relating to substantial doubt about the ability of HealthCor Catalio Acquisition Corp. to continue as a going concern as described in Note 1 to the financial statements), appearing elsewhere in this prospectus, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the securities we are offering by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information about us and our securities, you should refer to the registration statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.
Upon completion of this offering, we will be subject to the information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at www.sec.gov.
INDEX TO FINANCIAL STATEMENTS
| |
|
|
Page
|
|
| Audited Financial Statements for HealthCor Catalio Acquisition Corp.: |
|
|
|
|
|
|
|
|
F-2
|
|
|
|
|
|
|
|
|
F-3
|
|
|
|
|
|
|
|
|
F-4
|
|
|
|
|
|
|
|
|
F-5
|
|
|
|
|
|
|
|
|
F-6
|
|
|
|
|
|
|
|
|
F-7
|
|
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholder and the Board of Directors of
HealthCor Catalio Acquisition Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of HealthCor Catalio Acquisition Corp. (the “Company”) as of November 24, 2020 and the related statements of operations, changes in shareholder’s equity and cash flows for the period from November 18, 2020 (inception) through November 24, 2020 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of November 24, 2020 and the results of its operations and its cash flows for the period from November 18, 2020 (inception) through November 24, 2020, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph — Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 to the financial statements, the Company’s ability to execute its business plan is dependent upon its completion of the proposed initial public offering described in Note 3 to the financial statements. The Company has a working capital deficiency as of November 24, 2020 and lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans about these matters are also described in Notes 1 and 3. The financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Marcum LLP
Marcum LLP
We have served as the Company’s auditor since 2020.
New York, NY
December 9, 2020, except for the second paragraph of Note 8, as to which the date is January 19, 2021
HEALTHCOR CATALIO ACQUISITION CORP.
BALANCE SHEET
NOVEMBER 24, 2020
| |
ASSETS |
|
|
|
|
|
|
|
| |
Deferred offering costs
|
|
|
|
$ |
50,000 |
|
|
| |
Total Assets
|
|
|
|
$ |
50,000 |
|
|
| |
LIABILITIES AND SHAREHOLDER’S EQUITY |
|
|
|
|
|
|
|
| |
Current liabilities:
|
|
|
|
|
|
|
|
| |
Accrued offering costs
|
|
|
|
$ |
30,000 |
|
|
| |
Total Current Liabilities
|
|
|
|
|
30,000 |
|
|
| |
Commitments |
|
|
|
|
|
|
|
| |
Shareholder’s Equity |
|
|
|
|
|
|
|
| |
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and
outstanding
|
|
|
|
|
— |
|
|
| |
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued and outstanding
|
|
|
|
|
— |
|
|
| |
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 4,312,500 shares issued and outstanding(1)
|
|
|
|
|
431 |
|
|
| |
Additional paid-in capital
|
|
|
|
|
24,569 |
|
|
| |
Accumulated deficit
|
|
|
|
|
(5,000) |
|
|
| |
Total Shareholder’s Equity
|
|
|
|
|
20,000 |
|
|
| |
Total Liabilities and Shareholder’s Equity
|
|
|
|
$ |
50,000 |
|
|
| |
(1)
Includes an aggregate of up to 562,500 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5).
The accompanying notes are an integral part of these financial statements.
HEALTHCOR CATALIO ACQUISITION CORP.
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM NOVEMBER 18, 2020 (INCEPTION) THROUGH NOVEMBER 24, 2020
| |
Formation costs
|
|
|
|
$ |
5,000 |
|
|
| |
Net Loss
|
|
|
|
$ |
(5,000) |
|
|
| |
Weighted average shares outstanding, basic and diluted(1)
|
|
|
|
|
3,750,000 |
|
|
| |
Basic and diluted net loss per share
|
|
|
|
$ |
(0.00) |
|
|
| |
(1)
Excludes an aggregate of up to 562,500 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5).
The accompanying notes are an integral part of these financial statements.
HEALTHCOR CATALIO ACQUISITION CORP.
STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY
FOR THE PERIOD FROM NOVEMBER 18, 2020 (INCEPTION) THROUGH NOVEMBER 24, 2020
| |
|
|
Class B
Ordinary Shares(1)
|
|
|
Additional
Paid-In
Capital
|
|
|
Accumulated
Deficit
|
|
|
Total
Shareholder’s
Equity
|
|
| |
Shares
|
|
|
Amount
|
|
|
Balance — November 18, 2020
(inception)
|
|
|
|
|
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
Issuance of Class B ordinary shares to Sponsor (1)
|
|
|
|
|
4,312,500 |
|
|
|
|
|
431 |
|
|
|
|
|
24,569 |
|
|
|
|
|
— |
|
|
|
|
|
25,000 |
|
|
|
Net loss
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
(5,000) |
|
|
|
|
|
(5,000) |
|
|
|
Balance — November 24, 2020
|
|
|
|
|
4,312,500 |
|
|
|
|
$ |
431 |
|
|
|
|
$ |
24,569 |
|
|
|
|
$ |
(5,000) |
|
|
|
|
$ |
20,000 |
|
|
| |
(1)
Includes an aggregate of up to 562,500 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 7).
The accompanying notes are an integral part of these financial statements.
HEALTHCOR CATALIO ACQUISITION CORP.
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM NOVEMBER 18, 2020 (INCEPTION) THROUGH NOVEMBER 24, 2020
| |
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
| |
Net loss
|
|
|
|
$ |
(5,000) |
|
|
| |
Adjustment to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
| |
Payment of formation costs through issuance of Class B ordinary shares
|
|
|
|
|
5,000 |
|
|
| |
Net cash used in operating activities
|
|
|
|
|
— |
|
|
| |
Net Change in Cash
|
|
|
|
|
— |
|
|
| |
Cash — beginning of the period
|
|
|
|
|
— |
|
|
| |
Cash — end of the period
|
|
|
|
$ |
— |
|
|
| |
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
| |
Offering costs included in accrued offering costs
|
|
|
|
$ |
30,000 |
|
|
| |
Deferred offering costs paid directly by Sponsor in exchange for issuance of Class B ordinary shares
|
|
|
|
$ |
20,000 |
|
|
| |
The accompanying notes are an integral part of these financial statements.
HEALTHCOR CATALIO ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 — ORGANIZATION AND PLAN OF BUSINESS OPERATIONS
HealthCor Catalio Acquisition Corp. (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on November 18, 2020. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (“Business Combination”).
Although the Company is not limited to a particular industry or geographic region for purposes of completing a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of November 24, 2020, the Company had not commenced any operations. All activity for the period from November 18, 2020 (inception) through November 24, 2020 relates to the Company’s formation and the proposed initial public offering (“Proposed Public Offering”), which is described below. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Proposed Public Offering. The Company has selected December 31 as its fiscal year end.
The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a Proposed Public Offering of 15,000,000 Class A ordinary shares (the “Public Shares”) at $10.00 per Public Share (or 17,250,000 Public Shares if the underwriters’ over-allotment option is exercised in full), which is discussed in Note 3, and the sale of 500,000 shares (or 545,000 shares if the underwriters’ over-allotment option is exercised on full) (the “Private Placement Shares”) at a price of $10.00 per Private Placement Share in a private placement to HC Sponsor LLC (the “Sponsor”), that will close simultaneously with the Proposed Public Offering.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Public Offering and the sale of the Private Placement Shares, although substantially all of the net proceeds are intended to be applied generally toward completing a Business Combination. The Company must complete its initial Business Combination with one or more target businesses that together have a fair market value equal to at least 80% of the net assets held in the Trust Account (as defined below) (excluding deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect a Business Combination. Upon the closing of the Proposed Public Offering, management has agreed that $10.00 per Public Share sold in the Proposed Public Offering, including proceeds of the sale of the Private Placement Shares, will be held in a trust account (“Trust Account”) and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting certain conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.
The Company will provide its shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The shareholders will be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account (initially $10.00 per share), calculated as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. The Class A ordinary shares will be recorded
HEALTHCOR CATALIO ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
at redemption value and classified as temporary equity upon the completion of the Proposed Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
If the Company seeks shareholder approval in connection with a Business Combination, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who vote at a general meeting of the Company. If a shareholder vote is not required under applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5), its Private Placement Shares (as defined in Note 5), and any Public Shares purchased in or after the Proposed Public Offering in favor of approving a Business Combination and to waive its redemption rights with respect to any such shares in connection with a shareholder vote to approve a Business Combination. However, in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. Additionally, each public shareholder may elect to redeem its Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares without the Company’s prior written consent.
The Sponsor has agreed (a) to waive its redemption rights with respect to any Founder Shares, Private Placement Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the public shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The Company will have until 24 months from the closing of the Proposed Public Offering (the “Combination Period”) to complete a Business Combination. If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than 10 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 (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), and (ii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
The Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the Proposed Public Offering, such Public Shares will be entitled to liquidating
HEALTHCOR CATALIO ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Proposed Public Offering price per Public Share ($10.00).
The Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a third party for services rendered or products sold to the Company, or by a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Proposed Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (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. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent public accountants), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Going Concern Consideration
At November 24, 2020, the Company had no cash and a working capital deficit of $30,000. The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management plans to address this uncertainty through a Proposed Public Offering as discussed in Note 3. There is no assurance that the Company’s plans to raise capital or to consummate a Business Combination will be successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging growth company
The Company is 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”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations
HEALTHCOR CATALIO ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
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 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 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 Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and cash equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of November 24, 2020.
Deferred offering costs
Deferred offering costs consist of legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to shareholder’s equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses incurred, will be charged to operations.
Income taxes
The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of
HEALTHCOR CATALIO ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
November 24, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Net loss per share
Net loss per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 562,500 Class B ordinary shares that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Note 7). At November 24, 2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.
Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Fair value of financial instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Recently issued accounting standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
NOTE 3 — PROPOSED PUBLIC OFFERING
Pursuant to the Proposed Public Offering, the Company will offer for sale up to 15,000,000 Class A ordinary shares (or 17,250,000 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full) at a purchase price of $10.00 per share.
NOTE 4 — PRIVATE PLACEMENT
The Sponsor has committed to purchase an aggregate of 500,000 Private Placement Shares (or 545,000 Private Placement Shares if the underwriters’ over-allotment is exercised in full) at a price of $10.00 per Private Placement Share, for an aggregate purchase price of $5,000,000 (or $5,450,000, if the underwriters’ over-allotment option is exercised in full) from the Company in a private placement that will occur simultaneously with the closing of the Proposed Public Offering. The proceeds from the sale of the Private Placement Shares will be added to the net proceeds from the Proposed Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Shares held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Shares will be worthless.
NOTE 5 — RELATED PARTY TRANSACTIONS
Founder Shares
On November 24, 2020, the Sponsor paid $25,000 to cover certain offering and formation costs of the Company in consideration for 4,312,500 shares of Class B ordinary shares (the “Founder Shares”). The Founder
HEALTHCOR CATALIO ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
Shares include an aggregate of up to 562,500 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the number of Founder Shares will collectively represent 20% of the Company’s issued and outstanding shares (excluding the Private Placement Shares and assuming the initial shareholders do not purchase any Public Shares in the Proposed Public Offering) upon the completion of the Proposed Public Offering.
The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination; and (B) subsequent to a Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.
Promissory Note — Related Party
On November 23, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $300,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) March 31, 2021 or (i) the consummation of the Proposed Public Offering. As of November 24, 2020, there were no amounts outstanding under the Promissory Note.
Administrative Services Agreement
The Company intends to enter into an agreement, commencing on date that the Company’s securities are first listed on the Nasdaq through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay the Sponsor a total of up to $10,000 per month for office space, secretarial and administrative services.
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the initial shareholders or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into shares of the post-Business Combination entity at a price of $10.00 per share. The shares would be identical to the Private Placement Shares.
Forward Purchase Arrangement
The Sponsor has indicated an interest to purchase up to an aggregate of $25 million of the Company’s Class A ordinary shares in a private placement that would occur concurrently with the consummation of the initial Business Combination. However, because indications of interest are not binding agreements or commitments to purchase, the Sponsor may determine not to purchase any such shares, or to purchase fewer shares than it has indicated an interest in purchasing. Furthermore, the Company is not under any obligation to sell any such shares.
HEALTHCOR CATALIO ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 6 — COMMITMENTS
Registration and Shareholder Rights
The holders of the Founder Shares and Private Placement Shares, including the Private Placement Shares that may be issued upon conversion of the Working Capital Loans, will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of the Proposed Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company will grant the underwriters a 45-day option to purchase up to 2,250,000 additional Class A ordinary shares to cover over-allotments at the Proposed Public Offering price, less the underwriting discounts and commissions.
The underwriters will be entitled to a cash underwriting discount of $0.20 per share, or $3,000,000 in the aggregate (or $3,450,000 if the underwriters’ over-allotment is exercised in full), payable upon the closing of the Proposed Public Offering. In addition, the underwriters will be entitled to a deferred fee of $0.35 per share, or $5,250,000 in the aggregate (or $6,037,500 if the underwriters’ over-allotment is exercised in full). The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
NOTE 7 — SHAREHOLDER’S EQUITY
Preference Shares — The Company is authorized to issue 5,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At November 24, 2020, there were no preference shares issued or outstanding.
Class A Ordinary Shares — The Company is authorized to issue 500,000,000 Class A ordinary shares, with a par value of $0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share. At November 24, 2020, there were no Class A ordinary shares issued or outstanding.
Class B Ordinary Shares — The Company is authorized to issue 50,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class B ordinary shares are entitled to one vote for each share. At November 24, 2020, there were 4,312,500 Class B ordinary shares issued and outstanding, of which an aggregate of up to 562,500 shares are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part so that the number of Founder Shares will equal 20% of the Company’s issued and outstanding ordinary shares after the Proposed Public Offering (excluding the Private Placement Shares and assuming the initial shareholders do not purchase any shares in the Proposed Public Offering).
Only holders of the Class B ordinary shares will have the right to vote on the appointment of directors prior to the Business Combination. Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of the Company’s shareholders except as otherwise required by law.
The Founder Shares will automatically convert into Class A ordinary shares on the day of the closing of an initial Business Combination at a ratio such that the number of Class A ordinary shares issuable upon conversion
HEALTHCOR CATALIO ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding (excluding the Private Placement Shares) upon completion of this offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Shares issued to the Sponsor, members of the Company’s management team or any of the Company’s affiliates upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.
NOTE 8 — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, except as noted below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
As of January 19, 2021, the Company had drawn an aggregate amount of $57,195 on the Promissory Note.
15,000,000 CLASS A ORDINARY SHARES
HealthCor Catalio Acquisition Corp.
PRELIMINARY PROSPECTUS
, 2021
Sole Book-Running Manager
Jefferies
Until , 2021 (25 days after the date of this prospectus), all dealers that buy, sell or trade our ordinary shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriter and with respect to their unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions) will be as follows:
| |
SEC/FINRA expenses
|
|
|
|
$ |
45,000 |
|
|
| |
Accounting fees and expenses
|
|
|
|
|
60,000 |
|
|
| |
Printing and engraving expenses
|
|
|
|
|
35,000 |
|
|
| |
Travel and road show expenses
|
|
|
|
|
20,000 |
|
|
| |
Legal fees and expenses
|
|
|
|
|
325,000 |
|
|
| |
Nasdaq listing and filing fees
|
|
|
|
|
75,000 |
|
|
| |
Director & Officers liability insurance premiums(1)
|
|
|
|
|
350,000 |
|
|
| |
Miscellaneous
|
|
|
|
|
90,000 |
|
|
| |
Total
|
|
|
|
$ |
1,000,000 |
|
|
| |
(1)
This amount represents the approximate amount of annual director and officer liability insurance premiums the registrant anticipates paying following the completion of its initial public offering and until it completes a business combination.
Item 14. Indemnification of Directors and Officers.
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association will provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We may purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
Our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Item 15. Recent Sales of Unregistered Securities.
On November 24 2020, we issued to HC Sponsor LLC, our sponsor, 4,312,500 of our Class B ordinary shares, in exchange for a capital contribution of $25,000, or approximately $0.006 per share. In December 2020, our sponsor transferred 35,000 Class B ordinary shares to each of Dr. Wolfgang and Mr. Weinstein for their service as independent directors. In January 2021, our sponsor transferred 35,000 Class B ordinary shares to Mr. Harris for his service as an independent director. These 105,000 founder shares are not subject to forfeiture in the event the underwriter's over-allotment option is not exercised. Such securities were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D. Each of the equity holders in our sponsor is an accredited investor under Rule 501 of Regulation D. The sole business of HC Sponsor LLC is to act as the company’s sponsor in connection with this offering.
Our sponsor has committed, pursuant to a written agreement, to purchase 500,000 Class A ordinary shares (or 545,000 Class A ordinary shares if the underwriter’s over-allotment option is exercised in full) at a price of $10.00 per share, in a private placement to occur concurrently with the closing of this offering for an aggregate purchase price of $5,000,000 (or $5,450,000 if the over-allotment option is exercised in full) that will close simultaneously with the closing of this offering. These issuances will be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
No underwriting discounts or commissions were paid with respect to such sales.
Item 16. Exhibits and Financial Statement Schedules.
(a)
The Exhibit Index is incorporated herein by reference.
Item 17. Undertakings.
(a)
The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
(b)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(c)
The undersigned registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2)
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
EXHIBIT INDEX
*
Filed herewith.
**
Previously filed.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 19th day of January, 2021.
HEALTHCOR CATALIO ACQUISITION CORP.
By:
/s/ Christopher Gaulin
Name:
Christopher Gaulin
Title:
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
| |
NAME
|
|
|
POSITION
|
|
|
DATE
|
|
| |
/s/ Christopher Gaulin
Christopher Gaulin
|
|
|
Chief Executive Officer and Director
(Principal Executive Officer)
|
|
|
January 19, 2021
|
|
| |
*
Christine Clarke
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
|
January 19, 2021
|
|
| |
*
Joseph Healey
|
|
|
Director (Chairman)
|
|
|
January 19, 2021
|
|
| |
*By:
/s/ Christopher Gaulin
Christopher Gaulin
Attorney-in-Fact
|
|
|
|
|
|
|
|
Exhibit 1.1
15,000,000 Class A Ordinary Shares
HealthCor Catalio Acquisition Corp.
UNDERWRITING AGREEMENT
________ __, 2021
JEFFERIES LLC
As Representative of the several Underwriters
c/o JEFFERIES LLC
520 Madison Avenue
New York, NY 10022
Ladies and Gentlemen:
Introductory.
HealthCor Catalio Acquisition Corp., a Cayman Islands exempted company (the “Company”), proposes, upon the terms
and subject to the conditions set forth in this agreement (this “Agreement”), to issue and sell to the several
underwriters listed on Schedule A hereto (the “Underwriters”) an aggregate of 15,000,000 Class A ordinary
shares, par value $0.0001 per share, of the Company (the “Class A Ordinary Shares”). The 15,000,000
Class A Ordinary Shares to be sold by the Company are called the “Firm Securities.” In addition, the Company
has granted to the Underwriters an option to purchase up to an additional 2,250,000 Class A Ordinary Shares as provided
in Section 2. The additional 2,250,000 Class A Ordinary Shares to be sold by the Company pursuant to such option
are collectively called the “Optional Securities.” The Firm Securities and, if and to the extent such option
is exercised, the Optional Securities are collectively called the “Offered Securities.” Jefferies LLC (“Jefferies”)
has agreed to act as the representative of the several Underwriters (in such capacity, the “Representative”)
in connection with the offering of the Offered Securities for sale to the public as contemplated in the Prospectus (as defined
below) (the “Offering”). To the extent there are no additional underwriters listed on Schedule A hereto, the
term “Representative” as used herein shall mean you, as Underwriter, and the term “Underwriters” shall
mean either the singular or the plural, as the context requires.
As used herein, the term “Business
Combination” (as described more fully in the Registration Statement (as defined below)) shall mean a merger, share
exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities.
The Company has prepared and filed with
the Commission a registration statement on Form S-1, File No. 333-252002 which contains a form of prospectus to be used
in connection with the Offering and sale of the Offered Securities. Such registration statement, as amended, including the financial
statements, exhibits and schedules thereto, in the form in which it became effective under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (collectively, the “Securities Act”), including
any information deemed to be a part thereof at the time of effectiveness pursuant to Rule 430A under the Securities Act, is
called the “Registration Statement.” Any registration statement filed by the Company pursuant to Rule 462(b) under
the Securities Act in connection with the offer and sale of the Offered Securities is called the “Rule 462(b) Registration
Statement,” and from and after the date and time of filing of any such Rule 462(b) Registration Statement the
term “Registration Statement” shall include the Rule 462(b) Registration Statement. The prospectus, in the
form first used by the Underwriters to confirm sales of the Offered Securities or in the form first made available to the Underwriters
by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act, is called the “Prospectus.”
The preliminary prospectus dated [____], 2021 describing the Offered Securities and the Offering thereof is called the “Preliminary
Prospectus,” and the Preliminary Prospectus and any other prospectus in preliminary form that describes the Offered Securities
and the Offering thereof and is used prior to the filing of the Prospectus is called a “preliminary prospectus.”
As used herein, “Applicable Time” is [____] [a.m.][p.m.] (New York City time) on [_______ __], 2021. As
used herein, “Effective Date” means the date and time at which the Registration Statement, or the most recent
post-effective amendment thereto, was declared effective by the Commission in accordance with the rules and regulations under
the Securities Act. As used herein, “free writing prospectus” has the meaning set forth in Rule 405 under
the Securities Act, and “Time of Sale Prospectus” means the Preliminary Prospectus together with the Time of
Delivery Information, if any, set forth on Schedule B hereto. As used herein, “Road Show” means
a “road show” (as defined in Rule 433 under the Securities Act) relating to the Offering contemplated hereby that
is a “written communication” (as defined in Rule 405 under the Securities Act). As used herein, “Section 5(d) Written
Communication” means each written communication (within the meaning of Rule 405 under the Securities Act) that is
made in reliance on Section 5(d) of the Securities Act by the Company or any person authorized to act on behalf of the
Company to one or more potential investors that are qualified institutional buyers (“QIBs”) and/or institutions
that are accredited investors (“IAIs”), as such terms are respectively defined in Rule 144A and Rule 501(a) under
the Securities Act, to determine whether such investors might have an interest in the Offering; “Section 5(d) Oral
Communication” means each oral communication, if any, made in reliance on Section 5(d) of the Securities Act
by the Company or any person authorized to act on behalf of the Company made to one or more QIBs and/or one or more IAIs to determine
whether such investors might have an interest in the Offering; “Marketing Materials” means any materials or
information provided to investors by, or with the approval of, the Company in connection with the marketing of the Offering, including
any Road Show or investor presentations made to investors by the Company (whether in person or electronically); and “Permitted
Section 5(d) Communication” means the Section 5(d) Written Communication(s) and Marketing Materials
listed on Schedule C attached hereto.
All references in this Agreement to the
Registration Statement, any preliminary prospectus (including the Preliminary Prospectus), or the Prospectus, or any amendments
or supplements to any of the foregoing shall include any copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System (“EDGAR”).
The Company has entered into a Securities
Subscription Agreement, dated November 23, 2020 (the “Subscription Agreement”), with HC Sponsor, LLC, a
Cayman Islands limited liability company (the “Sponsor”), in substantially the form filed as Exhibit 10.7
to the Registration Statement, pursuant to which the Sponsor purchased an aggregate of 4,312,500 Class B ordinary shares
for an aggregate purchase price of $25,000, or approximately $0.006 per share (such Class B ordinary shares outstanding
as of the date hereof, including the Class A Ordinary Shares issuable upon conversion thereof, the “Founder Shares”).
The Founder Shares are substantially similar to the Class A Ordinary Shares except as described in the Prospectus.
Prior to the First Closing Date (as defined
below), the Sponsor will subscribe to purchase an aggregate of 500,000 Class A Ordinary Shares (or up to 545,000 Class A
Ordinary Shares if the option to purchase additional Class A Ordinary Shares as provided in Section 2 is exercised in
full) (the “Private Placement Shares”), and the Company will enter into a Private Placement Shares Purchase
Agreement with the Sponsor (the “Private Placement Purchase Agreement”) in substantially the form filed as Exhibit 10.3
to the Registration Statement. Except as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus,
the Private Placement Shares have the same terms as the Firm Securities.
The Company has entered into an Investment
Management Trust Agreement, dated as of the date hereof, with Continental Stock Transfer & Trust Company (“CST”),
as trustee, in substantially the form filed as Exhibit 10.1 to the Registration Statement (the “Trust Agreement”),
pursuant to which proceeds from the sale of the Private Placement Shares and proceeds from the Offering and sale of the Offered
Securities will be deposited and held in a trust account (the “Trust Account”) for the benefit of the Company,
the Underwriters and the holders of the Firm Securities and the Optional Securities, if and when issued.
The Company has issued a non-interest bearing,
unsecured promissory note for an aggregate amount of up to $300,000 to the Sponsor in substantially the form filed as Exhibit 10.6
to the Registration Statement (the “Promissory Note”), in exchange for the payment of the equivalent amount
by the Sponsor to the Company. These monies have been used to cover expenses relating to the Offering. The Promissory Note will
be payable on the earlier to occur of March 31, 2021 or the date of the consummation of the Offering.
The Company will enter into a Registration
and Shareholder Rights Agreement, dated as of the date hereof, with the Sponsor and the other parties thereto, in substantially
the form filed as Exhibit 10.2 to the Registration Statement (the “Registration and Shareholder Rights Agreement”),
pursuant to which the Company will grant certain registration rights in respect of the Founder Shares, the Private Placement Shares,
any Class A Ordinary Shares issued upon the conversion of working capital loans by the Sponsor, the Company’s officers
and directors or their respective affiliates, to the Company (the “Working Capital Shares”) and the Class A
Ordinary Shares issuable upon conversion of the Founder Shares.
The Company has entered into an Administrative
Services Agreement, dated as of the date hereof, with the Sponsor, in substantially the form filed as Exhibit 10.5 to the
Registration Statement (the “Administrative Services Agreement”), pursuant to which the Company will pay
to the Sponsor an aggregate monthly fee of up to $10,000 for office space, secretarial and administrative services from the Effective
Date until the earlier of the consummation of the initial Business Combination and the Liquidation (as defined below).
The Company has entered into letter agreements,
each dated as of the date hereof, with the Sponsor and with each of the Company’s executive officers and directors, in substantially
the forms filed as Exhibit 10.8 and Exhibit 10.9, respectively, to the Registration Statement (the “Insider
Letter”).
The Company hereby confirms its agreements
with the Underwriters as follows:
Section 1. Representations
and Warranties of the Company.
The Company hereby represents, warrants
and covenants to each Underwriter, as of the date of this Agreement, as of the First Closing Date (as defined below) and for the
period from the First Closing Date through and as of each Option Closing Date (as defined below), if any, as follows:
(a) Compliance
with Registration Requirements. The Registration Statement has become effective under the Securities Act. The Company
has complied, to the Commission’s satisfaction with all requests of the Commission for additional or supplemental information,
if any. No stop order suspending the effectiveness of the Registration Statement is in effect and no proceedings for such purpose
have been instituted or are pending or, to the knowledge of the Company, are contemplated or threatened by the Commission.
(b) Disclosure.
Each preliminary prospectus and the Prospectus when filed complied in all material respects with the Securities Act and, if filed
by electronic transmission pursuant to EDGAR, was identical (except as may be permitted by Regulation S- T under the Securities
Act) to the copy thereof delivered to the Underwriters for use in connection with the offer and sale of the Offered Securities.
Each of the Registration Statement and any post-effective amendment thereto, at the time it became or becomes effective, complied
and will comply in all material respects with the Securities Act and did not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
As of the Applicable Time, the Time of Sale Prospectus did not, and at the First Closing Date and at each applicable Option Closing
Date (as defined in Section 2), will not, contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Prospectus,
as of its date, did not, and at the First Closing Date and at each applicable Option Closing Date, will not, contain any untrue
statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The representations and warranties set forth in the three immediately
preceding sentences do not apply to statements in or omissions from the Registration Statement or any post-effective amendment
thereto, or the Prospectus or the Time of Sale Prospectus, or any amendments or supplements thereto, made in reliance upon and
in conformity with written information relating to any Underwriter furnished to the Company in writing by the Representative expressly
for use therein, it being understood and agreed that the only such information consists of the information described in Section 8(b) below.
There are no contracts or other documents required to be described in the Time of Sale Prospectus or the Prospectus or to be filed
as an exhibit to the Registration Statement which have not been described or filed as required.
(c) Free
Writing Prospectuses; Road Show. As of the determination date referenced in Rule 164(h) under the Securities
Act and as of the date hereof, the Company was and is an “ineligible issuer” in connection with the Offering pursuant
to Rules 164, 405 and 433 under the Securities Act. The Company has not prepared, used or referred to, and will not,
without your prior written consent, prepare, use or refer to, any free writing prospectus. Each of the Marketing Materials (including
each Road Show), when considered together with the Time of Sale Prospectus, did not, as of the Applicable Time, contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The representation and warranty set forth in the immediately preceding sentence does
not apply to statements in or omissions from the Time of Sale Prospectus, or any amendments or supplements thereto, made in reliance
upon and in conformity with written information relating to any Underwriter furnished to the Company in writing by the Representative
expressly for use therein, it being understood and agreed that the only such information consists of the information described
in Section 8(b) below.
(d) Distribution
of Offering Material By the Company. Prior to the later of (i) the expiration or termination of the option
granted to the several Underwriters in Section 2, (ii) the completion of the Underwriters’ distribution of the
Offered Securities and (iii) the expiration of 25 days after the date of the Prospectus, the Company has not distributed
and will not distribute any offering material in connection with the Offering and sale of the Offered Securities other than the
Registration Statement, the Time of Sale Prospectus, the Prospectus and any Permitted Section 5(d) Communications.
(e) The
Underwriting Agreement. This Agreement has been duly and validly authorized, executed and delivered by the Company.
(f) Filing
of a Form 8-A. The Company has filed with the Commission a registration statement (the “Exchange
Act Registration Statement”) on Form 8-A (file number 001-[_____]) providing for the registration under the
Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the
“Exchange Act”) of the Class A Ordinary Shares, which registration is currently effective on the date hereof.
The Exchange Act Registration Statement has become effective as provided in Section 12 of the Exchange Act.
(g) Stock
Exchange Listing. The Offered Securities have been approved for listing on The Nasdaq Capital Market (“Nasdaq”),
subject only to official notice of issuance.
(h) No
Integration. Neither the Company nor any of its affiliates has, prior to the date hereof, made any offer or sale
of any securities that are required to be “integrated” pursuant to the Securities Act with the offer and sale of the
Offered Securities pursuant to the Registration Statement.
(i) Authorization
of the Private Placement Shares. The Private Placement Shares have been duly authorized by the Company and, when
issued and delivered in the manner set forth in the Private Placement Purchase Agreement (by the entry of the name of the registered
owner thereof in the register of members of the Company confirming that such securities have been issued credited as fully paid)
against payment therefor, will be validly issued, fully paid and non-assessable.
(j) Authorization
of the Founder Shares. The Founder Shares have been duly authorized, were validly issued and are fully paid and
non-assessable.
Authorization
of the Offered Securities. The Offered Securities have been duly authorized for issuance and sale pursuant to this
Agreement and, when issued and delivered by the Company (by the entry of the name of the registered owner thereof in the register
of members of the Company confirming that such securities have been issued credited as fully paid) against payment therefor pursuant
to this Agreement, will be validly issued, fully paid and non-assessable.
(k) The
Trust Agreement. The Trust Agreement has been duly authorized, executed and delivered by the Company, and will
constitute a valid and binding agreement of the Company, enforceable against the Company, in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally
from time to time in effect and by equitable principles of general applicability.
(l) The
Subscription Agreement. The Subscription Agreement has been duly authorized, executed and delivered by the Company
and the Sponsor, and is a valid and binding agreement of the Company and the Sponsor, enforceable against the Company and the Sponsor
in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting
creditors’ rights generally from time to time in effect and by equitable principles of general applicability.
(m) The
Private Placement Purchase Agreement. The Private Placement Purchase Agreement has been duly authorized, executed
and delivered by the Company and the Sponsor, and is a valid and binding agreement of the Company and the Sponsor, enforceable
against the Company and the Sponsor, in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles
of general applicability.
(n) The
Registration and Shareholder Rights Agreement. The Registration and Shareholder Rights Agreement has been duly authorized
and on the First Closing Date, will be duly executed and delivered by the Company, and will constitute a valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable
principles of general applicability.
(o) The
Insider Letter. The Insider Letter has been duly authorized, executed and delivered by the Company and the Sponsor
and, to the Company’s knowledge, each executive officer, director and director nominee, respectively, and is a valid and
binding agreement of the Company, the Sponsor and, to the Company’s knowledge, each executive officer, director and director
nominee of the Company, respectively, enforceable against the Company, the Sponsor and, to the Company’s knowledge, each
executive officer, director and director nominee of the Company, respectively, in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time
in effect and by equitable principles of general applicability.
(p) The
Administrative Services Agreement. The Administrative Services Agreement has been duly authorized, executed and
delivered by the Company and the Sponsor and will constitute a valid and binding agreement of the Company and the Sponsor, enforceable
against the Company and the Sponsor in accordance with its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles
of general applicability.
(q) No
Material Adverse Change. Except as otherwise disclosed in the Registration Statement, the Time of Sale Prospectus
and the Prospectus, subsequent to the respective dates as of which information is given in the Registration Statement, the Time
of Sale Prospectus and the Prospectus: (i) there has been no material adverse change, or any development that could be reasonably
expected to result in a material adverse change, in the condition, financial or otherwise, or in the earnings, business, properties,
operations, assets, liabilities or prospects, whether or not arising from transactions in the ordinary course of business of the
Company (any such change being referred to herein as a “Material Adverse Change”); and (ii) the Company
has not incurred any material liability or obligation, indirect, direct or contingent, including without limitation any losses
or interference with its business from fire, explosion, flood, earthquakes, pandemic, accident or other calamity, whether or not
covered by insurance, or from any strike, labor dispute or court or governmental action, order or decree, that are material, individually
or in the aggregate, to the Company, or has entered into any transactions not in the ordinary course of business.
(r) No
Applicable Registration or Other Similar Rights. There are no persons with registration or other similar rights
to have equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated
by this Agreement.
(s) Independent
Accountants. Marcum LLP (“Marcum”), who has certified certain financial statements of the Company
and delivered their report with respect to the audited financial statements (which term as used in this Agreement includes the
related notes thereto and the supporting schedules, if any) filed with the Commission as a part of the Registration Statement,
the Time of Sale Prospectus and the Prospectus, is (i) a registered public accounting firm that is independent with respect
to the Company within the meaning of the Securities Act and the Exchange Act and the applicable published rules and regulations
thereunder and the rules of the Public Company Accounting Oversight Board (“PCAOB”), (ii) in compliance
with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X under the
Securities Act and (iii) a registered public accounting firm as defined by the PCAOB whose registration has not been suspended
or revoked and who has not requested such registration to be withdrawn.
(t) Financial
Statements. The financial statements, including the notes thereto and the supporting schedules, if any, filed with
the Commission as a part of the Registration Statement, the Time of Sale Prospectus and the Prospectus present fairly the financial
position of the Company as of the dates indicated and the results of its operations, changes in shareholders’ equity and
cash flows for the periods specified. Such financial statements and supporting schedules, if any, have been prepared in conformity
with generally accepted accounting principles as applied in the United States applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes thereto. No other financial statements or supporting schedules
are required to be included in the Registration Statement, the Time of Sale Prospectus or the Prospectus. The financial data set
forth in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus under the captions “Summary—Summary
Financial Data” and “Capitalization” fairly present the information set forth therein on a basis consistent with
that of the audited financial statements contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus.
There are no pro forma or as adjusted financial statements that are required to be included in the Registration Statement, the
Time of Sale Prospectus and the Prospectus in accordance with Regulation S-X that have not been included as so required. To
the Company’s knowledge, no person who has been suspended or barred from being associated with a registered public accounting
firm, or who has failed to comply with any sanction pursuant to Rule 5300 promulgated by the PCAOB, has participated in or
otherwise aided the preparation of, or audited, the financial statements, supporting schedules or other financial data filed with
the Commission as a part of the Registration Statement, the Time of Sale Prospectus and the Prospectus.
(u) Company’s
Accounting System. The Company will maintain a system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles
as applied in the United States and to maintain accountability for assets; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(v) Disclosure
Controls and Procedures; Deficiencies in or Changes to Internal Control Over Financial Reporting. The Company maintains
effective “disclosure controls and procedures” as defined under Rule 13a-15(e) under the Exchange Act, to
the extent required by such rule.
(w) Compliance
with the Sarbanes-Oxley Act. Solely to the extent that the Sarbanes-Oxley Act of 2002, as amended, and the
rules and regulations promulgated by the Commission and Nasdaq thereunder (the “Sarbanes-Oxley Act”) have
been applicable to the Company, there is and has been no failure on the part of the Company to comply in all material respects
with any provision of the Sarbanes-Oxley Act. The Company has taken all necessary actions to ensure that it is in compliance with
all provisions of the Sarbanes-Oxley Act that are in effect and with which the Company is required to comply.
(x) Compliance
with Nasdaq Rules. There is and has been no failure on the part of the Company or, to the knowledge of the Company,
any of the Company’s officers or directors, in their capacities as such, to comply with (as and when applicable), and immediately
following the initial effective date of the Registration Statement, the Company will be in compliance with Nasdaq Marketplace Rule IM-5605.
Further, there is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company’s
officers or directors, in their capacities as such, to comply with (as and when applicable), and immediately following the Effective
Date the Company will be in compliance with, the phase-in requirements and all other provisions of the corporate governance
requirements set forth in the Nasdaq Marketplace Rules.
(y) No
Fees Related to this Agreement or the Offering of Offered Securities. There are no transfer, stamp, issue, registration,
documentary or other similar taxes, duties, fees or charges under U.S. federal law or the laws of any state, or any political
subdivision thereof, or under the laws of any non-U.S. jurisdiction, required to be paid in connection with the execution
and delivery of this Agreement or the issuance or sale by the Company of the Offered Securities.
(aa) Incorporation
and Good Standing of the Company. The Company has been duly incorporated and is validly existing as an exempted
company in good standing under the laws of the jurisdiction of its incorporation (including that it has not failed to make any
filing with any Cayman Islands government authority or to pay any Cayman Islands government fees or tax, any of which would make
it liable to be struck off the Register of Companies and thereby cease to exist under the laws of the Cayman Islands) and has the
corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration
Statement, the Time of Sale Prospectus and the Prospectus and to enter into and perform its obligations under this Agreement, the
Trust Agreement, the Subscription Agreement, the Private Placement Purchase Agreement, the Registration and Shareholder Rights
Agreement, the Administrative Services Agreement and the Insider Letter and to carry out the transactions contemplated hereby and
thereby. The Company is duly qualified as a foreign business organization to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify would not reasonably be expected to have a material adverse effect on the financial
condition, earnings, business, properties, operations, assets, liabilities or prospects of the Company (a “Material Adverse
Effect”) on the Company.
(bb) Interests
in Other Entities. The Company does not own or control, directly or indirectly, an interest in any corporation,
partnership, limited liability company, joint venture, trust or other entity.
(cc) Capitalization
and Other Share Capital Matters. The authorized, issued and outstanding share capital of the Company is as set forth
in the Registration Statement, the Time of Sale Prospectus and the Prospectus under the caption “Capitalization” (other
than for subsequent issuances, if any, pursuant to employee benefit plans, or upon the exercise of outstanding options or warrants,
in each case described in the Registration Statement). The share capital of the Company conforms in all material respects to the
description thereof in the Time of Sale Prospectus, the Registration Statement and the Prospectus. All of the issued and outstanding
securities of the Company have been duly authorized and validly issued, are fully paid and non-assessable and have been issued
in compliance with all federal and state securities laws, based in part on the representations and warranties of the purchasers
of such securities. None of the outstanding securities was issued in violation of any preemptive rights, rights of first refusal
or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options,
warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into
or exchangeable or exercisable for, any share capital of the Company other than those described in the Registration Statement,
the Time of Sale Prospectus and the Prospectus.
(dd) Sale
of Securities of the Company. No securities of the Company have been sold by the Company or by or on behalf of,
or for the benefit of, any person or persons controlling, controlled by, or under common control with the Company from its inception
through and including the date hereof, except as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus.
(ee) “Penny
Stock” Securities. Upon delivery and payment for the Class A Ordinary Shares on the First Closing Date
and any Option Closing Dates, the Company will not be subject to Rule 419 under the Securities Act and none of the Company’s
outstanding securities will be deemed to be a “penny stock” as defined in Rule 3a51-1 under the Exchange Act.
(ff) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals Required. The Company is not in violation of
its memorandum and articles of association, and, as of the First Closing Date, will not be in violation of its amended and
restated memorandum and articles of association (as it may be amended from time to time, the “Amended and Restated
Memorandum and Articles of Association”), and is not in default (or, with the giving of notice or lapse of time,
would not be in default) (“Default”) under any indenture, loan, credit agreement, note, lease, license
agreement, contract, franchise or other instrument (including, without limitation, any pledge agreement, security agreement,
mortgage or other instrument or agreement evidencing, guaranteeing, securing or relating to indebtedness) to which the
Company is a party or by which it may be bound, or to which any of the Company’s properties or assets are subject
(each, an “Existing Instrument”), except for such Defaults as could not be reasonably expected,
individually or in the aggregate, to have a Material Adverse Effect. The Company’s execution, delivery and performance
of this Agreement, the Trust Agreement, the Subscription Agreement, the Private Placement Purchase Agreement, the
Registration and Shareholder Rights Agreement, the Administrative Services Agreement or the Insider Letter, consummation of
the transactions contemplated hereby and thereby and by the Registration Statement, the Time of Sale Prospectus and the
Prospectus and the issuance and sale of the Offered Securities (including the use of proceeds from the sale of the Offered
Securities as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus under the caption
“Use of Proceeds”) (i) will not result in any violation of the provisions of the Amended and Restated
Memorandum and Articles of Association, (ii) will not conflict with or constitute a breach of, or Default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant
to, or require the consent of any other party to, any Existing Instrument and (iii) will not result in any violation of
any law, administrative regulation or administrative or court decree applicable to the Company. No consent, approval,
authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or
agency, is required for, or in connection with, the Company’s execution, delivery and performance of this Agreement,
the Trust Agreement, the Subscription Agreement, the Private Placement Purchase Agreement, the Registration and Shareholder
Rights Agreement, the Administrative Services Agreement or the Insider Letter and consummation of the transactions
contemplated hereby and thereby and by the Registration Statement, the Time of Sale Prospectus and the Prospectus, except
such as have been obtained or made by the Company and are in full force and effect under the Securities Act or Exchange Act
and such as may be required under applicable state securities or blue sky laws or the Financial Industry Regulatory
Authority, Inc. (the “FINRA”).
(gg) Compliance
with Laws. The Company has been and is in compliance with all applicable laws, rules and regulations, except
where failure to be so in compliance could not be expected, individually or in the aggregate, to have a Material Adverse Effect.
(hh) No
Material Actions or Proceedings. There is no action, suit, proceeding, inquiry or investigation brought by or before
any governmental entity now pending or, to the knowledge of the Company, threatened, against or affecting the Company or the Sponsor,
which could be expected, individually or in the aggregate, to have a Material Adverse Effect or materially and adversely affect
the consummation of the transactions contemplated by this Agreement, the Trust Agreement, the Subscription Agreement, the Private
Placement Purchase Agreement, the Registration and Shareholder Rights Agreement, the Administrative Services Agreement or the Insider
Letter or the performance by the Company of its obligations hereunder and thereunder.
(ii) All
Necessary Permits, etc. The Company possesses such valid and current licenses, certificates, authorizations
or permits required by state, federal or foreign regulatory agencies or bodies to conduct its business as currently conducted and
as described in the Registration Statement, the Time of Sale Prospectus or the Prospectus. The Company has not received any notice
of proceedings relating to the revocation or modification of, or non-compliance with, any such license, certificate, authorization
or permit that, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could reasonably
be expected to have a Material Adverse Effect.
(jj) Title
to Properties. The Company owns or leases all such properties as are necessary to the conduct of its operations
as presently conducted.
(kk) Tax
Law Compliance. The Company has filed all necessary federal, state and foreign income and franchise tax returns
or has properly requested extensions thereof (except in any case in which the failure to so file would not have a Material Adverse
Effect) and has paid all taxes required to be paid by it and, if due and payable, any related or similar assessment, fine or penalty
levied against it, except for any such assessment, fine or penalty that is currently being contested in good faith and by appropriate
proceedings and for which adequate reserves required by generally accepted accounting principles have been created with respect
thereto or as would not have a Material Adverse Effect.
(ll) ERISA
Compliance. The Company has not established or maintained any “employee benefit plan” (as defined under
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), and thus is not subject to
ERISA.
(mm) Company
Not an “Investment Company.” The Company is not, and will not be, either after receipt of payment for
the Offered Securities or after the application of the proceeds therefrom as described under “Use of Proceeds” in the
Registration Statement, the Time of Sale Prospectus or the Prospectus, required to register as an “investment company”
under the Investment Company Act of 1940, as amended (the “Investment Company Act”).
(nn) No
Price Stabilization or Manipulation; Compliance with Regulation M. The Company has not taken, directly or indirectly,
any action designed to or that might cause or result in stabilization or manipulation of the price of any security of the Company,
whether to facilitate the sale or resale of the Offered Securities or otherwise, which would directly or indirectly violate Regulation M
under the Exchange Act (“Regulation M”).
(oo) Related-Party
Transactions. There are no business relationships or related-party transactions involving the Company or any other
person required to be described in the Registration Statement, the Time of Sale Prospectus or the Prospectus that have not been
described as required.
(pp) FINRA
Matters. All of the information provided to the Underwriters or to counsel for the Underwriters by the Sponsor,
the Company and, to the knowledge of the Company, its counsel, its officers, directors, director nominees and the other holders
of any securities (debt or equity) or options to acquire any securities of the Company in connection with the Offering, is true,
complete and correct in all material respects and the Company has not become aware of any other information that would cause such
provided information to become inaccurate and incorrect in any material respect.
(qq) FINRA
Conflict of Interest. To the Company’s knowledge after reasonable inquiry, there are no affiliations or associations
between (i) any member of FINRA and (ii) the Company or any of the Company’s officers, directors or 10% or
greater security holders or any beneficial owner of the Company’s unregistered equity securities that were acquired at any
time on or after the 180th day immediately preceding the date the Registration Statement was initially submitted or filed
with the Commission, except as disclosed in the Registration Statement (excluding the exhibits thereto), the Time of Sale
Prospectus and the Prospectus.
(rr) Non-Compete/Non-Solicit.
Except as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus, to the Company’s knowledge,
none of the Sponsor, officers, directors or director nominees of the Company is subject to a non-competition agreement or non-solicitation
agreement with any employer or prior employer that could materially affect its, his or her ability to be and act in the capacity
of shareholder, officer or director of the Company, as applicable.
(ss) Statistical
and Market-Related Data. All statistical, industry-related and market-related data included in the Registration
Statement, the Time of Sale Prospectus or the Prospectus are based on or derived from sources that the Company reasonably and
in good faith believes to be reliable and accurate. To the extent required, the Company has obtained the written consent to the
use of such data from such sources.
(tt) No
Unlawful Contributions or Other Payments. None of the Company, the Sponsor, or, to the knowledge of the Company,
any director, director nominee, officer, employee or controlled affiliate of the Company, has made any contribution or other payment
to any official of, or candidate for, any federal, state or foreign office in violation of the FCPA (as defined below).
(uu) Anti-Corruption
and Anti-Bribery Laws. None of the Company, the Sponsor, or, to the knowledge of the Company, any director, director
nominee, officer, employee or controlled affiliate of the Company, has, in the course of its, his or her actions for, or on behalf
of, the Company (i) made any unlawful contribution, gift, entertainment or other unlawful expenses relating to political
activity; (ii) made or taken any act in furtherance of an offer, promise or authorization of any direct or indirect unlawful
payment or benefit to any foreign or domestic government official, “foreign official” (as defined in the U.S. Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (collectively, the “FCPA”))
or employee, including of any government-owned or controlled entity or public international organization, or any political party,
party official, or candidate for political office; (iii) violated or is in violation of any provision of the FCPA or the
OECD Convention on Bribery of Foreign Public Officials in International Business Transactions, the UK Bribery Act 2010, or any
other applicable anti-bribery or anti-corruption law; or (iv) made, offered, authorized, requested or taken any act in furtherance
of any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment or benefit to any domestic government
official, such foreign official or employee; and the Company, the Sponsor, and, to the knowledge of the Company, the Company’s
directors, director nominees, officers, agents, employees and affiliates have conducted the business of the Company and their
respective businesses on behalf of the Company in compliance with the FCPA and have instituted and maintain policies and procedures
designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(vv) Money
Laundering Laws. The operations of the Company and the Sponsor have been conducted at all times, in compliance with
applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related
or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively,
the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge
of the Company, threatened.
(ww) Sanctions.
None of the Company, the Sponsor, or, to the knowledge of the Company, any director, director nominee, officer, employee or controlled
affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department (“OFAC”), the U.S. Department of State, the United Nations Security Council,
the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”),
nor is the Company located, organized or resident in a country or territory that is the subject or target of Sanctions, including
without limitation, Crimea, Cuba, Iran, North Korea, and Syria; and the Company will not directly or indirectly use the proceeds
of this Offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, or any joint venture partner
or other person or entity, for the purpose of financing the activities of or business with any person, or in any country or territory,
that at the time of the Offering, is the subject or target of any Sanctions or in any other manner that will result in a violation
by any person (including any person participating in the transaction whether as underwriter, advisor, investor or otherwise) of
such Sanctions. Since its inception, the Company has not knowingly engaged in and is not knowingly engaged in any dealings or
transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or
with any sanctioned country.
(xx) Brokers.
Except as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus, there is no broker, finder or
other party that is entitled to receive from the Company any brokerage or finder’s fee or other fee or commission as a result
of any transactions contemplated by this Agreement.
(yy) Cybersecurity.
The Company’s information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications,
and databases (collectively, “IT Systems”) are adequate for, and operate and perform in all material respects
as required in connection with the operation of the business of the Company as currently conducted, free and clear of all material
bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. The Company has implemented and maintained commercially
reasonable physical, technical and administrative controls, policies, procedures, and safeguards to maintain and protect its material
confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data, including
“Personal Data,” used in connection with their businesses. “Personal Data” means: (i) a natural
person’s name, street address, telephone number, e-mail address, photograph, social security number or tax identification
number, driver’s license number, passport number, credit card number, bank information, or customer or account number; (ii) any
information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as
amended; (iii) “personal data” as defined by European Union General Data Protection Regulation (EU 2016/679);
and (iv) any other piece of information that allows the identification of such natural person, or his or her family, or permits
the collection or analysis of any data related to an identified person’s health or sexual orientation. To the Company’s
knowledge, there have been no breaches, violations, outages or unauthorized uses of or accesses to same, except for those that
have been remedied without material cost or liability or the duty to notify any other person, nor any incidents under internal
review or investigations relating to the same. The Company is presently in material compliance with all applicable laws or statutes
and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal
policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection
of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification and the Company has implemented
backup and disaster recovery technology consistent with industry standards and practices.
(zz) Compliance
with Data Privacy Laws. The Company is, and at all prior times was, in material compliance with all applicable
state and federal data privacy and security laws and regulations, and the Company has taken commercially reasonable actions to
prepare to comply with, and since its inception, have been and currently are in compliance with, the European Union General Data
Protection Regulation (EU 2016/679) (collectively, the “Privacy Laws”). To ensure compliance with the Privacy
Laws, the Company has in place, comply with, and take appropriate steps reasonably designed to ensure compliance in all material
respects with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure,
handling, and analysis of Personal Data (the “Policies”). The Company has at all times made all disclosures
to users or customers required by applicable laws and regulatory rules or requirements, and none of such disclosures made
or contained in any Policy have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws and regulatory
rules or requirements in any material respect. The Company further certifies that it: (i) has not received notice of
any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has
no knowledge of any event or condition that would reasonably be reasonably expected to result in any such notice; (ii) is
not currently conducting or paying for, in whole or in part, any investigation, remediation, or other corrective action pursuant
to any Privacy Law; or (iii) is not a party to any order, decree, or agreement that imposes any obligation or liability under
any Privacy Law.
(aaa) Emerging
Growth Company Status. From the time of the initial confidential submission of the Registration Statement to the
Commission (or, if earlier, the first date on which the Company engaged in any Section 5(d) Written Communication or
any Section 5(d) Oral Communication) through the date hereof, the Company has been and is an “emerging growth
company,” as defined in Section 2(a) of the Securities Act (an “Emerging Growth Company”).
(bbb) Communications
with Potential Business Combination Targets. Prior to the date hereof, neither the Company nor anyone on its behalf
has, and as of the First Closing Date, neither the Company nor anyone on its behalf will have selected any Business Combination
target or initiated any substantive discussions, directly or indirectly, with any Business Combination target.
(ccc) Communications.
The Company (i) has not alone engaged in communications with potential investors in reliance on Section 5(d) of
the Securities Act other than Permitted Section 5(d) Communications with the consent of the Representative with entities
that are QIBs or IAIs and (ii) has not authorized anyone other than the Representative to engage in such communications; the
Company reconfirms that the Representative has been authorized to act on its behalf in undertaking Marketing Materials, Section 5(d) Oral
Communications and Section 5(d) Written Communications; as of the Applicable Time, each Permitted Section 5(d) Communication,
when considered together with the Time of Sale Prospectus, did not, as of the Applicable Time, include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and each Permitted Section 5(d) Communication, if any, does not, as of the
date hereof, conflict with the information contained in the Registration Statement, the Preliminary Prospectus and the Prospectus;
and the Company has filed publicly on EDGAR at least 15 calendar days prior to any “road show” (as defined in
Rule 433 under the Securities Act), any confidentially submitted registration statement and registration statement amendments
relating to the offer and sale of the Offered Securities.
(ddd) Qualification
of Underwriters. It is not necessary under the laws of the Cayman Islands (i) to enable the Underwriters to
enforce their rights under this Agreement provided that they are not otherwise engaged in business in the Cayman Islands, or (ii) solely
by reason of the execution, delivery or consummation of this Agreement, for any of the Underwriters to be qualified or entitled
to carry out business in the Cayman Islands.
(eee) Enforcement
of Judgments. Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the courts
of the State of New York, such judgments will be recognized and enforced in the courts of the Cayman Islands at common law, without
any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court
of the Cayman Islands, provided such judgment is given by a foreign court of competent jurisdiction, imposes on the judgment debtor
a liability to pay a liquidated sum for which the judgment has been given, is final, is not in respect of taxes, a fine or a penalty,
and was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy
of the Cayman Islands.
(fff) Except
as described in the Registration Statement (excluding the exhibits thereto), each preliminary prospectus and the Prospectus, under
current laws and regulations of the Cayman Islands, all dividends and other distributions declared and payable on the Offered
Securities may be paid by the Company to the holder thereof in U.S. dollars and all such payments made to holders thereof or therein
who are non-residents of the Cayman Islands will not be subject to income, withholding or other taxes under laws and regulations
of the Cayman Islands or any taxing authority thereof or therein and will otherwise be free and clear of any other tax, duty,
withholding or deduction in the Cayman Islands or any taxing authority thereof or therein and without the necessity of obtaining
any governmental authorization in the Cayman Islands or any taxing authority thereof or therein.
Any certificate signed by any officer of
the Company and delivered to the Representative, any Underwriters or to counsel for the Underwriters in connection with the Offering,
or the purchase and sale, of the Offered Securities shall be deemed a representation and warranty by the Company to each Underwriter
as to the matters covered thereby.
The Company has a reasonable basis for making
each of the representations set forth in this Section 1. The Company acknowledges that the Underwriters and, for purposes
of the opinions to be delivered pursuant to Section 5 hereof, counsel to the Company and counsel to the Underwriters, will
rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.
Section 2. Purchase,
Sale and Delivery of the Offered Securities.
(a) The
Firm Securities. Upon the terms herein set forth, the Company agrees to issue and sell to the several Underwriters
an aggregate of 15,000,000 Class A Ordinary Shares. On the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth, the Underwriters agree, severally and not jointly,
to purchase from the Company the respective number of Firm Securities set forth opposite their names on Schedule A.
The purchase price per Class A Ordinary Share to be paid by the several Underwriters to the Company shall be $9.80 per
Class A Ordinary Share (the “Purchase Price”).
(b) The
First Closing Date. Delivery of the Firm Securities to be purchased by the Underwriters and payment therefor shall
be made at 9:00 a.m. New York City time, on [_______ __], 2021, or such other time and date not later than 1:30
p.m. New York City time on [_______ __], 2021 as the Representative shall designate by notice to the Company (the time and
date of such closing are called the “First Closing Date”). The Company hereby acknowledges that circumstances
under which the Representative may provide notice to postpone the First Closing Date as originally scheduled include, but are
not limited to, any determination by the Company or the Representative to recirculate to the public copies of an amended or supplemented
Prospectus or a delay as contemplated by the provisions of Section 10. Delivery of the Firm Securities shall be made through
the facilities of The Depository Trust Company (“DTC”) unless the Representative shall otherwise instruct.
(c) The
Optional Securities; Option Closing Date. In addition, on the basis of the representations, warranties and agreements
herein contained, and upon the terms but subject to the conditions herein set forth, the Company hereby grants an option to the
several Underwriters to purchase, severally and not jointly, up to an aggregate of 2,250,000 Class A Ordinary Shares
from the Company at the purchase price per Class A Ordinary Share to be paid by the Underwriters for the Firm Securities.
The option granted hereunder may be exercised at any time and from time to time in whole or in part upon notice by the Representative
to the Company, which notice may be given at any time within 45 days from the date of this Agreement. Such notice shall
set forth (i) the aggregate number of Optional Securities as to which the Underwriters are exercising the option and (ii) the
time, date and place at which the Optional Securities will be delivered (which time and date may be simultaneous with, but not
earlier than, the First Closing Date; and in the event that such time and date are simultaneous with the First Closing Date, the
term “First Closing Date” shall refer to the time and date of delivery of the Firm Securities and such Optional
Securities). Any such time and date of delivery, if subsequent to the First Closing Date, is called an “Option Closing
Date,” and shall be determined by the Representative and shall not be earlier than two or later than five full business
days after delivery of such notice of exercise. If any Optional Securities are to be purchased, each Underwriter agrees, severally
and not jointly, to purchase the number of Optional Securities (subject to such adjustments to eliminate fractional shares as
the Representative may determine) that bears the same proportion to the total number of Optional Securities to be purchased as
the number of Firm Securities set forth on Schedule A opposite the name of such Underwriter bears to the total number
of Firm Securities. The Representative may cancel the option at any time prior to its expiration by giving written notice of such
cancellation to the Company.
(d) Public
Offering of the Offered Securities. The Representative hereby advises the Company that the Underwriters intend
to offer for sale to the public, on the terms set forth in the Registration Statement, the Time of Sale Prospectus and the Prospectus,
their respective portions of the Offered Securities as soon after this Agreement has been executed and the Registration Statement
has been declared effective as the Representative, in its sole judgment, has determined is advisable and practicable.
(e) Delivery
and Payment for the Offered Securities. (i) In addition to the discount from the public offering price represented
by the Purchase Price set forth in the last sentence of Section 2(a) of this Agreement, the Company hereby agrees to
pay to the Underwriters a deferred discount of $0.35 per Class A Ordinary Share (including both Firm Securities and
Optional Securities) purchased hereunder (the “Deferred Discount”). Upon consummation of the Business Combination,
the Deferred Discount will be paid directly from amounts on deposit in the Trust Account, and the Company shall cause CST to pay
the Deferred Discount by wire transfer of immediately available funds to the Representative in the same percentages of the total
number of Offered Securities such Representative purchased and as set forth in Schedule A hereto. The Underwriters hereby
agree that if no Business Combination is consummated within the time period provided in the Trust Agreement and the funds held
under the Trust Agreement are distributed to the holders of the Offered Securities sold pursuant to this Agreement (the “Public
Shareholders”), (x) the Underwriters will forfeit any rights or claims to the Deferred Discount and (y) the
trustee under the Trust Agreement is authorized to distribute the Deferred Discount to the Public Shareholders on a pro rata basis.
(ii) It
is understood that the Representative has been authorized, for its own account and the accounts of the several Underwriters, to
accept delivery of and receipt for, and make payment by wire transfer payable in same-day funds to an account specified by the
Company and to the Trust Account as described below in this Section of the purchase price for, the Firm Securities and any
Optional Securities the Underwriters have agreed to purchase. The Representative, individually and not as the Representative of
the Underwriters, may (but shall not be obligated to) make payment for any Offered Securities to be purchased by any Underwriter
whose funds shall not have been received by the Representative by the First Closing Date or the applicable Option Closing Date,
as the case may be, for the account of such Underwriter, but any such payment shall not relieve such Underwriter from any of its
obligations under this Agreement.
(iii) Payment
for the Firm Securities shall be made as follows: The net proceeds for the Firm Securities (including the Deferred Discount) shall
be deposited in the Trust Account pursuant to the terms of the Trust Agreement along with such portion of the proceeds of the sale
of the Private Placement Shares in order for the Trust Account to equal the product of the number of Class A Ordinary Shares
sold and the public offering price per Class A Ordinary Share as set forth on the cover of the Prospectus upon delivery to
the Representative of the Firm Securities through the facilities of DTC or, if the Representative has otherwise instructed, upon
delivery to the Representative of certificates (in form and substance satisfactory to the Representative) representing the Firm
Securities, in each case for the account of the Underwriters. The Firm Securities shall be registered in such name or names and
in such authorized denominations as the Representative may request in writing at least one business day prior to the First Closing
Date. If delivery is not made through the facilities of DTC, the Company will permit the Representative to examine and package
the Firm Securities for delivery, at least one business day prior to the First Closing Date at a location in New York City as the
Representative may designate. The Company shall not be obligated to sell or deliver the Firm Securities except upon tender of payment
by the Representative for all the Firm Securities. At least one business day prior to the First Closing Date, the Company shall
deposit the net proceeds from the sale of the Private Placement Shares into the Trust Account as provided by the terms of the Private
Placement Purchase Agreement.
(iv) Payment
for the Optional Securities shall be made as follows: $9.80 per Optional Security (including any Deferred Discount attributable
to the Optional Securities) shall be deposited in the Trust Account pursuant to the terms of the Trust Agreement upon delivery
to the Representative of the Optional Securities through the facilities of DTC or, if the Representative has otherwise instructed,
upon delivery to the Representative of certificates (in form and substance satisfactory to the Representative) representing the
Optional Securities for the account of the Underwriters. The Optional Securities shall be registered in such name or names and
in such authorized denominations as the Representative may request in writing at least two business days prior to the Option Closing
Date. If delivery is not made through the facilities of DTC, the Company will permit the Representative to examine and package
the Optional Securities for delivery, at least one business day prior to the Option Closing Date. The Company shall not be obligated
to sell or deliver the Optional Securities except upon tender of payment by the Representative for all the Optional Securities.
At least one business day prior to the Option Closing Date, the Company shall deposit the proceeds from the sale of the applicable
Private Placement Shares into the Trust Account.
Section 3. Additional
Covenants of the Company.
The Company further covenants and agrees
with each Underwriter as follows:
(a) Delivery
of Registration Statement, Time of Sale Prospectus and Prospectus. The Company shall furnish to you in New York
City, without charge, prior to 10:00 a.m. New York City time on the business day next succeeding the date of this Agreement
and during the period when a prospectus relating to the Offered Securities is required by the Securities Act to be delivered (whether
physically or through compliance with Rule 172 under the Securities Act or any similar rule) in connection with sales of the
Offered Securities, as many copies of the Time of Sale Prospectus, the Prospectus and any supplements and amendments thereto or
to the Registration Statement as the Representative may reasonably request.
(b) Representative’s
Review of Proposed Amendments and Supplements. During the period when a prospectus relating to the Offered Securities
is required by the Securities Act to be delivered (whether physically or through compliance with Rule 172 under the Securities
Act or any similar rule), the Company (i) will furnish to the Representative for review, a reasonable period of time prior
to the proposed time of filing of any proposed amendment or supplement to the Registration Statement, a copy of each such amendment
or supplement and (ii) will not amend or supplement the Registration Statement without the Representative’s prior written
consent. Prior to amending or supplementing any preliminary prospectus, the Time of Sale Prospectus or the Prospectus, the Company
shall furnish to the Representative for review, a reasonable amount of time prior to the time of filing or use of the proposed
amendment or supplement, a copy of each such proposed amendment or supplement. The Company shall not file or use any such proposed
amendment or supplement without the Representative’s prior written consent. The Company shall file with the Commission within
the applicable period specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant
to such rule.
(c) Free
Writing Prospectuses. The Company will not make any offer relating to the Class A Ordinary Shares that constitutes
or would constitute a free writing prospectus or a portion thereof required to be filed by the Company with the Commission or
retained by the Company under Rule 433 of the Securities Act.
(d) Amendments
and Supplements to Time of Sale Prospectus. If the Time of Sale Prospectus is being used to solicit offers to buy
the Offered Securities at a time when the Prospectus is not yet available to prospective purchasers, and any event shall occur
or condition exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus so that the Time of
Sale Prospectus does not include an untrue statement of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances when delivered to a prospective purchaser, not misleading, or if
any event shall occur or condition exist as a result of which the Time of Sale Prospectus conflicts with the information contained
in the Registration Statement, or if it shall be necessary to amend or supplement the Time of Sale Prospectus to comply with the
Securities Act or the rules thereunder, the Company shall (subject to Section 3(b) and Section 3(e) hereof)
promptly prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to any dealer upon request,
either amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so amended
or supplemented will not include an untrue statement of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances when delivered to a prospective purchaser, not misleading or so
that the Time of Sale Prospectus, as amended or supplemented, will no longer conflict with the information contained in the Registration
Statement or so that the Time of Sale Prospectus, as amended or supplemented, will comply with the Securities Act or the rules thereunder.
(e) Certain
Notifications and Required Actions. After the date of this Agreement, the Company shall promptly advise the Representative
in writing of: (i) the receipt of any comments of, or requests for additional or supplemental information from, the Commission;
(ii) the time and date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement
to any preliminary prospectus, the Time of Sale Prospectus, the Prospectus or the Exchange Act Registration Statement; (iii) the
time and date that any post-effective amendment to the Registration Statement becomes effective; and (iv) the issuance by
the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto
or any amendment or supplement to any preliminary prospectus, the Time of Sale Prospectus, the Prospectus or the Exchange Act Registration
Statement or of any order preventing or suspending the use of any preliminary prospectus, the Time of Sale Prospectus, or the Prospectus,
or of any proceedings to remove, suspend or terminate from listing or quotation the Class A Ordinary Shares from any securities
exchange upon which they are listed for trading or included or designated for quotation, or of the threatening or initiation of
any proceedings for any of such purposes. If, at any time, the Commission shall enter any such stop order, the Company will use
its best efforts to obtain the lifting of such order at the earliest possible moment. Additionally, the Company agrees that it
shall comply in all material respects with all applicable provisions of Rule 424(b), Rule 433 and Rule 430A under
the Securities Act and will use its reasonable efforts to confirm that any filings made by the Company under Rule 424(b) or
Rule 433 were received in a timely manner by the Commission.
(f) Amendments
and Supplements to the Prospectus and Other Securities Act Matters. If, at any time when a prospectus relating
to the Offered Securities is required to be delivered under the Securities Act, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus so that the Prospectus does not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered (whether physically or through compliance with Rule 172 under the Securities Act or any
similar rule) to a purchaser, not misleading, or if it shall be necessary to amend the Registration Statement or supplement the
Prospectus to comply with applicable law, the Company agrees (subject to Section 3(b) and Section 3(c) hereof)
to promptly prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to any dealer upon request,
amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not include
an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered (whether physically or through compliance with Rule 172 under
the Securities Act or any similar rule) to a purchaser, not misleading or so that the Prospectus, as amended or supplemented,
will comply with applicable law. Neither the Representative’s consent to, nor delivery of, any such amendment or supplement
shall constitute a waiver of any of the Company’s obligations under Section 3(b) or Section 3(e).
(g) Blue
Sky Compliance. The Company shall cooperate with the Representative and counsel for the Underwriters to qualify
or register the Offered Securities for sale under (or obtain exemptions from the application of) the state securities or blue
sky laws or Canadian provincial securities laws of those jurisdictions designated by the Representative, shall comply with such
laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of
the Offered Securities. The Company shall not be required to qualify as a foreign corporation or to take any action that would
subject it to general service of process in any such jurisdiction where it is not presently qualified or where it would be subject
to taxation as a foreign corporation. The Company will advise the Representative promptly of the suspension of the qualification
or registration of (or any such exemption relating to) the Offered Securities for offering, sale or trading in any jurisdiction
or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company shall use its best efforts to obtain the withdrawal thereof at the earliest
possible moment.
(h) Use
of Proceeds. The Company shall apply the net proceeds from the sale of the Offered Securities and the Private Placement
Shares sold by it in the manner described under the caption “Use of Proceeds” in the Registration Statement, the Time
of Sale Prospectus and the Prospectus.
(i) Transfer
Agent. For a period commencing on the Effective Date and ending at least five years from the date of the consummation
of the Business Combination or until such earlier time at which the distributions of the Trust Account to the Public Shareholders
in connection with the redemption of the Class A Ordinary Shares held by the Public Shareholders pursuant to the terms of
the Company’s Amended and Restated Memorandum and Articles of Association, if the Company fails to consummate a Business
Combination (the “Liquidation”) occurs or the Class A Ordinary Shares cease to be registered under the
Exchange Act, the Company shall retain a transfer agent.
(j) Earnings
Statement. The Company will make generally available to its security holders and to the Representative as soon
as practicable an earnings statement (which need not be audited) covering a period of at least 12 months beginning
with the first fiscal quarter of the Company commencing after the date of this Agreement that will satisfy the provisions of Section 11(a) of
the Securities Act and the rules and regulations of the Commission thereunder.
(k) Continued
Compliance with Securities Laws. The Company will comply with the Securities Act and the Exchange Act so as to
permit the completion of the distribution of the Offered Securities as contemplated by this Agreement, the Registration Statement,
the Time of Sale Prospectus and the Prospectus. Without limiting the generality of the foregoing, the Company will, during the
period when a prospectus relating to the Offered Securities is required by the Securities Act to be delivered (whether physically
or through compliance with Rule 172 under the Securities Act or any similar rule), file on a timely basis with the Commission
and Nasdaq all reports and documents required to be filed under the Exchange Act. Additionally, the Company shall report the use
of proceeds from the issuance of the Offered Securities as may be required under Rule 463 under the Securities Act.
(l) Continued
Registration of the Securities of the Company. For a period commencing on the Effective Date and ending at least
five years from the date of the consummation of the Business Combination or until such earlier time at which the Liquidation occurs,
the Company will use its best efforts to maintain the registration of the Class A Ordinary Shares under the provisions of
the Exchange Act, except after giving effect to a going private transaction after the completion of a Business Combination. The
Company will not deregister the Class A Ordinary Shares under the Exchange Act (except in connection with a going private
transaction after the completion of a Business Combination) without the prior written consent of the Representative.
(m) Listing.
The Company will use commercially reasonable efforts to effect and maintain the listing of the Class A Ordinary Shares on
Nasdaq for a period commencing on the Effective Date and ending at least five years from the date of the consummation of the initial
Business Combination or until such earlier time at which the Liquidation occurs or the Class A Ordinary Shares cease to be
publicly traded.
(n) Reservation
of Unissued Securities of the Company. The Company will reserve and keep available that maximum number of its authorized
but unissued securities that are issuable upon the conversion of the Founder Shares.
(o) Agreement
Not to Issue Additional Class A Ordinary Shares. Prior to the consummation of a Business Combination or the
Liquidation, the Company shall not issue any Class A Ordinary Shares or any options or other securities convertible into or
exercisable or exchangeable for Class A Ordinary Shares, or any preference shares, in each case, that would entitle the holders
thereof to (i) receive funds from the Trust Account or (ii) vote as a class with the Class A Ordinary Shares (a) on
a Business Combination or on any other proposal presented to the Public Shareholders prior to or in connection with the completion
of a Business Combination or (b) to approve an amendment to the Amended and Restated Memorandum and Articles of Association
to (x) extend the time the Company has to consummate a Business Combination beyond 24 months from the First Closing
Date or (y) amend such other provisions as set forth in the Registration Statement, Time of Sale Prospectus or the Prospectus.
(p) Agreement
Not to Offer or Sell Additional Securities of the Company. During the period commencing on and including the date
hereof and continuing through and including the 180th day following the date of the Prospectus (such period, as extended as
described below, being referred to herein as the “Lock-up Period”), the Company will not, without the prior
written consent of the Representative, (x) offer, sell, contract to sell, pledge or otherwise dispose of (or enter into any
transaction that is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the Company or any affiliate of the Company or any person
in privity with the Company or any affiliate of the Company), directly or indirectly, including the filing (or participation in
the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder with respect to, any other Class A Ordinary Shares or any securities
convertible into, or exercisable or exchangeable for, Class A Ordinary Shares or publicly announce an intention to effect
any such transaction; provided, however, that the Company may (1) issue and sell the Private Placement Shares,
(2) issue and sell the Optional Securities on exercise of the option provided for in Section 2 hereof, (3) register
with the Commission pursuant to the Registration and Shareholder Rights Agreement, in accordance with the terms of the Registration
and Shareholder Rights Agreement, the resale of the Founder Shares, the Private Placement Shares, the Working Capital Shares or
the Class A Ordinary Shares issuable upon conversion of Founder Shares and, (4) issue securities in connection with a
Business Combination, or (y) release the Sponsor or any officer, director or director nominee from the 180-day lock-up
contained in the Insider Letter.
(q) Investment
Limitation. The Company shall not invest or otherwise use the proceeds received by the Company from its sale of
the Offered Securities and the Private Placement Shares in such a manner as would require the Company to register as an investment
company under the Investment Company Act.
(r) No
Stabilization or Manipulation; Compliance with Regulation M. The Company will not take, directly or indirectly,
any action designed to or that might cause or result in stabilization or manipulation of the price of any security of the Company,
whether to facilitate the sale or resale of the Offered Securities or otherwise in violation of Regulation M, and the Company
will comply with all applicable provisions of Regulation M.
(s) Company
to File a Current Report on Form 8-K. The Company shall, on or prior to the date hereof, retain its independent
registered public accounting firm to audit the balance sheet of the Company as of the First Closing Date (the “Audited
Balance Sheet”) reflecting the receipt by the Company of the proceeds of the sale of the Offered Securities as set forth
in the Prospectus on the First Closing Date. As soon as the Audited Balance Sheet becomes available, the Company shall promptly,
but not later than four business days after the First Closing Date, file the Closing Form 8-K with the Commission, which report
shall contain the Company’s Audited Balance Sheet. Additionally, upon the Company’s receipt of the proceeds from the
exercise of all or any portion of the option provided for in Section 2 hereof, the Company shall promptly, but not later than
four business days after the receipt of such proceeds, file a Current Report on Form 8-K with the Commission, which report
shall disclose the Company’s sale of the Optional Securities and its receipt of the proceeds therefrom, unless the receipt
of such proceeds are reflected in the Current Report on Form 8-K referenced in the immediately prior sentence.
(t) Company
to Procure Review of Unaudited Quarterly Financial Statements. For a period commencing on the Effective Date and
ending at least five years from the date of the consummation of the Business Combination or until such earlier time at which the
Liquidation occurs or the Class A Ordinary Shares cease to be publicly traded, the Company, at its expense, shall cause its
regularly engaged independent registered public accounting firm to review (but not audit) the Company’s financial statements
for each of the first three fiscal quarters of the year prior to the announcement of quarterly financial information, the filing
of the Company’s Quarterly Reports on Form 10-Q and the mailing, if any, of quarterly financial information to shareholders.
(u) Future
Reports to the Representative. For a period commencing on the Effective Date and ending at least five years from
the date of the consummation of the Business Combination or until such earlier time at which the Liquidation occurs, the Company
will furnish to the Representative, c/o Jefferies LLC, at 520 Madison Avenue, New York, New York 10022, Attention: Global
Head of Syndicate: (i) as soon as practicable after the end of each fiscal year, copies of the Annual Report of the Company
containing the balance sheet of the Company as of the close of such fiscal year and statements of income, shareholders’ equity
and cash flows for the year then ended and the opinion thereon of the Company’s independent public or certified public accountants;
(ii) as soon as practicable after the filing thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the Company with the Commission or any securities
exchange; (iii) as soon as available, copies of any report or communication of the Company furnished or made available generally
to holders of its share capital; and (iv) such additional documents and information with respect to the Company and the affairs
of any future subsidiaries of the Company as the Representative may from time to time reasonably request; provided, however,
that the requirements of this Section 3(u) shall be satisfied to the extent that such reports, statement, communications,
financial statements or other documents are available on EDGAR.
(v) Amendments
and Supplements to Permitted Section 5(d) Communications. If at any time following the distribution of
any Permitted Section 5(d) Communication, there occurred or occurs an event or development as a result of which such
Permitted Section 5(d) Communication included or would include an untrue statement of a material fact or omitted or
would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing
at that subsequent time, not misleading, the Company will promptly notify the Representative and will promptly amend or supplement,
at its own expense, such Permitted Section 5(d) Communication to eliminate or correct such untrue statement or omission.
(w) Emerging
Growth Company Status. The Company will promptly notify the Representative if the Company ceases to be an Emerging
Growth Company at any time prior to the later of (i) the time when a prospectus relating to the Offered Securities is not
required by the Securities Act to be delivered (whether physically or through compliance with Rule 172 under the Securities
Act or any similar rule) and (ii) the expiration of the Lock-Up Period.
(x) No
Business Combination with Affiliates. The Company will not consummate a Business Combination with any entity that
is affiliated with the Sponsor or any of the Company’s officers or directors unless it, or a committee of its independent
directors, obtains an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation
or accounting firm that such Business Combination is fair to the Company from a financial point of view; provided that for
purposes of this Section 3(x), an entity will not be deemed an affiliate solely by virtue of ownership by the Sponsor or its
affiliates, or any of their or the Company’s executive officers or directors, of less than 10% of such entity’s
voting securities, individually or in the aggregate. Other than as set forth in this subsection, the Company shall not pay the
Sponsor or its affiliates or any of the Company’s executive officers, directors or any of their respective affiliates any
fees or compensation for services rendered to the Company prior to, or in connection with, the consummation of a Business Combination;
provided, however, that such officers, directors and affiliates (i) may receive reimbursement for out-of-pocket
expenses incurred by them related to identifying, investigating, negotiating and completing a Business Combination to the extent
that such expenses do not exceed the amount of available proceeds not deposited in the Trust Account; (ii) may be repaid for
loans as described in the Registration Statement; and (iii) may be paid up to $10,000 per month for office space, secretarial
and administrative services pursuant to the Administrative Services Agreement.
(y) Consummation
of the Initial Business Combination. The Company may consummate the initial Business Combination and conduct redemptions
of the Class A Ordinary Shares for cash upon consummation of such Business Combination without a shareholder vote pursuant
to Rule 13e-4 and Regulation 14E of the Exchange Act, including by means of the filing of tender offer documents with
the Commission. Such tender offer documents will contain substantially the same financial and other information about the initial
Business Combination and the redemption rights as is required under the Commission’s proxy rules and will provide each
shareholder of the Company with the opportunity prior to the consummation of the initial Business Combination to redeem the Class A
Ordinary Shares held by such shareholder for an amount of cash per share equal to (A) the aggregate amount then on deposit
in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination representing
(x) proceeds held in the Trust Account from the Offering and proceeds from the sale of the Private Placement Shares and (y) any
interest earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes, divided
by (B) the total number of Offered Securities then outstanding. If, however, the Company elects not to file such tender offer
documents, a shareholder vote is required by applicable law or stock exchange rule in connection with the initial Business
Combination, or the Company decides to hold a shareholder vote for business or other legal reasons, the Company will submit such
Business Combination to the Company’s shareholders for their approval (“Business Combination Vote”). With
respect to the initial Business Combination Vote, if any, the Sponsor and each of the Company’s directors and officers party
to the Insider Letter has agreed to vote all of his, her or its respective Founder Shares and any other Class A Ordinary Shares
purchased by him, her or it during or after the Offering in favor of the Company’s initial Business Combination. If the Company
seeks shareholder approval of the initial Business Combination, the Company will offer to each Public Shareholder holding Class A
Ordinary Shares the right to have such Public Shareholder’s Class A Ordinary Shares redeemed in conjunction with a proxy
solicitation pursuant to the proxy rules of the Commission at a per share redemption price (the “Redemption Price”)
equal to (I) the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation
of the initial Business Combination representing (1) proceeds held in the Trust Account from the Offering and proceeds from
the sale of the Private Placement Shares and (2) any interest earned on the funds held in the Trust Account and not previously
released to the Company to pay its income taxes, divided by (II) the total number of Offered Securities then issued and outstanding.
If the Company seeks shareholder approval of the initial Business Combination, the Company may proceed with such Business Combination
only if the Company obtains the approval of an ordinary resolution under Cayman Islands law being the affirmative vote of a majority
of the outstanding ordinary shares represented in person or by proxy and entitled to vote thereon who vote at a general meeting.
A quorum for such meeting will consist of the holders present in person or by proxy of shares of the Company representing a majority
of the voting power of all outstanding shares of the Company entitled to vote at such meeting. If, after seeking and receiving
such shareholder approval, the Company elects to so proceed, it will redeem Class A Ordinary Shares, at the Redemption Price,
from those Public Shareholders who affirmatively requested such redemption. Only Public Shareholders holding Class A Ordinary
Shares who properly exercise their redemption rights in accordance with the applicable tender offer or proxy materials related
to such Business Combination, shall be entitled to receive distributions from the Trust Account in connection with an initial Business
Combination, and the Company shall pay no distributions with respect to any other holders or share capital of the Company in connection
therewith. In the event that the Company does not effect a Business Combination by 24 months from the closing of the
Offering (or such later date as may be approved by the Company’s shareholders), the Company will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter,
redeem 100% of the Offered Securities, 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 the Company
to pay income taxes, if any (less up to $100,000 of interest to pay the Company’s dissolution expenses), divided by the number
of then-outstanding Offered Securities, which redemption will completely extinguish Public Shareholders’ rights as shareholders
(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 the Company’s remaining shareholders and the
Company’s board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other applicable law. Only Public Shareholders holding the
Offered Securities shall be entitled to receive such redemption amounts and the Company shall pay no such redemption amounts or
any distributions in liquidation with respect to any other holders or share capital of the Company. The Sponsor and the Company’s
officers, directors and director nominees will not propose any amendment to the Company’s Amended and Restated Memorandum
and Articles of Association (A) that would modify the substance or timing of the Company’s obligation to allow redemption
in connection with the initial Business Combination or to redeem 100% of the Offered Securities if the Company does not complete
its initial Business Combination within 24 months from the closing of the Offering (or such later date as may be approved
by the Company’s shareholders) or (B) with respect to any other provisions relating to the shareholders rights or pre-initial
Business Combination activity, unless the Company offers the opportunity to redeem the Offered Securities upon approval of any
such amendment at the Redemption Price.
(z) Announcement
of the Consummation of the Initial Business Combination. In the event that the Company desires or is required by
an applicable law or regulation to cause an announcement (“Business Combination Announcement”) to be placed
in The Wall Street Journal, The New York Times or any other news or media publication or outlet or to be made via a public filing
with the Commission announcing the consummation of the Business Combination that indicates that the Underwriters were the underwriters
in the Offering, the Company shall supply the Representative with a draft of the Business Combination Announcement and provide
the Representative with a reasonable advance opportunity to comment thereon, subject to the agreement of the Underwriters to keep
confidential such draft announcement in accordance with the Representative’s standard policies regarding confidential information.
(aa) Payment
of Deferred Discount. Upon the consummation of the initial Business Combination, the Company will pay to the Representative,
on behalf of the Underwriters, the Deferred Discount. Payment of the Deferred Discount will be made out of the proceeds of the
Offering held in the Trust Account, and, concurrent with any transfer of the funds held in the Trust Account to the Company or
any other person, the Company will instruct CST to transfer the Deferred Discount to the Representative in the same percentages
of the total number of Class A Ordinary Shares such Representative purchased and as set forth in Schedule A hereto. The Underwriters
shall have no claim to payment of any interest earned on the portion of the proceeds held in the Trust Account representing the
Deferred Discount. If the Company fails to consummate its initial Business Combination within 24 months from the closing
of the Offering (or such later date as may be approved by the Company’s shareholders), the Deferred Discount will not be
paid to the Representative and will, instead, be included in the Liquidation distribution of the proceeds held in the Trust Account
made to the Public Shareholders. In connection with any such Liquidation, the Underwriters forfeit any rights or claims to the
Deferred Discount.
(bb) Cancellation
of Founder Shares. Upon the earlier to occur of the expiration or termination of the Underwriters’ over-allotment
option, the Company shall cancel or otherwise effect the forfeiture of Founder Shares from the Sponsor in an aggregate amount equal
to the number of Founder Shares determined by multiplying (a) 562,500 by (b) a fraction, (i) the numerator of which
is 2,250,000 minus the number of Optional Securities purchased by the Underwriters upon the exercise of their over-allotment
option, and (ii) the denominator of which is 2,250,000. For the avoidance of doubt, if the Underwriters exercise their
over-allotment option in full, the Company shall not cancel or otherwise effect the forfeiture of any of the Founder Shares pursuant
to this subsection.
(cc) Review
of All Payments to the Sponsor. Prior to the consummation of the initial Business Combination or the Liquidation,
the Company’s audit committee will review on a quarterly basis all payments made by the Company to the Sponsor, to the Company’s
officers or directors, or to the Company’s or any of such other persons’ respective affiliates.
(dd) Compliance
with the “Penny Stock” Laws. The Company agrees that it will use commercially reasonable efforts to
prevent the Company from becoming subject to Rule 419 under the Securities Act prior to the consummation of any Business Combination,
including, but not limited to, using its best efforts to prevent any of the Company’s outstanding securities from being deemed
to be a “penny stock” as defined in Rule 3a51-1 under the Exchange Act during such period.
(ee) Maintenance
of Disclosure Controls, Procedures and Internal Accounting Controls. To the extent required by Rule 13a-15
under the Exchange Act, the Company will maintain “disclosure controls and procedures” (as defined under Rule 13a-15(e) under
the Exchange Act) and a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management’s general or specific authorization, (ii) transactions are recorded as necessary
in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets, (iii) access
to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect
to any differences.
(ff) Compliance
with the Sarbanes-Oxley Act. As soon as legally required to do so, the Company and its directors and officers, in
their capacities as such, shall take all actions necessary to comply with any provision of the Sarbanes-Oxley Act, including Section 402
related to loans and Sections 302 and 906 related to certifications, and to comply with the rules of Nasdaq.
(gg) Compliance
with the Organizational Documents. The Company shall not take any action or omit to take any action that would cause
the Company to be in breach or violation of the Amended and Restated Memorandum and Articles of Association.
(hh) Waiver
of Interests to the Funds. Prior to the consummation of the initial Business Combination, the Company will seek
to have all vendors, service providers (other than the Company’s independent registered public accounting firm), prospective
target businesses, and other entities with which it does business execute agreements with it waiving any right, title, interest
or claim of any kind in or to any monies held in the Trust Account for the benefit of the Public Shareholders. If any third party
refuses to execute an agreement waiving such claims to the monies held in the Trust Account, prior to the consummation of the initial
Business Combination, the Company’s management will consider whether competitive alternatives are reasonably available and
will only enter into an agreement with a third party that has not executed such wavier if the Company’s management believes
that such third party’s engagement would be in the best interests of the Company under the circumstances.
(ii) Maintenance
of Funds in the Trust Account. During the period prior to the Company’s initial Business Combination or Liquidation,
the Company may instruct the trustee under the Trust Agreement to release from the Trust Account funds (i) solely from interest
income earned on the funds held in the Trust Account, the amounts necessary to pay taxes and (ii) to Public Shareholders
who properly redeem their Offered Securities in connection with a vote to approve an amendment to the Amended and Restated Memorandum
and Articles of Association (A) that would modify the substance or timing of the Company’s obligation to allow redemption
in connection with its initial Business Combination or to redeem 100% of the Offered Securities if the Company does not complete
its initial Business Combination within 24 months from the closing of the Offering (or such later date as may be approved
by the Company’s shareholders) or (B) with respect to any other provisions relating to the shareholders’ rights
or pre-initial Business Combination activity. Otherwise, all funds held in the Trust Account (including any interest income earned
on the amounts held in the Trust Account (which interest shall be net of taxes payable)) will remain in the Trust Account until
the earlier of the consummation of the Company’s initial Business Combination and the Liquidation; provided, however,
that in the event of the Liquidation, up to $100,000 of interest income may be released to the Company if the proceeds of the
Offering held outside of the Trust Account are not sufficient to cover the costs and expenses associated with implementing the
Company’s plan of dissolution.
(jj) Notification
and Disclosure of Arrangements Relating to a Business Combination. For a period of 60 days following the
Effective Date, in the event any person or entity (regardless of any FINRA affiliation or association) is engaged to assist the
Company in its search for a merger candidate or to provide any other merger and acquisition services, or has provided or will provide
any investment banking, financial, advisory and/or consulting services to the Company, the Company agrees that it shall promptly
provide to FINRA (via a FINRA submission), the Representative and its counsel a notification prior to entering into the agreement
or transaction relating to a potential Business Combination: (i) the identity of the person or entity providing any such services;
(ii) complete details of all such services and copies of all agreements governing such services prior to entering into the
agreement or transaction; and (iii) justification as to why the value received by any person or entity for such services is
not underwriting compensation for the Offering. The Company also agrees that proper disclosure of such arrangement or potential
arrangement will be made in the tender offer materials or proxy statement, as applicable, which the Company may file in connection
with the Business Combination for purposes of offering redemption of shares held by its shareholders or for soliciting shareholder
approval, as applicable.
(kk) FINRA
Conflict of Interest. The Company shall advise FINRA, the Representative and its counsel if it is aware that any 10%
or greater shareholder of the Company becomes an affiliate or associated person of a member of FINRA participating in the distribution
of the Offered Securities.
Jefferies, on behalf of the several Underwriters,
may, in its sole discretion, waive in writing the performance by the Company of any one or more of the foregoing covenants or extend
the time for their performance.
Section 4. Payment
of Expenses. The Company agrees to pay all costs, fees and expenses incurred in connection with the performance of its
obligations hereunder and in connection with the transactions contemplated hereby, including without limitation (i) all expenses
incident to the issuance and delivery of the Offered Securities (including all printing and engraving costs), (ii) all fees
and expenses of the registrar and transfer agent of the Offered Securities, (iii) all necessary issue, transfer and other
stamp taxes in connection with the issuance and sale of the Offered Securities to the Underwriters, (iv) all fees and expenses
of the Company’s counsel, independent registered public accounting firm and other advisors, (v) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and distribution of the Exchange Act Registration Statement
and the Registration Statement (including financial statements, exhibits, schedules, consents and certificates of experts),
the Time of Sale Prospectus, the Prospectus and each preliminary prospectus, each Permitted Section 5(d) Communication,
and all amendments and supplements thereto, and this Agreement, (vi) all filing fees, attorneys’ fees and expenses incurred
by the Company or the Underwriters in connection with qualifying or registering (or obtaining exemptions from the qualification
or registration of) all or any part of the Offered Securities for offer and sale under the state securities or blue sky laws or
the provincial securities laws of Canada, and, if requested by the Representative, preparing and printing a “Blue Sky Survey”
or memorandum and a “Canadian wrapper”, and any supplements thereto, advising the Underwriters of such qualifications,
registrations and exemptions, in each case, to the extent reasonably requested, (vii) the fees and disbursements of counsel
for the Underwriters in an amount not to exceed $25,000 in connection with, the required review by FINRA, (viii) the costs
and expenses of the Company (and not the Representative) relating to investor presentations on any Road Show, any Permitted Section 5(d) Communication
or any Section 5(d) Oral Communication undertaken in connection with the Offering, including, without limitation, expenses
associated with the preparation or dissemination of any electronic Road Show, expenses associated with the production of Road Show
slides and graphics, fees and expenses of any consultants engaged in connection with the Road Show presentations with the prior
approval of the Company, travel and lodging expenses of the representatives, employees and officers of the Company (and not the
Representative) and any such consultants, and the cost of any aircraft and any other transportation chartered in connection with
the Road Show with the prior consent of the Company, (ix) the fees and expenses associated with listing the Offered Securities
on Nasdaq, and (x) all other fees, costs and expenses of the nature referred to in Item 13 of Part II of the Registration
Statement. Except as provided in this Section 4 or in Section 6, Section 8 or Section 9 hereof, the Underwriters
shall pay their own expenses, including the fees and disbursements of their counsel.
Section 5. Conditions
of the Obligations of the Underwriters. The respective obligations of the several Underwriters hereunder to purchase
and pay for the Offered Securities as provided herein on the First Closing Date and, with respect to the Optional Securities, each
Option Closing Date, shall be subject to the accuracy of the representations and warranties on the part of the Company set forth
in Section 1 hereof as of the date hereof and as of the First Closing Date as though then made and, with respect to the Optional
Securities, as of each Option Closing Date as though then made, to the timely performance by the Company of its covenants and other
obligations hereunder, and to each of the following additional conditions:
(a) Comfort
Letter. On the date hereof, the Representative shall have received from Marcum, independent registered public accountants
for the Company, a letter dated the date hereof addressed to the Underwriters, in form and substance satisfactory to the Representative,
containing statements and information of the type ordinarily included in accountant’s “comfort letters” to underwriters,
delivered according to Statement of Auditing Standards No. 72 (or any successor bulletin), with respect to the audited and
unaudited financial statements and certain financial information contained in the Registration Statement, the Time of Sale Prospectus
and the Prospectus.
(b) Compliance
with Registration Requirements; No Stop Order; No Objection from FINRA.
(i) The
Company shall have filed the Prospectus with the Commission (including the information required by Rule 430A under the Securities
Act) in the manner and within the time period required by Rule 424(b) under the Securities Act.
(ii) No
stop order suspending the effectiveness of the Registration Statement or any post-effective amendment to the Registration Statement
shall be in effect, and no proceedings for such purpose shall have been instituted or threatened by the Commission.
(iii) FINRA
shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements.
(c) No
Prevention or Suspension. No order preventing or suspending the sale of the Class A Ordinary Shares in any
jurisdiction designated by the Representative pursuant to Section 3(g) hereof shall have been issued as of the First
Closing Date and each Option Closing Date, and no proceedings for that purpose shall have been instituted or shall have been threatened.
(d) No
Material Adverse Change. For the period from and after the date of this Agreement and through and including the
First Closing Date and, with respect to any Optional Securities purchased after the First Closing Date, each Option Closing Date,
in the judgment of the Representative, there shall not have been any Material Adverse Change.
(e) Opinion
of Counsel for the Company. On each of the First Closing Date and each Option Closing Date, the Representative shall
have received the opinion of Kirkland & Ellis LLP, U.S. counsel for the Company, dated as of such date, in form and
substance satisfactory to the Representative.
(f) Opinion
of Cayman Islands Counsel for the Company. On each of the First Closing Date and each Option Closing Date, the Representative
shall have received the opinion of Maples and Calder, Cayman Islands counsel for the Company, dated as of such date, in form and
substance satisfactory to the Representative.
(g) Opinion
of Counsel for the Underwriters. On each of the First Closing Date and each Option Closing Date the Representative
shall have received the opinion of Paul Hastings LLP, counsel for the Underwriters in connection with the offer and sale of the
Offered Securities, in form and substance satisfactory to the Representative, dated as of such date, with executed copies for each
of the other Underwriters named on the Prospectus cover page.
(h) Officers’
Certificate. On each of the First Closing Date and each Option Closing Date, the Representative shall have received
a certificate executed by the Chief Executive Officer and the Chief Financial Officer of the Company, dated as of such date, to
the effect set forth in Section 5(b)(ii) and further to the effect that:
(i) for
the period from and including the date of this Agreement through and including such date, there has been no Material Adverse Effect;
(ii) the
representations, warranties, and covenants of the Company set forth in Section 1 of this Agreement are true and correct with
the same force and effect as though expressly made on and as of such date; and
(iii) the
Company has complied with all the agreements hereunder and satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to such date.
(i) Secretary’s
Certificate. The Company shall have furnished to the Representative a certificate signed by the Secretary or Assistant
Secretary of the Company, dated the First Closing Date and each Option Closing Date, certifying (i) that the Amended and Restated
Memorandum and Articles of Association are true and complete, have not been modified and is in full force and effect, (ii) that
the resolutions relating to the Offering contemplated by this Agreement are in full force and effect and have not been modified,
(iii) copies of all correspondence between the Company or its counsel and the Commission, and (iv) as to the incumbency
of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate.
(j) Bring-down
Comfort Letter. On each of the First Closing Date and each Option Closing Date the Representative shall have received
from Marcum, independent registered public accountants for the Company, a letter dated such date, in form and substance satisfactory
to the Representative, which letter shall: (i) reaffirm the statements made in the letter furnished by them pursuant to Section 5(a),
except that the specified date referred to therein for the carrying out of procedures shall be no more than three business days
prior to the First Closing Date or the applicable Option Closing Date, as the case may be; and (ii) cover certain financial
information contained in the Prospectus.
(k) Transactional
Documents. On or prior to the First Closing Date, the Company shall have delivered to the Representative executed
copies of the Trust Agreement, the Subscription Agreement, the Private Placement Purchase Agreement, the Registration and Shareholder
Rights Agreement the Administrative Services Agreement and the Insider Letter, and each such agreement shall be in full force and
effect on each of the First Closing Date and each Option Closing Date. With regard to the Insider Letter, if any additional persons
shall become executive officers, directors or director nominees of the Company prior to the end of the Lock-up Period, the Company
shall cause each such person, prior to or contemporaneously with their appointment or election as an executive officer, director
or director nominee to execute a joinder to the Insider Letter.
(l) Deposit
to the Trust Account. The Sponsor (at least one business day prior to the First Closing Date and each Option Closing
Date), shall have caused proceeds from the sale of the Private Placement Shares to be deposited into the Trust Account so that
together with proceeds for the Firm Securities (including the Deferred Discount), or with respect to the Optional Securities, proceeds
from the Optional Securities (including the Deferred Discount), the aggregate amount of money deposited into the Trust Account
would equal the product of the number of Class A Ordinary Shares issued and the public offering price per Class A Ordinary
Share as set forth on the cover of the Prospectus.
(m) Rule 462(b) Registration
Statement. In the event that a Rule 462(b) Registration Statement is filed in connection with the Offering
contemplated by this Agreement, such Rule 462(b) Registration Statement shall have been filed with the Commission on
the date of this Agreement and shall have become effective automatically upon such filing.
(n) Approval
of Listing. At the First Closing Date, the Offered Securities shall have been approved for listing on Nasdaq, subject
only to official notice of issuance.
(o) Additional
Documents. On or before each of the First Closing Date and each Option Closing Date, the Representative and counsel
for the Underwriters shall have received such information, documents and opinions as they may reasonably request for the purposes
of enabling them to pass upon the issuance and sale of the Offered Securities as contemplated herein, or in order to evidence the
accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained;
and all proceedings taken by the Company in connection with the issuance and sale of the Offered Securities as contemplated herein
and in connection with the other transactions contemplated by this Agreement shall be satisfactory in form and substance to the
Representative and counsel for the Underwriters.
If any condition specified in this Section 5
is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Representative by notice from the
Representative to the Company at any time on or prior to the First Closing Date and, with respect to the Optional Securities, at
any time on or prior to the applicable Option Closing Date, which termination shall be without liability on the part of any party
to any other party, except that Section 4, Section 6, Section 8 and Section 9 shall at all times be effective
and shall survive such termination.
Section 6. Reimbursement
of Underwriters’ Expenses. If this Agreement is terminated by the Representative pursuant to Section 5, Section 10
or Section 11, or if the sale to the Underwriters of the Offered Securities on the First Closing Date is not consummated because
of any refusal, inability or failure on the part of the Company to perform any agreement herein or to comply with any provision
hereof, the Company agrees to reimburse the Representative and the other Underwriters (or such Underwriters as have terminated
this Agreement with respect to themselves), severally, upon demand for all out-of-pocket expenses that shall have been reasonably
incurred by the Representative and the Underwriters in connection with the proposed purchase and the Offering and sale of the Offered
Securities, including, but not limited to, reasonable fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.
Section 7. Effectiveness
of this Agreement. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.
Section 8. Indemnification.
(a) Indemnification
of the Underwriters. The Company agrees to indemnify and hold harmless each Underwriter, its affiliates, directors,
officers, employees and agents, and each person, if any, who controls any Underwriter within the meaning of the Securities Act
or the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Underwriter or such affiliate,
director, officer, employee, agent or controlling person may become subject, under the Securities Act, the Exchange Act, other
federal or state statutory law or regulation, or the laws or regulations of foreign jurisdictions where Offered Securities have
been offered or sold or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with
the written consent of the Company), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any amendment thereto, or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading; or (ii) any untrue statement
or alleged untrue statement of a material fact included in any preliminary prospectus, the Time of Sale Prospectus, any Marketing
Material, any Section 5(d) Written Communication or the Prospectus (or any amendment or supplement to the foregoing),
or the omission or alleged omission to state therein a material fact necessary in order to make the statements, in the light of
the circumstances under which they were made, not misleading; or (iii) any act or failure to act or any alleged act or failure
to act by any Underwriter in connection with, or relating in any manner to, the securities of the Company or the Offering contemplated
hereby, and which is included as part of or referred to in any loss, claim, damage, liability or action arising out of or based
upon any matter covered by clause (i) or (ii) above; and to reimburse each Underwriter and each such affiliate,
director, officer, employee, agent and controlling person for any and all expenses (including the fees and disbursements of counsel)
as such expenses are incurred by such Underwriter or such affiliate, director, officer, employee, agent or controlling person in
connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage, liability
or expense to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and in conformity with information relating to any Underwriter furnished
to the Company by the Representative in writing expressly for use in the Registration Statement, any preliminary prospectus, the
Time of Sale Prospectus, any Marketing Material, any Section 5(d) Written Communication or the Prospectus (or any amendment
or supplement thereto), it being understood and agreed that the only such information consists of the information described in
Section 8(b) below. The indemnity agreement set forth in this Section 8(a) shall be in addition to any liabilities
that the Company may otherwise have.
(b) Indemnification
of the Company, its Directors and Officers. Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement and each person, if
any, who controls the Company within the meaning of the Securities Act or the Exchange Act, against any loss, claim, damage, liability
or expense, as incurred, to which the Company, or any such director, officer or controlling person may become subject, under the
Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or the laws or regulations of foreign
jurisdictions where the Offered Securities have been offered or sold or at common law or otherwise (including in settlement of
any litigation, if such settlement is effected with the written consent of such Underwriter), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, or any omission
or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein
not misleading or (ii) any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus,
the Time of Sale Prospectus, any Marketing Material, any Section 5(d) Written Communication or the Prospectus (or any
such amendment or supplement) or the omission or alleged omission to state therein a material fact necessary in order to make the
statements, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration
Statement, such preliminary prospectus, the Time of Sale Prospectus, such Marketing Material, such Section 5(d) Written
Communication or the Prospectus (or any such amendment or supplement), in reliance upon and in conformity with information relating
to such Underwriter furnished to the Company by the Representative in writing expressly for use therein; and to reimburse the Company,
or any such director, officer or controlling person for any and all expenses (including the fees and disbursements of counsel)
as such expenses are incurred by the Company, or any such director, officer or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. The Company hereby acknowledges
that the only information that the Representative has furnished to the Company expressly for use in the Registration Statement,
any preliminary prospectus, the Time of Sale Prospectus, any Marketing Material, any Section 5(d) Written Communication
or the Prospectus (or any amendment or supplement to the foregoing) are the following statements set forth under the heading “Underwriting”:
(x) the list of Underwriters and their respective roles and participation in the sale of the Offered Securities, (y) the
first sentence in the third paragraph, the third sentence in the fourth paragraph, the fifth paragraph (except for the last
sentence therein), and (z) the first sentence in the first paragraph, the third sentence in the second paragraph and the first
sentence in the sixth paragraph under the heading “Stabilization”, in the Preliminary Prospectus and the Prospectus.
The indemnity agreement set forth in this Section 8(b) shall be in addition to any liabilities that each Underwriter
may otherwise have.
(c) Notifications
and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying
party under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the omission to so notify
the indemnifying party will not relieve the indemnifying party from any liability which it may have to any indemnified party to
the extent the indemnifying party is not materially prejudiced as a proximate result of such failure and shall not in any event
relieve the indemnifying party from any liability that it may have otherwise than on account of this indemnity agreement. In case
any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it shall elect, jointly
with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in
the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of such indemnifying party’s election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 8 for
any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the fees and expenses of more than one separate counsel (together
with local counsel), representing the indemnified parties who are parties to such action), which counsel (together with any local
counsel) for the indemnified parties shall be selected by the Representative (in the case of counsel for the indemnified parties
referred to in Section 8(a) above) or by the Company (in the case of counsel for the indemnified parties referred to
in Section 8(b) above) or (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying
party, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying party and shall be paid
as they are incurred.
(d) Settlements.
The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by Section 8(c) hereof, the indemnifying party
shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered
into more than 60 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have reasonable notice of the terms of such settlement at least 30 days prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect
any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect
of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such action, suit or proceeding and does not include an admission of fault or culpability
or a failure to act by or on behalf of such indemnified party.
Section 9. Contribution.
If the indemnification provided for in Section 8 is for any reason held to be unavailable to or otherwise insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then
each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result
of any losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, from the Offering pursuant
to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company, on the one hand, and the Underwriters, on the other hand, in connection with the statements
or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, in connection with the
Offering pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the
Offering pursuant to this Agreement (before deducting expenses) received by the Company, and the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth on the front cover page of the Prospectus, bear to the
aggregate initial public offering price of the Offered Securities as set forth on such cover. The relative fault of the Company,
on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or the Underwriters, on the other hand, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as
a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 8(c), any legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in Section 8(c) with respect to notice
of commencement of any action shall apply if a claim for contribution is to be made under this Section 9; provided,
however, that no additional notice shall be required with respect to any action for which notice has been given under Section 8(c) for
purposes of indemnification.
The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9,
no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions received by such
Underwriter in connection with the Offered Securities underwritten by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant
to this Section 9 are several, and not joint, in proportion to their respective underwriting commitments as set forth opposite
their respective names on Schedule A. For purposes of this Section 9, each affiliate, director, officer, employee
and agent of an Underwriter and each person, if any, who controls an Underwriter within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of
the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of the
Securities Act and the Exchange Act shall have the same rights to contribution as the Company.
Section 10. Default
of One or More of the Several Underwriters. If, on the First Closing Date or any Option Closing Date any one or more
of the several Underwriters shall fail or refuse to purchase Offered Securities that it has or they have agreed to purchase hereunder
on such date, and the aggregate number of Offered Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase does not exceed 10% of the aggregate number of the Offered Securities to be purchased on such date,
the Representative may make arrangements satisfactory to the Company for the purchase of such Offered Securities by other persons,
including any of the Underwriters, but if no such arrangements are made by such date, the other Underwriters shall be obligated,
severally and not jointly, in the proportions that the number of Firm Securities set forth opposite their respective names on Schedule A
bears to the aggregate number of Firm Securities set forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as may be specified by the Representative with the consent of the non-defaulting Underwriters, to purchase the
Offered Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date. If,
on the First Closing Date or any Option Closing Date any one or more of the Underwriters shall fail or refuse to purchase Offered
Securities and the aggregate number of Offered Securities with respect to which such default occurs exceeds 10% of the aggregate
number of Offered Securities to be purchased on such date, and arrangements satisfactory to the Representative and the Company
for the purchase of such Offered Securities are not made within 48 hours after such default, this Agreement shall terminate
without liability of any party to any other party except that the provisions of Section 4, Section 6, Section 8
and Section 9 shall at all times be effective and shall survive such termination. In any such case either the Representative
or the Company shall have the right to postpone the First Closing Date or the applicable Option Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes, if any, to the Registration Statement and the Prospectus
or any other documents or arrangements may be effected.
As used in this Agreement, the term “Underwriter”
shall be deemed to include any person substituted for a defaulting Underwriter under this Section 10. Any action taken under
this Section 10 shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter
under this Agreement.
Section 11. Termination
of this Agreement. Prior to the purchase of the Firm Securities by the Underwriters on the First Closing Date, this
Agreement may be terminated by the Representative by notice given to the Company if at any time: (i) trading or quotation
in any of the Company’s securities shall have been suspended or limited by the Commission or by Nasdaq, or trading in securities
generally on either Nasdaq or the New York Stock Exchange shall have been suspended or limited, or minimum or maximum prices shall
have been generally established on any of such stock exchanges; (ii) a general banking moratorium shall have been declared
by either U.S. federal or New York state authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change in the United States or international financial
markets, or any substantial change or development involving a prospective substantial change in United States’ or international
political, financial or economic conditions, as in the judgment of the Representative is material and adverse and makes it impracticable
to proceed with the offering or delivery of the Offered Securities in the manner and on the terms described in the Time of Sale
Prospectus or the Prospectus or to enforce contracts for the sale of securities; (iv) in the judgment of the Representative
there shall have been any Material Adverse Change; or (v) the Company shall have sustained a loss by strike, fire, flood,
earthquake, accident or other calamity of such character as in the judgment of the Representative may interfere materially with
the conduct of the business and operations of the Company regardless of whether or not such loss shall have been insured. Any
termination pursuant to this Section 11 shall be without liability on the part of (a) the Company to any Underwriter,
except that the Company shall be obligated to reimburse the expenses of the Representative and the Underwriters pursuant to Section 4
or Section 6 hereof or (b) any Underwriter to the Company; provided, however, that the provisions of Section 8
and Section 9 shall at all times be effective and shall survive such termination.
Section 12. No
Advisory or Fiduciary Relationship. The Company acknowledges and agrees that (a) the purchase and sale of the Offered
Securities pursuant to this Agreement, including the determination of the public offering price of the Offered Securities and any
related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the
several Underwriters, on the other hand, (b) in connection with the Offering contemplated hereby and the process leading to
such transaction, each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company,
or its shareholders, its creditors, employees or any other party, (c) no Underwriter has assumed or will assume an advisory
or fiduciary responsibility in favor of the Company with respect to the Offering contemplated hereby or the process leading thereto
(irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) and no Underwriter
has any obligation to the Company with respect to the Offering contemplated hereby except the obligations expressly set forth in
this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Company, and (e) the Underwriters have not provided any legal, accounting,
regulatory or tax advice with respect to the Offering contemplated hereby and the Company has consulted its own legal, accounting,
regulatory and tax advisors to the extent it deemed appropriate.
Section 13. Representations
and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements
of the Company, of its officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or any of its or
their partners, officers, directors, employees, agents or any controlling person, as the case may be, and, anything herein to the
contrary notwithstanding, will survive delivery of and payment for the Offered Securities sold hereunder and any termination of
this Agreement.
Section 14. Notices.
All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
| If to the Representative: | Jefferies LLC
520 Madison Avenue
New York, New York 10022
Facsimile: (646) 619-4437
Attention: General Counsel |
| with a copy to: | Paul Hastings LLP
515 South Flower Street, Twenty-Fifth Floor
Los Angeles, CA 90071
Facsimile: (213) 627-0705
Attention: Frank Lopez and Jonathan Ko |
| If to the Company: | HealthCor Catalio Acquisition Corp.
55 Hudson Yards, 28th Floor
New York, New York 10001
Attention: Anabelle Perez Gray
Email: anabelle@hccspac.com |
| with a copy to: | Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Facsimile: (212) 446-4900
Attention: Christian O. Nagler and Debbie P. Yee |
Any party hereto may change the address for receipt of communications
by giving written notice to the others.
Section 15. Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 10 hereof, and to the benefit of the affiliates, directors, officers, employees, agents and controlling persons
referred to in Section 8 and Section 9, and in each case their respective successors, and personal representatives, and
no other person will have any right or obligation hereunder. The term “successors” shall not include any purchaser
of the Offered Securities as such from any of the Underwriters merely by reason of such purchase.
Section 16. Partial
Unenforceability. The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other section, paragraph or provision hereof. If any section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes
(and only such minor changes) as are necessary to make it valid and enforceable.
Section 17. Recognition
of the U.S. Special Resolution Regimes
In the event that any Underwriter that is
a Covered Entity (as defined below) becomes subject to a proceeding under a U.S. Special Resolution Regime (as defined below),
the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective
to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any
such interest and obligation herein, were governed by the laws of the United States or a state of the United States.
In the event that any Underwriter that is
a Covered Entity or a BHC Act Affiliate (as defined below) of such Underwriter becomes subject to a proceeding under a U.S. Special
Resolution Regime, Default Rights (as defined below) under this Agreement that may be exercised against such Underwriter are permitted
to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime
if this Agreement were governed by the laws of the United States or a state of the United States.
For purposes of this Agreement, (A) “BHC
Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance
with, 12 U.S.C. § 1841(k); (B) “Covered Entity” means any of the following: (i) a “covered
entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered
bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered
FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); (C) “Default
Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§
252.81, 47.2 or 382.1, as applicable; and (D) “U.S. Special Resolution Regime” means each of
(i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank
Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
Section 18. Governing
Law Provisions. This Agreement shall be governed by and construed in accordance with the internal laws of the State
of New York applicable to agreements made and to be performed in such state. Any legal suit, action or proceeding arising out of
or based upon this Agreement or the transactions contemplated hereby may be instituted in the federal courts of the United States
of America located in the Borough of Manhattan in the City of New York or the courts of the State of New York in each case located
in the Borough of Manhattan in the City of New York (collectively, the “Specified Courts”), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such
court, as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of any process,
summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to
the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and
agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been
brought in an inconvenient forum.
Section 19. General
Provisions. This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof.
This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless in writing
by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party
whom the condition is meant to benefit. The section headings herein are for the convenience of the parties only and shall not affect
the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges
that it is a sophisticated business person who was adequately represented by counsel during negotiations regarding the provisions
hereof, including, without limitation, the indemnification provisions of Section 8 and the contribution provisions of Section 9,
and is fully informed regarding said provisions. Each of the parties hereto further acknowledges that the provisions of Section 8
and Section 9 hereof fairly allocate the risks in light of the ability of the parties to investigate the Company, its affairs
and its business in order to assure that adequate disclosure has been made in the Registration Statement, any preliminary prospectus,
the Time of Sale Prospectus and the Prospectus (and any amendments and supplements to the foregoing), as contemplated by the Securities
Act and the Exchange Act.
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to the Company the enclosed copies hereof, whereupon this instrument, along with all counterparts
hereof, shall become a binding agreement in accordance with its terms.
| | HEALTHCOR CATALIO ACQUISITION CORP. |
[Signature Page to Underwriting Agreement]
The foregoing Underwriting Agreement is
hereby confirmed and accepted by the Representative in New York, New York as of the date first above written.
| JEFFERIES
LLC |
|
| |
|
| By: | |
|
| | Name: |
|
| | Title: |
|
| | |
|
| For
itself and the other several Underwriters listed on Schedule A hereto |
|
[Signature Page to Underwriting Agreement]
Schedule A
| Underwriters | |
Number of
Firm
Securities
to be
Purchased | |
| Jefferies LLC | |
| 15,000,000 | |
Schedule B
Time of Delivery Information
| 1. | Public offering price per Class A ordinary share: $10.00 |
| 2. | Number of Class A ordinary shares offered: 15,000,000 (plus an additional 2,250,000 Class A ordinary shares
subject to the underwriters’ over-allotment option) |
Schedule C
Permitted Section 5(d) Communications
Reference is made to the materials used in the testing the waters
presentation made to potential investors by the Company, to the extent such materials are deemed to be a “written communication”
within the meaning of Rule 405 under the Act.
Exhibit 3.2
THE COMPANIES ACT (2020 Revision)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM AND ARTICLES OF ASSOCIATION
OF
HealthCor
Catalio Acquisition Corp.
(adopted
by special resolution dated [Date] and effective on [date])
THE COMPANIES ACT (2020 Revision)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM OF ASSOCIATION
OF
HealthCor
Catalio Acquisition Corp.
(adopted
by special resolution dated [Date] and effective on [date])
| 1 | The name of the Company is HealthCor Catalio Acquisition Corp. |
| 2 | The Registered Office of the Company shall be at the offices of Maples Corporate Services Limited,
PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other place within the Cayman Islands as the Directors
may decide. |
| 3 | The objects for which the Company is established are unrestricted and the Company shall have full
power and authority to carry out any object not prohibited by the laws of the Cayman Islands. |
| 4 | The liability of each Member is limited to the amount unpaid on such Member's shares. |
| 5 | The share capital of the Company is US$55,500 divided into 500,000,000 Class A ordinary shares
of a par value of US$0.0001 each, 50,000,000 Class B ordinary shares of a par value of US$0.0001 each and 5,000,000 preference
shares of a par value of US$0.0001 each. |
| 6 | The Company has power to register by way of continuation as a body corporate limited by shares
under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands. |
| 7 | Capitalised terms that are not defined in this Amended and Restated Memorandum of Association bear
the respective meanings given to them in the Amended and Restated Articles of Association of the Company. |
THE COMPANIES ACT (2020 Revision)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
HealthCor
Catalio Acquisition Corp.
(adopted
by special resolution dated [Date] and effective on [date])
| 1.1 | In the Articles Table A in the First Schedule to the Statute does not apply and, unless there is
something in the subject or context inconsistent therewith: |
| "Affiliate" |
in respect of a person, means any other person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such person, and (a) in the case of a natural person, shall include, without limitation, such person’s spouse, parents, children, siblings, mother-in-law and father-in-law and brothers and sisters-in-law, whether by blood, marriage or adoption or anyone residing in such person’s home, a trust for the benefit of any of the foregoing, a company, partnership or any natural person or entity wholly or jointly owned by any of the foregoing and (b) in the case of an entity, shall include a partnership, a corporation or any natural person or entity which directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such entity. |
| |
|
| "Applicable Law" |
means, with respect to any person, all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates, judgments, decisions, decrees or orders of any governmental authority applicable to such person. |
| |
|
| "Articles" |
means these amended and restated articles of association of the Company. |
| |
|
| "Audit Committee" |
means the audit committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. |
| "Auditor" |
means the person for the time being performing the duties of auditor of the Company (if any). |
| |
|
| "Business Combination" |
means a merger, share exchange, asset acquisition, share purchase, reorganisation or similar business combination involving the Company, with one or more businesses or entities (the "target business"), which Business Combination: (a) as long as the securities of the Company are listed on the Nasdaq Capital Market, must occur with one or more target businesses that together have an aggregate fair market value of at least 80 per cent of the assets held in the Trust Account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the Trust Account) at the time of the signing of the definitive agreement to enter into such Business Combination; and (b) must not be solely effectuated with another blank cheque company or a similar company with nominal operations. |
| |
|
| "business day" |
means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorised or obligated by law to close in New York City. |
| |
|
| "Clearing House" |
means a clearing house recognised by the laws of the jurisdiction in which the Shares (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such jurisdiction. |
| |
|
| "Class A Share" |
means a Class A ordinary share of a par value of US$0.0001 in the share capital of the Company. |
| |
|
| "Class B Share" |
means a Class B ordinary share of a par value of US$0.0001 in the share capital of the Company. |
| |
|
| "Company" |
means the above named company. |
| |
|
| "Company’s Website" |
means the website of the Company and/or its web-address or domain name (if any). |
| |
|
| "Compensation Committee" |
means the compensation committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. |
| |
|
| "Designated Stock Exchange" |
means any United States national securities exchange on which the securities of the Company are listed for trading, including the New York Stock Exchange or the Nasdaq Capital Market. |
| |
|
| "Directors" |
means the directors for the time being of the Company. |
| |
|
| "Dividend" |
means any dividend (whether interim or final) resolved to be paid on Shares pursuant to the Articles. |
| |
|
| "Electronic Communication" |
means a communication sent by electronic means, including electronic posting to the Company’s Website, transmission to any number, address or internet website (including the website of the Securities and Exchange Commission) or other electronic delivery methods as otherwise decided and approved by the Directors. |
| |
|
| "Electronic Record" |
has the same meaning as in the Electronic Transactions Act. |
| |
|
| "Electronic Transactions Act" |
means the Electronic Transactions Act (2003 Revision) of the Cayman Islands. |
| |
|
| "Equity-linked Securities" |
means any debt or equity securities that are convertible, exercisable or exchangeable for Class A Shares issued in a financing transaction in connection with a Business Combination, including but not limited to a private placement of equity or debt. |
| |
|
| "Exchange Act" |
means the United States Securities Exchange Act of 1934, as amended, or any similar U.S. federal statute and the rules and regulations of the Securities and Exchange Commission thereunder, all as the same shall be in effect at the time. |
| |
|
| "Founders" |
means all Members immediately prior to the consummation of the IPO. |
| |
|
| "Independent Director" |
has the same meaning as in the rules and regulations of the Designated Stock Exchange or in Rule 10A-3 under the Exchange Act, as the case may be. |
| |
|
| "IPO" |
means the Company's initial public offering of securities. |
| |
|
| "Member" |
has the same meaning as in the Statute. |
| |
|
| "Memorandum" |
means the amended and restated memorandum of association of the Company. |
| |
|
| "Nominating and Corporate Governance Committee" |
means the nominating and corporate governance committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. |
| |
|
| "Officer" |
means a person appointed to hold an office in the Company. |
| |
|
| "Ordinary Resolution" |
means a resolution passed by a simple majority of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and includes a unanimous written resolution. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles. |
| |
|
| "Over-Allotment Option" |
means the option of the Underwriters to purchase up to an additional 15 per cent of the firm Class A Shares issued in the IPO at a price equal to US$10 per share, less underwriting discounts and commissions. |
| |
|
| "Preference Share" |
means a preference share of a par value of US$0.0001 in the share capital of the Company. |
| |
|
| "Public Share" |
means a Class A Share issued in the IPO. |
| |
|
| "Redemption Notice" |
means a notice in a form approved by the Company by which a holder of Public Shares is entitled to require the Company to redeem its Public Shares, subject to any conditions contained therein. |
| |
|
| "Register of Members" |
means the register of Members maintained in accordance with the Statute and includes (except where otherwise stated) any branch or duplicate register of Members. |
| |
|
| "Registered Office" |
means the registered office for the time being of the Company. |
| |
|
| "Representative" |
means a representative of the Underwriters. |
| |
|
| "Seal" |
means the common seal of the Company and includes every duplicate seal. |
| |
|
| "Securities and Exchange Commission" |
means the United States Securities and Exchange Commission. |
| |
|
| "Share" |
means a Class A Share, a Class B Share or a Preference Share and includes a fraction of a share in the Company. |
| |
|
| "Special Resolution" |
subject to Article 29.4, has the same meaning as in the Statute, and includes a unanimous written resolution. |
| |
|
| "Sponsor" |
means HC Sponsor LLC, a Cayman Islands limited liability company, and its successors or assigns. |
| |
|
| "Statute" |
means the Companies Act (2020 Revision) of the Cayman Islands. |
| |
|
| "Treasury Share" |
means a Share held in the name of the Company as a treasury share in accordance with the Statute. |
| |
|
| "Trust Account" |
means the trust account established by the Company upon the consummation of its IPO and into which a certain amount of the net proceeds of the IPO, together with a certain amount of the proceeds of a private placement of Class A Shares simultaneously with the closing date of the IPO, will be deposited. |
| |
|
| "Underwriter" |
means an underwriter of the IPO from time to time and any successor underwriter. |
| (a) | words importing the singular number include the plural number and vice versa; |
| (b) | words importing the masculine gender include the feminine gender; |
| (c) | words importing persons include corporations as well as any other legal or natural person; |
| (d) | "written" and "in writing" include all modes of representing or reproducing
words in visible form, including in the form of an Electronic Record; |
| (e) | "shall" shall be construed as imperative and "may" shall be construed as permissive; |
| (f) | references to provisions of any law or regulation shall be construed as references to those provisions
as amended, modified, re-enacted or replaced; |
| (g) | any phrase introduced by the terms "including", "include", "in particular"
or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms; |
| (h) | the term "and/or" is used herein to mean both "and" as well as "or."
The use of "and/or" in certain contexts in no respects qualifies or modifies the use of the terms "and" or
"or" in others. The term "or" shall not be interpreted to be exclusive and the term "and" shall not
be interpreted to require the conjunctive (in each case, unless the context otherwise requires); |
| (i) | headings are inserted for reference only and shall be ignored in construing the Articles; |
| (j) | any requirements as to delivery under the Articles include delivery in the form of an Electronic
Record; |
| (k) | any requirements as to execution or signature under the Articles including the execution of the
Articles themselves can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Act; |
| (l) | sections 8 and 19(3) of the Electronic Transactions Act shall not apply; |
| (m) | the term "clear days" in relation to the period of a notice means that period excluding
the day when the notice is received or deemed to be received and the day for which it is given or on which it is to take effect;
and |
| (n) | the term "holder" in relation to a Share means a person whose name is entered in the
Register of Members as the holder of such Share. |
| 2 | Commencement of Business |
| 2.1 | The business of the Company may be commenced as soon after incorporation of the Company as the
Directors shall see fit. |
| 2.2 | The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred
in or about the formation and establishment of the Company, including the expenses of registration. |
| 3 | Issue of Shares and other Securities |
| 3.1 | Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by
the Company in general meeting) and, where applicable, the rules and regulations of the Designated Stock Exchange, the Securities
and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, and without prejudice
to any rights attached to any existing Shares, the Directors may allot, issue, grant options over or otherwise dispose of Shares
(including fractions of a Share) with or without preferred, deferred or other rights or restrictions, whether in regard to Dividends
or other distributions, voting, return of capital or otherwise and to such persons, at such times and on such other terms as they
think proper, and may also (subject to the Statute and the Articles) vary such rights, save that the Directors shall not allot,
issue, grant options over or otherwise dispose of Shares (including fractions of a Share) to the extent that it may affect the
ability of the Company to carry out a Class B Ordinary Share Conversion set out in the Articles. |
| 3.2 | The Company shall not issue Shares to bearer. |
| 4.1 | The Company shall maintain or cause to be maintained the Register of Members in accordance with
the Statute. |
| 4.2 | The Directors may determine that the Company shall maintain one or more branch registers of Members
in accordance with the Statute. The Directors may also determine which register of Members shall constitute the principal register
and which shall constitute the branch register or registers, and to vary such determination from time to time. |
| 5 | Closing Register of Members or Fixing Record Date |
| 5.1 | For the purpose of determining Members entitled to notice of, or to vote at any meeting of Members
or any adjournment thereof, or Members entitled to receive payment of any Dividend or other distribution, or in order to make a
determination of Members for any other purpose, the Directors may, after notice has been given by advertisement in an appointed
newspaper or any other newspaper or by any other means in accordance with the rules and regulations of the Designated Stock
Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable
Law, provide that the Register of Members shall be closed for transfers for a stated period which shall not in any case exceed
forty days. |
| 5.2 | In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or
arrears a date as the record date for any such determination of Members entitled to notice of, or to vote at any meeting of the
Members or any adjournment thereof, or for the purpose of determining the Members entitled to receive payment of any Dividend or
other distribution, or in order to make a determination of Members for any other purpose. |
| 5.3 | If the Register of Members is not so closed and no record date is fixed for the determination of
Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment of a Dividend or other
distribution, the date on which notice of the meeting is sent or the date on which the resolution of the Directors resolving to
pay such Dividend or other distribution is passed, as the case may be, shall be the record date for such determination of Members.
When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination
shall apply to any adjournment thereof. |
| 6.1 | A Member shall only be entitled to a share certificate if the Directors resolve that share certificates
shall be issued. Share certificates representing Shares, if any, shall be in such form as the Directors may determine. Share certificates
shall be signed by one or more Directors or other person authorised by the Directors. The Directors may authorise certificates
to be issued with the authorised signature(s) affixed by mechanical process. All certificates for Shares shall be consecutively
numbered or otherwise identified and shall specify the Shares to which they relate. All certificates surrendered to the Company
for transfer shall be cancelled and, subject to the Articles, no new certificate shall be issued until the former certificate representing
a like number of relevant Shares shall have been surrendered and cancelled. |
| 6.2 | The Company shall not be bound to issue more than one certificate for Shares held jointly by more
than one person and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them. |
| 6.3 | If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms
(if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating evidence,
as the Directors may prescribe, and (in the case of defacement or wearing out) upon delivery of the old certificate. |
| 6.4 | Every share certificate sent in accordance with the Articles will be sent at the risk of the Member
or other person entitled to the certificate. The Company will not be responsible for any share certificate lost or delayed in the
course of delivery. |
| 6.5 | Share certificates shall be issued within the relevant time limit as prescribed by the Statute,
if applicable, or as the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or
any other competent regulatory authority or otherwise under Applicable Law may from time to time determine, whichever is shorter,
after the allotment or, except in the case of a Share transfer which the Company is for the time being entitled to refuse to register
and does not register, after lodgement of a Share transfer with the Company. |
| 7.1 | Subject to the terms of the Articles, any Member may transfer all or any of his Shares by an instrument
of transfer provided that such transfer complies with the rules and regulations of the Designated Stock Exchange, the Securities
and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. |
| 7.2 | The instrument of transfer of any Share shall be in writing in the usual or common form or in a
form prescribed by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or
any other competent regulatory authority or otherwise under Applicable Law or in any other form approved by the Directors and shall
be executed by or on behalf of the transferor (and if the Directors so require, signed by or on behalf of the transferee) and may
be under hand or, if the transferor or transferee is a Clearing House or its nominee(s), by hand or by machine imprinted signature
or by such other manner of execution as the Directors may approve from time to time. The transferor shall be deemed to remain the
holder of a Share until the name of the transferee is entered in the Register of Members. |
| 8 | Redemption, Repurchase and Surrender of Shares |
| 8.1 | Subject to the provisions of the Statute, and, where applicable, the rules and regulations
of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise
under Applicable Law, the Company may issue Shares that are to be redeemed or are liable to be redeemed at the option of the Member
or the Company. The redemption of such Shares, except Public Shares, shall be effected in such manner and upon such other terms
as the Company may, by Special Resolution, determine before the issue of such Shares. With respect to redeeming or repurchasing
the Shares: |
| (a) | Members who hold Public Shares are entitled to request the redemption of such Shares in the circumstances
described in the Business Combination Article hereof; |
| (b) | Class B Shares held by the Sponsor shall be surrendered by the Sponsor for no consideration
to the extent that the Over-Allotment Option is not exercised in full so that the Founders will own 20 per cent of the Company's
issued Shares after the IPO (exclusive of any securities purchased in a private placement simultaneously with the IPO); and |
| (c) | Public Shares shall be repurchased by way of tender offer in the circumstances set out in the Business
Combination Article hereof. |
| 8.2 | Subject to the provisions of the Statute, and, where applicable, the rules and regulations
of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise
under Applicable Law, the Company may purchase its own Shares (including any redeemable Shares) in such manner and on such other
terms as the Directors may agree with the relevant Member. For the avoidance of doubt, redemptions, repurchases and surrenders
of Shares in the circumstances described in the Article above shall not require further approval of the Members. |
| 8.3 | The Company may make a payment in respect of the redemption or purchase of its own Shares in any
manner permitted by the Statute, including out of capital. |
| 8.4 | The Directors may accept the surrender for no consideration of any fully paid Share. |
| 9.1 | The Directors may, prior to the purchase, redemption or surrender of any Share, determine that
such Share shall be held as a Treasury Share. |
| 9.2 | The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms
as they think proper (including, without limitation, for nil consideration). |
| 10 | Variation of Rights of Shares |
| 10.1 | Subject to Article 3.1, if at any time the share capital of the Company is divided into different
classes of Shares, all or any of the rights attached to any class (unless otherwise provided by the terms of issue of the Shares
of that class) may, whether or not the Company is being wound up, be varied without the consent of the holders of the issued Shares
of that class where such variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise,
any such variation shall be made only with the consent in writing of the holders of not less than two thirds of the issued Shares
of that class (other than with respect to a waiver of the provisions of the Class B Ordinary Share Conversion Article hereof,
which as stated therein shall only require the consent in writing of the holders of a majority of the issued Shares of that class),
or with the approval of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of
the holders of the Shares of that class. For the avoidance of doubt, the Directors reserve the right, notwithstanding that any
such variation may not have a material adverse effect, to obtain consent from the holders of Shares of the relevant class. To any
such meeting all the provisions of the Articles relating to general meetings shall apply mutatis mutandis, except that the
necessary quorum shall be one person holding or representing by proxy at least one third of the issued Shares of the class and
that any holder of Shares of the class present in person or by proxy may demand a poll. |
| 10.2 | For the purposes of a separate class meeting, the Directors may treat two or more or all the classes
of Shares as forming one class of Shares if the Directors consider that such class of Shares would be affected in the same way
by the proposals under consideration, but in any other case shall treat them as separate classes of Shares. |
| 10.3 | The rights conferred upon the holders of the Shares of any class issued with preferred or other
rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied
by the creation or issue of further Shares ranking pari passu therewith or Shares issued with preferred or other rights. |
| 11 | Commission on Sale of Shares |
The Company may, in so far as
the Statute permits, pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely
or conditionally) or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any Shares. Such
commissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on
any issue of Shares pay such brokerage as may be lawful.
| 12 | Non Recognition of Trusts |
The Company shall not be bound
by or compelled to recognise in any way (even when notified) any equitable, contingent, future or partial interest in any Share,
or (except only as is otherwise provided by the Articles or the Statute) any other rights in respect of any Share other than an
absolute right to the entirety thereof in the holder.
| 13.1 | The Company shall have a first and paramount lien on all Shares (whether fully paid-up or not)
registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with
the Company (whether presently payable or not) by such Member or his estate, either alone or jointly with any other person, whether
a Member or not, but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this
Article. The registration of a transfer of any such Share shall operate as a waiver of the Company's lien thereon. The Company's
lien on a Share shall also extend to any amount payable in respect of that Share. |
| 13.2 | The Company may sell, in such manner as the Directors think fit, any Shares on which the Company
has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within fourteen clear days after
notice has been received or deemed to have been received by the holder of the Shares, or to the person entitled to it in consequence
of the death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied with the Shares may
be sold. |
| 13.3 | To give effect to any such sale the Directors may authorise any person to execute an instrument
of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser or his nominee shall be
registered as the holder of the Shares comprised in any such transfer, and he shall not be bound to see to the application of the
purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of
the Company's power of sale under the Articles. |
| 13.4 | The net proceeds of such sale after payment of costs, shall be applied in payment of such part
of the amount in respect of which the lien exists as is presently payable and any balance shall (subject to a like lien for sums
not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the
sale. |
| 14.1 | Subject to the terms of the allotment and issue of any Shares, the Directors may make calls upon
the Members in respect of any monies unpaid on their Shares (whether in respect of par value or premium), and each Member shall
(subject to receiving at least fourteen clear days' notice specifying the time or times of payment) pay to the Company at the time
or times so specified the amount called on the Shares. A call may be revoked or postponed, in whole or in part, as the Directors
may determine. A call may be required to be paid by instalments. A person upon whom a call is made shall remain liable for calls
made upon him notwithstanding the subsequent transfer of the Shares in respect of which the call was made. |
| 14.2 | A call shall be deemed to have been made at the time when the resolution of the Directors authorising
such call was passed. |
| 14.3 | The joint holders of a Share shall be jointly and severally liable to pay all calls in respect
thereof. |
| 14.4 | If a call remains unpaid after it has become due and payable, the person from whom it is due shall
pay interest on the amount unpaid from the day it became due and payable until it is paid at such rate as the Directors may determine
(and in addition all expenses that have been incurred by the Company by reason of such non-payment), but the Directors may waive
payment of the interest or expenses wholly or in part. |
| 14.5 | An amount payable in respect of a Share on issue or allotment or at any fixed date, whether on
account of the par value of the Share or premium or otherwise, shall be deemed to be a call and if it is not paid all the provisions
of the Articles shall apply as if that amount had become due and payable by virtue of a call. |
| 14.6 | The Directors may issue Shares with different terms as to the amount and times of payment of calls,
or the interest to be paid. |
| 14.7 | The Directors may, if they think fit, receive an amount from any Member willing to advance all
or any part of the monies uncalled and unpaid upon any Shares held by him, and may (until the amount would otherwise become payable)
pay interest at such rate as may be agreed upon between the Directors and the Member paying such amount in advance. |
| 14.8 | No such amount paid in advance of calls shall entitle the Member paying such amount to any portion
of a Dividend or other distribution payable in respect of any period prior to the date upon which such amount would, but for such
payment, become payable. |
| 15.1 | If a call or instalment of a call remains unpaid after it has become due and payable the Directors
may give to the person from whom it is due not less than fourteen clear days' notice requiring payment of the amount unpaid together
with any interest which may have accrued and any expenses incurred by the Company by reason of such non-payment. The notice shall
specify where payment is to be made and shall state that if the notice is not complied with the Shares in respect of which the
call was made will be liable to be forfeited. |
| 15.2 | If the notice is not complied with, any Share in respect of which it was given may, before the
payment required by the notice has been made, be forfeited by a resolution of the Directors. Such forfeiture shall include all
Dividends, other distributions or other monies payable in respect of the forfeited Share and not paid before the forfeiture. |
| 15.3 | A forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such manner
as the Directors think fit and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms
as the Directors think fit. Where for the purposes of its disposal a forfeited Share is to be transferred to any person the Directors
may authorise some person to execute an instrument of transfer of the Share in favour of that person. |
| 15.4 | A person any of whose Shares have been forfeited shall cease to be a Member in respect of them
and shall surrender to the Company for cancellation the certificate for the Shares forfeited and shall remain liable to pay to
the Company all monies which at the date of forfeiture were payable by him to the Company in respect of those Shares together with
interest at such rate as the Directors may determine, but his liability shall cease if and when the Company shall have received
payment in full of all monies due and payable by him in respect of those Shares. |
| 15.5 | A certificate in writing under the hand of one Director or Officer that a Share has been forfeited
on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the
Share. The certificate shall (subject to the execution of an instrument of transfer) constitute a good title to the Share and the
person to whom the Share is sold or otherwise disposed of shall not be bound to see to the application of the purchase money, if
any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture,
sale or disposal of the Share. |
| 15.6 | The provisions of the Articles as to forfeiture shall apply in the case of non payment of any sum
which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the par value of the Share or by
way of premium as if it had been payable by virtue of a call duly made and notified. |
| 16.1 | If a Member dies, the survivor or survivors (where he was a joint holder), or his legal personal
representatives (where he was a sole holder), shall be the only persons recognised by the Company as having any title to his Shares.
The estate of a deceased Member is not thereby released from any liability in respect of any Share, for which he was a joint or
sole holder. |
| 16.2 | Any person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation
or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may be required by
the Directors, elect, by a notice in writing sent by him to the Company, either to become the holder of such Share or to have some
person nominated by him registered as the holder of such Share. If he elects to have another person registered as the holder of
such Share he shall sign an instrument of transfer of that Share to that person. The Directors shall, in either case, have the
same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member
before his death or bankruptcy or liquidation or dissolution, as the case may be. |
| 16.3 | A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or dissolution
of a Member (or in any other case than by transfer) shall be entitled to the same Dividends, other distributions and other advantages
to which he would be entitled if he were the holder of such Share. However, he shall not, before becoming a Member in respect of
a Share, be entitled in respect of it to exercise any right conferred by membership in relation to general meetings of the Company
and the Directors may at any time give notice requiring any such person to elect either to be registered himself or to have some
person nominated by him be registered as the holder of the Share (but the Directors shall, in either case, have the same right
to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before
his death or bankruptcy or liquidation or dissolution or any other case than by transfer, as the case may be). If the notice is
not complied with within ninety days of being received or deemed to be received (as determined pursuant to the Articles), the Directors
may thereafter withhold payment of all Dividends, other distributions, bonuses or other monies payable in respect of the Share
until the requirements of the notice have been complied with. |
| 17 | Class B Ordinary Share Conversion |
| 17.1 | The rights attaching to the Class A Shares and Class B Shares shall rank pari passu
in all respects, and the Class A Shares and Class B Shares shall vote together as a single class on all matters (subject
to the Variation of Rights of Shares Article and the Appointment and Removal of Directors Article hereof) with the exception
that the holder of a Class B Share shall have the conversion rights referred to in this Article. |
| 17.2 | Class B Shares shall automatically convert into Class A Shares on a one-for-one basis
(the "Initial Conversion Ratio") automatically on the first business day following the closing of a Business Combination. |
| 17.3 | Notwithstanding the Initial Conversion Ratio, in the case that additional Class A Shares or
any other Equity-linked Securities, are issued, or deemed issued, by the Company in excess of the amounts offered in the IPO and
related to the closing of a Business Combination, all Class B Shares in issue shall automatically convert into Class A
Shares at the time of the closing of a Business Combination at a ratio for which the Class B Shares shall convert into Class A
Shares adjusted (unless the holders of a majority of the Class B Shares in issue agree to waive such anti-dilution adjustment
with respect to any such issuance or deemed issuance) so that the number of Class A Shares issuable upon conversion of all
Class B Shares will equal, on an as-converted basis, in the aggregate, 20 per cent of the sum of: (a) the total number
of Class A Shares and Class B Shares in issue upon completion of the IPO, plus (b) the total number of Class A
Shares issued or deemed issued or issuable upon conversion or exercise of any Equity-linked Securities or rights issued, or deemed
issued, by the Company in connection with or relation to a Business Combination, excluding any Class A Shares or Equity-linked
Securities exercisable for or convertible into Class A Shares issued, deemed issued, or to be issued, to any seller in a Business
Combination and any private placement Class A Shares issued to the Sponsor, Directors, Officers or their respective Affiliates
upon conversion of working capital loans made to the Company. |
| 17.4 | Notwithstanding anything to the contrary contained herein, the foregoing adjustment to the Initial
Conversion Ratio may be waived as to any particular issuance or deemed issuance of additional Class A Shares or Equity-linked
Securities by the written consent or agreement of holders of a majority of the Class B Shares then in issue consenting or
agreeing separately as a separate class in the manner provided in the Variation of Rights of Shares Article hereof. |
| 17.5 | The foregoing conversion ratio shall also be adjusted to account for any subdivision (by share
subdivision, exchange, capitalisation, rights issue, reclassification, recapitalisation or otherwise) or combination (by share
consolidation, exchange, reclassification, recapitalisation or otherwise) or similar reclassification or recapitalisation of the
Class A Shares in issue into a greater or lesser number of shares occurring after the original filing of the Articles without
a proportionate and corresponding subdivision, combination or similar reclassification or recapitalisation of the Class B
Shares in issue. |
| 17.6 | Each Class B Share shall convert into its pro rata number of Class A Shares pursuant
to this Article. The pro rata share for each holder of Class B Shares will be determined as follows: each Class B Share
shall convert into such number of Class A Shares as is equal to the product of 1 multiplied by a fraction, the numerator of
which shall be the total number of Class A Shares into which all of the Class B Shares in issue shall be converted pursuant
to this Article and the denominator of which shall be the total number of Class B Shares in issue at the time of conversion. |
| 17.7 | References in this Article to "converted", "conversion"
or "exchange" shall mean the compulsory redemption without notice of Class B Shares of any Member and, on
behalf of such Members, automatic application of such redemption proceeds in paying for such new Class A Shares into which
the Class B Shares have been converted or exchanged at a price per Class B Share necessary to give effect to a conversion
or exchange calculated on the basis that the Class A Shares to be issued as part of the conversion or exchange will be issued
at par. The Class A Shares to be issued on an exchange or conversion shall be registered in the name of such Member or in
such name as the Member may direct. |
| 17.8 | Notwithstanding anything to the contrary in this Article, in no event may any Class B Share
convert into Class A Shares at a ratio that is less than one-for-one. |
| 18 | Amendments of Memorandum and Articles of Association and Alteration of Capital |
| 18.1 | The Company may by Ordinary Resolution: |
| (a) | increase its share capital by such sum as the Ordinary Resolution shall prescribe and with such
rights, priorities and privileges annexed thereto, as the Company in general meeting may determine; |
| (b) | consolidate and divide all or any of its share capital into Shares of larger amount than its existing
Shares; |
| (c) | convert all or any of its paid-up Shares into stock, and reconvert that stock into paid-up Shares
of any denomination; |
| (d) | by subdivision of its existing Shares or any of them divide the whole or any part of its share
capital into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value; and |
| (e) | cancel any Shares that at the date of the passing of the Ordinary Resolution have not been taken
or agreed to be taken by any person and diminish the amount of its share capital by the amount of the Shares so cancelled. |
| 18.2 | All new Shares created in accordance with the provisions of the preceding Article shall be
subject to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture
and otherwise as the Shares in the original share capital. |
| 18.3 | Subject to the provisions of the Statute, the provisions of the Articles as regards the matters
to be dealt with by Ordinary Resolution and Article 29.4, the Company may by Special Resolution: |
| (b) | alter or add to the Articles; |
| (c) | alter or add to the Memorandum with respect to any objects, powers or other matters specified therein;
and |
| (d) | reduce its share capital or any capital redemption reserve fund. |
| 19 | Offices and Places of Business |
Subject to the provisions of
the Statute, the Company may by resolution of the Directors change the location of its Registered Office. The Company may, in addition
to its Registered Office, maintain such other offices or places of business as the Directors determine.
| 20.1 | All general meetings other than annual general meetings shall be called extraordinary general meetings. |
| 20.2 | The Company may, but shall not (unless required by the Statute) be obliged to, in each year hold
a general meeting as its annual general meeting, and shall specify the meeting as such in the notices calling it. Any annual general
meeting shall be held at such time and place as the Directors shall appoint. At these meetings the report of the Directors (if
any) shall be presented. |
| 20.3 | The Directors, the chief executive officer or the chairman of the board of Directors may call general
meetings, and, for the avoidance of doubt, Members shall not have the ability to call general meetings. |
| 20.4 | Members seeking to bring business before the annual general meeting or to nominate candidates for
appointment as Directors at the annual general meeting must deliver notice to the principal executive offices of the Company not
less than 120 calendar days before the date of the Company’s proxy statement released to Members in connection with the previous
year’s annual general meeting or, if the Company did not hold an annual general meeting the previous year, or if the date
of the current year's annual general meeting has been changed by more than 30 days from the date of the previous year’s annual
general meeting, then the deadline shall be set by the board of Directors with such deadline being a reasonable time before the
Company begins to print and send its related proxy materials. |
| 21 | Notice of General Meetings |
| 21.1 | At least five clear days' notice shall be given of any general meeting. Every notice shall specify
the place, the day and the hour of the meeting and the general nature of the business to be conducted at the general meeting and
shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided
that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether
or not the provisions of the Articles regarding general meetings have been complied with, be deemed to have been duly convened
if it is so agreed: |
| (a) | in the case of an annual general meeting, by all of the Members entitled to attend and vote thereat;
and |
| (b) | in the case of an extraordinary general meeting, by a majority in number of the Members having
a right to attend and vote at the meeting, together holding not less than ninety-five per cent in par value of the Shares giving
that right. |
| 21.2 | The accidental omission to give notice of a general meeting to, or the non receipt of notice of
a general meeting by, any person entitled to receive such notice shall not invalidate the proceedings of that general meeting. |
| 22 | Proceedings at General Meetings |
| 22.1 | No business shall be transacted at any general meeting unless a quorum is present. The holders
of a majority of the Shares being individuals present in person or by proxy or if a corporation or other non-natural person by
its duly authorised representative or proxy shall be a quorum. |
| 22.2 | A person may participate at a general meeting by conference telephone or other communications equipment
by means of which all the persons participating in the meeting can communicate with each other. Participation by a person in a
general meeting in this manner is treated as presence in person at that meeting. |
| 22.3 | A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by
or on behalf of all of the Members for the time being entitled to receive notice of and to attend and vote at general meetings
(or, being corporations or other non-natural persons, signed by their duly authorised representatives) shall be as valid and effective
as if the resolution had been passed at a general meeting of the Company duly convened and held. |
| 22.4 | If a quorum is not present within half an hour from the time appointed for the meeting to commence,
the meeting shall stand adjourned to the same day in the next week at the same time and/or place or to such other day, time and/or
place as the Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time
appointed for the meeting to commence, the Members present shall be a quorum. |
| 22.5 | The Directors may, at any time prior to the time appointed for the meeting to commence, appoint
any person to act as chairman of a general meeting of the Company or, if the Directors do not make any such appointment, the chairman,
if any, of the board of Directors shall preside as chairman at such general meeting. If there is no such chairman, or if he shall
not be present within fifteen minutes after the time appointed for the meeting to commence, or is unwilling to act, the Directors
present shall elect one of their number to be chairman of the meeting. |
| 22.6 | If no Director is willing to act as chairman or if no Director is present within fifteen minutes
after the time appointed for the meeting to commence, the Members present shall choose one of their number to be chairman of the
meeting. |
| 22.7 | The chairman may, with the consent of a meeting at which a quorum is present (and shall if so directed
by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned
meeting other than the business left unfinished at the meeting from which the adjournment took place. |
| 22.8 | When a general meeting is adjourned for thirty days or more, notice of the adjourned meeting shall
be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of an adjourned meeting. |
| 22.9 | If, prior to a Business Combination, a notice is issued in respect of a general meeting and the
Directors, in their absolute discretion, consider that it is impractical or undesirable for any reason to hold that general meeting
at the place, the day and the hour specified in the notice calling such general meeting, the Directors may postpone the general
meeting to another place, day and/or hour provided that notice of the place, the day and the hour of the rearranged general meeting
is promptly given to all Members. No business shall be transacted at any postponed meeting other than the business specified in
the notice of the original meeting. |
| 22.10 | When a general meeting is postponed for thirty days or more, notice of the postponed meeting shall
be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of a postponed meeting. All
proxy forms submitted for the original general meeting shall remain valid for the postponed meeting. The Directors may postpone
a general meeting which has already been postponed. |
| 22.11 | A resolution put to the vote of the meeting shall be decided on a poll. |
| 22.12 | A poll shall be taken as the chairman directs, and the result of the poll shall be deemed to be
the resolution of the general meeting at which the poll was demanded. |
| 22.13 | A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith.
A poll demanded on any other question shall be taken at such date, time and place as the chairman of the general meeting directs,
and any business other than that upon which a poll has been demanded or is contingent thereon may proceed pending the taking of
the poll. |
| 22.14 | In the case of an equality of votes the chairman shall be entitled to a second or casting vote. |
| 23.1 | Subject to any rights or restrictions attached to any Shares, including as set out at Article 29.4,
every Member present in any such manner shall have one vote for every Share of which he is the holder. |
| 23.2 | In the case of joint holders the vote of the senior holder who tenders a vote, whether in person
or by proxy (or, in the case of a corporation or other non-natural person, by its duly authorised representative or proxy), shall
be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the
names of the holders stand in the Register of Members. |
| 23.3 | A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction
in lunacy, may vote by his committee, receiver, curator bonis, or other person on such Member's behalf appointed by that court,
and any such committee, receiver, curator bonis or other person may vote by proxy. |
| 23.4 | No person shall be entitled to vote at any general meeting unless he is registered as a Member
on the record date for such meeting nor unless all calls or other monies then payable by him in respect of Shares have been paid. |
| 23.5 | No objection shall be raised as to the qualification of any voter except at the general meeting
or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall
be valid. Any objection made in due time in accordance with this Article shall be referred to the chairman whose decision
shall be final and conclusive. |
| 23.6 | Votes may be cast either personally or by proxy (or in the case of a corporation or other non-natural
person by its duly authorised representative or proxy). A Member may appoint more than one proxy or the same proxy under one or
more instruments to attend and vote at a meeting. Where a Member appoints more than one proxy the instrument of proxy shall specify
the number of Shares in respect of which each proxy is entitled to exercise the related votes. |
| 23.7 | A Member holding more than one Share need not cast the votes in respect of his Shares in the same
way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution and/or abstain
from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing him, a proxy appointed
under one or more instruments may vote a Share or some or all of the Shares in respect of which he is appointed either for or against
a resolution and/or abstain from voting a Share or some or all of the Shares in respect of which he is appointed. |
| 24.1 | The instrument appointing a proxy shall be in writing and shall be executed under the hand of the
appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation or other non natural person, under
the hand of its duly authorised representative. A proxy need not be a Member. |
| 24.2 | The Directors may, in the notice convening any meeting or adjourned meeting, or in an instrument
of proxy sent out by the Company, specify the manner by which the instrument appointing a proxy shall be deposited and the place
and the time (being not later than the time appointed for the commencement of the meeting or adjourned meeting to which the proxy
relates) at which the instrument appointing a proxy shall be deposited. In the absence of any such direction from the Directors
in the notice convening any meeting or adjourned meeting or in an instrument of proxy sent out by the Company, the instrument appointing
a proxy shall be deposited physically at the Registered Office not less than 48 hours before the time appointed for the meeting
or adjourned meeting to commence at which the person named in the instrument proposes to vote. |
| 24.3 | The chairman may in any event at his discretion declare that an instrument of proxy shall be deemed
to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted, or which has not been declared
to have been duly deposited by the chairman, shall be invalid. |
| 24.4 | The instrument appointing a proxy may be in any usual or common form (or such other form as the
Directors may approve) and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked.
An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll. |
| 24.5 | Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding
the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed,
or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation
or transfer was received by the Company at the Registered Office before the commencement of the general meeting, or adjourned meeting
at which it is sought to use the proxy. |
| 25.1 | Any corporation or other non-natural person which is a Member may in accordance with its constitutional
documents, or in the absence of such provision by resolution of its directors or other governing body, authorise such person as
it thinks fit to act as its representative at any meeting of the Company or of any class of Members, and the person so authorised
shall be entitled to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise
if it were an individual Member. |
| 25.2 | If a Clearing House (or its nominee(s)), being a corporation, is a Member, it may authorise such
persons as it sees fit to act as its representative at any meeting of the Company or at any meeting of any class of Members provided
that the authorisation shall specify the number and class of Shares in respect of which each such representative is so authorised.
Each person so authorised under the provisions of this Article shall be deemed to have been duly authorised without further
evidence of the facts and be entitled to exercise the same rights and powers on behalf of the Clearing House (or its nominee(s))
as if such person was the registered holder of such Shares held by the Clearing House (or its nominee(s)). |
| 26 | Shares that May Not be Voted |
| | Shares in the Company that are beneficially owned by the Company shall not be voted, directly
or indirectly, at any meeting and shall not be counted in determining the total number of outstanding Shares at any given
time. |
| 27.1 | There shall be a board of Directors consisting of not less than one person provided however that
the Company may by Ordinary Resolution increase or reduce the limits in the number of Directors. |
| 27.2 | The Directors shall be divided into three classes: Class I, Class II and Class III.
The number of Directors in each class shall be as nearly equal as possible. Upon the adoption of the Articles, the existing Directors
shall by resolution classify themselves as Class I, Class II or Class III Directors. The Class I Directors
shall stand appointed for a term expiring at the Company’s first annual general meeting, the Class II Directors shall
stand appointed for a term expiring at the Company’s second annual general meeting and the Class III Directors shall
stand appointed for a term expiring at the Company’s third annual general meeting. Commencing at the Company’s first
annual general meeting, and at each annual general meeting thereafter, Directors appointed to succeed those Directors whose terms
expire shall be appointed for a term of office to expire at the third succeeding annual general meeting after their appointment.
Except as the Statute or other Applicable Law may otherwise require, in the interim between annual general meetings or extraordinary
general meetings called for the appointment of Directors and/or the removal of one or more Directors and the filling of any vacancy
in that connection, additional Directors and any vacancies in the board of Directors, including unfilled vacancies resulting from
the removal of Directors for cause, may be filled by the vote of a majority of the remaining Directors then in office, although
less than a quorum (as defined in the Articles), or by the sole remaining Director. All Directors shall hold office until the expiration
of their respective terms of office and until their successors shall have been appointed and qualified. A Director appointed to
fill a vacancy resulting from the death, resignation or removal of a Director shall serve for the remainder of the full term of
the Director whose death, resignation or removal shall have created such vacancy and until his successor shall have been appointed
and qualified. |
| 28.1 | Subject to the provisions of the Statute, the Memorandum and the Articles and to any directions
given by Special Resolution, the business of the Company shall be managed by the Directors who may exercise all the powers of the
Company. No alteration of the Memorandum or Articles and no such direction shall invalidate any prior act of the Directors which
would have been valid if that alteration had not been made or that direction had not been given. A duly convened meeting of Directors
at which a quorum is present may exercise all powers exercisable by the Directors. |
| 28.2 | All cheques, promissory notes, drafts, bills of exchange and other negotiable or transferable instruments
and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may
be in such manner as the Directors shall determine by resolution. |
| 28.3 | The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement
to any Director who has held any other salaried office or place of profit with the Company or to his widow or dependants and may
make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance. |
| 28.4 | The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge
its undertaking, property and assets (present and future) and uncalled capital or any part thereof and to issue debentures, debenture
stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of the
Company or of any third party. |
| 29 | Appointment and Removal of Directors |
| 29.1 | Prior to the closing of a Business Combination, the Company may by Ordinary Resolution of the holders
of the Class B Shares appoint any person to be a Director or may by Ordinary Resolution of the holders of the Class B
Shares remove any Director. For the avoidance of doubt, prior to the closing of a Business Combination, holders of Class A
Shares shall have no right to vote on the appointment or removal of any Director. |
| 29.2 | The Directors may appoint any person to be a Director, either to fill a vacancy or as an additional
Director provided that the appointment does not cause the number of Directors to exceed any number fixed by or in accordance with
the Articles as the maximum number of Directors. |
| 29.3 | After the closing of a Business Combination, the Company may by Ordinary Resolution appoint any
person to be a Director or may by Ordinary Resolution remove any Director. |
| 29.4 | Prior to the closing of a Business Combination, Article 29.1 may only be amended by a Special
Resolution passed by at least two-thirds of such Members (which shall include a simple majority of the holders of Class B
Shares) as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting of which notice
specifying the intention to propose the resolution as a special resolution has been given, or by way of unanimous written resolution. |
| 30 | Vacation of Office of Director |
The office of a Director shall
be vacated if:
| (a) | the Director gives notice in writing to the Company that he resigns the office of Director; or |
| (b) | the Director absents himself (for the avoidance of doubt, without being represented by proxy) from
three consecutive meetings of the board of Directors without special leave of absence from the Directors, and the Directors pass
a resolution that he has by reason of such absence vacated office; or |
| (c) | the Director dies, becomes bankrupt or makes any arrangement or composition with his creditors
generally; or |
| (d) | the Director is found to be or becomes of unsound mind; or |
| (e) | all of the other Directors (being not less than two in number) determine that he should be removed
as a Director, either by a resolution passed by all of the other Directors at a meeting of the Directors duly convened and held
in accordance with the Articles or by a resolution in writing signed by all of the other Directors. |
| 31 | Proceedings of Directors |
| 31.1 | The quorum for the transaction of the business of the Directors may be fixed by the Directors,
and unless so fixed shall be a majority of the Directors then in office. |
| 31.2 | Subject to the provisions of the Articles, the Directors may regulate their proceedings as they
think fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman
shall have a second or casting vote. |
| 31.3 | A person may participate in a meeting of the Directors or any committee of Directors by conference
telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with
each other at the same time. Participation by a person in a meeting in this manner is treated as presence in person at that meeting.
Unless otherwise determined by the Directors, the meeting shall be deemed to be held at the place where the chairman is located
at the start of the meeting. |
| 31.4 | A resolution in writing (in one or more counterparts) signed by all the Directors or all the members
of a committee of the Directors or, in the case of a resolution in writing relating to the removal of any Director or the vacation
of office by any Director, all of the Directors other than the Director who is the subject of such resolution shall be as valid
and effectual as if it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly convened
and held. |
| 31.5 | A Director may, or other Officer on the direction of a Director shall, call a meeting of the Directors
by at least two days' notice in writing to every Director which notice shall set forth the general nature of the business to be
considered unless notice is waived by all the Directors either at, before or after the meeting is held. To any such notice of a
meeting of the Directors all the provisions of the Articles relating to the giving of notices by the Company to the Members shall
apply mutatis mutandis. |
| 31.6 | The continuing Directors (or a sole continuing Director, as the case may be) may act notwithstanding
any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to the Articles
as the necessary quorum of Directors the continuing Directors or Director may act for the purpose of increasing the number of Directors
to be equal to such fixed number, or of summoning a general meeting of the Company, but for no other purpose. |
| 31.7 | The Directors may elect a chairman of their board and determine the period for which he is to hold
office; but if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time
appointed for the meeting to commence, the Directors present may choose one of their number to be chairman of the meeting. |
| 31.8 | All acts done by any meeting of the Directors or of a committee of the Directors shall, notwithstanding
that it is afterwards discovered that there was some defect in the appointment of any Director, and/or that they or any of them
were disqualified, and/or had vacated their office and/or were not entitled to vote, be as valid as if every such person had been
duly appointed and/or not disqualified to be a Director and/or had not vacated their office and/or had been entitled to vote, as
the case may be. |
| 31.9 | A Director may be represented at any meetings of the board of Directors by a proxy appointed in
writing by him. The proxy shall count towards the quorum and the vote of the proxy shall for all purposes be deemed to be that
of the appointing Director. |
| | A Director who is present at a meeting of the board of Directors at which action on any
Company matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the
minutes of the meeting or unless he shall file his written dissent from such action with the person acting as the chairman or
secretary of the meeting before the adjournment thereof or shall forward such dissent by registered post to such person
immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favour of
such action. |
| 33.1 | A Director may hold any other office or place of profit under the Company (other than the office
of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the
Directors may determine. |
| 33.2 | A Director may act by himself or by, through or on behalf of his firm in a professional capacity
for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director. |
| 33.3 | A Director may be or become a director or other officer of or otherwise interested in any company
promoted by the Company or in which the Company may be interested as a shareholder, a contracting party or otherwise, and no such
Director shall be accountable to the Company for any remuneration or other benefits received by him as a director or officer of,
or from his interest in, such other company. |
| 33.4 | No person shall be disqualified from the office of Director or prevented by such office from contracting
with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered
into by or on behalf of the Company in which any Director shall be in any way interested be or be liable to be avoided, nor shall
any Director so contracting or being so interested be liable to account to the Company for any profit realised by or arising in
connection with any such contract or transaction by reason of such Director holding office or of the fiduciary relationship thereby
established. A Director shall be at liberty to vote in respect of any contract or transaction in which he is interested provided
that the nature of the interest of any Director in any such contract or transaction shall be disclosed by him at or prior to its
consideration and any vote thereon. |
| 33.5 | A general notice that a Director is a shareholder, director, officer or employee of any specified
firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure
for the purposes of voting on a resolution in respect of a contract or transaction in which he has an interest, and after such
general notice it shall not be necessary to give special notice relating to any particular transaction. |
| | The Directors shall cause minutes to be made in books kept for the purpose of recording all
appointments of Officers made by the Directors, all proceedings at meetings of the Company or the holders of any class of
Shares and of the Directors, and of committees of the Directors, including the names of the Directors present at each
meeting. |
| 35 | Delegation of Directors' Powers |
| 35.1 | The Directors may delegate any of their powers, authorities and discretions, including the power
to sub-delegate, to any committee consisting of one or more Directors (including, without limitation, the Audit Committee, the
Compensation Committee and the Nominating and Corporate Governance Committee). Any such delegation may be made subject to any conditions
the Directors may impose and either collaterally with or to the exclusion of their own powers and any such delegation may be revoked
or altered by the Directors. Subject to any such conditions, the proceedings of a committee of Directors shall be governed by the
Articles regulating the proceedings of Directors, so far as they are capable of applying. |
| 35.2 | The Directors may establish any committees, local boards or agencies or appoint any person to be
a manager or agent for managing the affairs of the Company and may appoint any person to be a member of such committees, local
boards or agencies. Any such appointment may be made subject to any conditions the Directors may impose, and either collaterally
with or to the exclusion of their own powers and any such appointment may be revoked or altered by the Directors. Subject to any
such conditions, the proceedings of any such committee, local board or agency shall be governed by the Articles regulating the
proceedings of Directors, so far as they are capable of applying. |
| 35.3 | The Directors may adopt formal written charters for committees and, if so adopted, shall review
and assess the adequacy of such formal written charters on an annual basis. Each of these committees shall be empowered to do all
things necessary to exercise the rights of such committee set forth in the Articles and shall have such powers as the Directors
may delegate pursuant to the Articles and as required by the rules and regulations of the Designated Stock Exchange, the Securities
and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. Each of the Audit Committee,
the Compensation Committee and the Nominating and Corporate Governance Committee, if established, shall consist of such number
of Directors as the Directors shall from time to time determine (or such minimum number as may be required from time to time by
the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent
regulatory authority or otherwise under Applicable Law). For so long as any class of Shares is listed on the Designated Stock Exchange,
the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee shall be made up of such
number of Independent Directors as is required from time to time by the rules and regulations of the Designated Stock Exchange,
the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. |
| 35.4 | The Directors may by power of attorney or otherwise appoint any person to be the agent of the Company
on such conditions as the Directors may determine, provided that the delegation is not to the exclusion of their own powers and
may be revoked by the Directors at any time. |
| 35.5 | The Directors may by power of attorney or otherwise appoint any company, firm, person or body of
persons, whether nominated directly or indirectly by the Directors, to be the attorney or authorised signatory of the Company for
such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under
the Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other
appointment may contain such provisions for the protection and convenience of persons dealing with any such attorneys or authorised
signatories as the Directors may think fit and may also authorise any such attorney or authorised signatory to delegate all or
any of the powers, authorities and discretions vested in him. |
| 35.6 | The Directors may appoint such Officers as they consider necessary on such terms, at such remuneration
and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors may think fit. Unless
otherwise specified in the terms of his appointment an Officer may be removed by resolution of the Directors or Members. An Officer
may vacate his office at any time if he gives notice in writing to the Company that he resigns his office. |
| 36 | No Minimum Shareholding |
| | The Company in general meeting may fix a minimum shareholding required to be held by a
Director, but unless and until such a shareholding qualification is fixed a Director is not required to hold Shares. |
| 37 | Remuneration of Directors |
| 37.1 | The remuneration to be paid to the Directors, if any, shall be such remuneration as the Directors
shall determine, provided that no cash remuneration shall be paid to any Director by the Company prior to the consummation of a
Business Combination. The Directors shall also, whether prior to or after the consummation of a Business Combination, be entitled
to be paid all travelling, hotel and other expenses properly incurred by them in connection with their attendance at meetings of
Directors or committees of Directors, or general meetings of the Company, or separate meetings of the holders of any class of Shares
or debentures of the Company, or otherwise in connection with the business of the Company or the discharge of their duties as a
Director, or to receive a fixed allowance in respect thereof as may be determined by the Directors, or a combination partly of
one such method and partly the other. |
| 37.2 | The Directors may by resolution approve additional remuneration to any Director for any services
which in the opinion of the Directors go beyond his ordinary routine work as a Director. Any fees paid to a Director who is also
counsel, attorney or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his remuneration
as a Director. |
| 38.1 | The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the
authority of the Directors or of a committee of the Directors authorised by the Directors. Every instrument to which the Seal has
been affixed shall be signed by at least one person who shall be either a Director or some Officer or other person appointed by
the Directors for the purpose. |
| 38.2 | The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal
or Seals each of which shall be a facsimile of the common Seal of the Company and, if the Directors so determine, with the addition
on its face of the name of every place where it is to be used. |
| 38.3 | A Director or Officer, representative or attorney of the Company may without further authority
of the Directors affix the Seal over his signature alone to any document of the Company required to be authenticated by him under
seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever. |
| 39 | Dividends, Distributions and Reserve |
| 39.1 | Subject to the Statute and this Article and except as otherwise provided by the rights attached
to any Shares, the Directors may resolve to pay Dividends and other distributions on Shares in issue and authorise payment of the
Dividends or other distributions out of the funds of the Company lawfully available therefor. A Dividend shall be deemed to be
an interim Dividend unless the terms of the resolution pursuant to which the Directors resolve to pay such Dividend specifically
state that such Dividend shall be a final Dividend. No Dividend or other distribution shall be paid except out of the realised
or unrealised profits of the Company, out of the share premium account or as otherwise permitted by law. |
| 39.2 | Except as otherwise provided by the rights attached to any Shares, all Dividends and other distributions
shall be paid according to the par value of the Shares that a Member holds. If any Share is issued on terms providing that it shall
rank for Dividend as from a particular date, that Share shall rank for Dividend accordingly. |
| 39.3 | The Directors may deduct from any Dividend or other distribution payable to any Member all sums
of money (if any) then payable by him to the Company on account of calls or otherwise. |
| 39.4 | The Directors may resolve that any Dividend or other distribution be paid wholly or partly by the
distribution of specific assets and in particular (but without limitation) by the distribution of shares, debentures, or securities
of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors
may settle the same as they think expedient and in particular may issue fractional Shares and may fix the value for distribution
of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the basis of
the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees in such manner
as may seem expedient to the Directors. |
| 39.5 | Except as otherwise provided by the rights attached to any Shares, Dividends and other distributions
may be paid in any currency. The Directors may determine the basis of conversion for any currency conversions that may be required
and how any costs involved are to be met. |
| 39.6 | The Directors may, before resolving to pay any Dividend or other distribution, set aside such sums
as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose of
the Company and pending such application may, at the discretion of the Directors, be employed in the business of the Company. |
| 39.7 | Any Dividend, other distribution, interest or other monies payable in cash in respect of Shares
may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of
the holder or, in the case of joint holders, to the registered address of the holder who is first named on the Register of Members
or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall
be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts
for any Dividends, other distributions, bonuses, or other monies payable in respect of the Share held by them as joint holders. |
| 39.8 | No Dividend or other distribution shall bear interest against the Company. |
| 39.9 | Any Dividend or other distribution which cannot be paid to a Member and/or which remains unclaimed
after six months from the date on which such Dividend or other distribution becomes payable may, in the discretion of the Directors,
be paid into a separate account in the Company's name, provided that the Company shall not be constituted as a trustee in respect
of that account and the Dividend or other distribution shall remain as a debt due to the Member. Any Dividend or other distribution
which remains unclaimed after a period of six years from the date on which such Dividend or other distribution becomes payable
shall be forfeited and shall revert to the Company. |
| | The Directors may at any time capitalise any sum standing to the credit of any of the
Company's reserve accounts or funds (including the share premium account and capital redemption reserve fund) or any sum
standing to the credit of the profit and loss account or otherwise available for distribution; appropriate such sum to
Members in the proportions in which such sum would have been divisible amongst such Members had the same been a distribution
of profits by way of Dividend or other distribution; and apply such sum on their behalf in paying up in full unissued Shares
for allotment and distribution credited as fully paid-up to and amongst them in the proportion aforesaid. In such event the
Directors shall do all acts and things required to give effect to such capitalisation, with full power given to the Directors
to make such provisions as they think fit in the case of Shares becoming distributable in fractions (including provisions
whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors may
authorise any person to enter on behalf of all of the Members interested into an agreement with the Company providing for
such capitalisation and matters incidental or relating thereto and any agreement made under such authority shall be effective
and binding on all such Members and the Company. |
| 41.1 | The Directors shall cause proper books of account (including, where applicable, material underlying
documentation including contracts and invoices) to be kept with respect to all sums of money received and expended by the Company
and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and
the assets and liabilities of the Company. Such books of account must be retained for a minimum period of five years from the date
on which they are prepared. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary
to give a true and fair view of the state of the Company's affairs and to explain its transactions. |
| 41.2 | The Directors shall determine whether and to what extent and at what times and places and under
what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members
not being Directors and no Member (not being a Director) shall have any right of inspecting any account or book or document of
the Company except as conferred by Statute or authorised by the Directors or by the Company in general meeting. |
| 41.3 | The Directors may cause to be prepared and to be laid before the Company in general meeting profit
and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law. |
| 42.1 | The Directors may appoint an Auditor of the Company who shall hold office on such terms as the
Directors determine. |
| 42.2 | Without prejudice to the freedom of the Directors to establish any other committee, if the Shares
(or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, and if required by the rules and
regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority
or otherwise under Applicable Law, the Directors shall establish and maintain an Audit Committee as a committee of the Directors
and shall adopt a formal written Audit Committee charter and review and assess the adequacy of the formal written charter on an
annual basis. The composition and responsibilities of the Audit Committee shall comply with the rules and regulations of the
Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise
under Applicable Law. |
| 42.3 | If the Shares (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange,
the Company shall conduct an appropriate review of all related party transactions on an ongoing basis and shall utilise the Audit
Committee for the review and approval of potential conflicts of interest. |
| 42.4 | The remuneration of the Auditor shall be fixed by the Audit Committee (if one exists). |
| 42.5 | If the office of Auditor becomes vacant by resignation or death of the Auditor, or by his becoming
incapable of acting by reason of illness or other disability at a time when his services are required, the Directors shall fill
the vacancy and determine the remuneration of such Auditor. |
| 42.6 | Every Auditor of the Company shall have a right of access at all times to the books and accounts
and vouchers of the Company and shall be entitled to require from the Directors and Officers such information and explanation as
may be necessary for the performance of the duties of the Auditor. |
| 42.7 | Auditors shall, if so required by the Directors, make a report on the accounts of the Company during
their tenure of office at the next annual general meeting following their appointment in the case of a company which is registered
with the Registrar of Companies as an ordinary company, and at the next extraordinary general meeting following their appointment
in the case of a company which is registered with the Registrar of Companies as an exempted company, and at any other time during
their term of office, upon request of the Directors or any general meeting of the Members. |
| 42.8 | Any payment made to members of the Audit Committee (if one exists) shall require the review and
approval of the Directors, with any Director interested in such payment abstaining from such review and approval. |
| 42.9 | The Audit Committee shall monitor compliance with the terms of the IPO and, if any non-compliance
is identified, the Audit Committee shall be charged with the responsibility to take all action necessary to rectify such non-compliance
or otherwise cause compliance with the terms of the IPO. |
| 42.10 | At least one member of the Audit Committee shall be an "audit committee financial expert"
as determined by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or
any other competent regulatory authority or otherwise under Applicable Law. The "audit committee financial expert" shall
have such past employment experience in finance or accounting, requisite professional certification in accounting, or any other
comparable experience or background which results in the individual’s financial sophistication. |
| 43.1 | Notices shall be in writing and may be given by the Company to any Member either personally or
by sending it by courier, post, cable, telex, fax or e-mail to him or to his address as shown in the Register of Members (or where
the notice is given by e-mail by sending it to the e-mail address provided by such Member). Notice may also be served by Electronic
Communication in accordance with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission
and/or any other competent regulatory authority or by placing it on the Company’s Website. |
| 43.2 | Where a notice is sent by: |
| (a) | courier; service of the notice shall be deemed to be effected by delivery of the notice to a courier
company, and shall be deemed to have been received on the third day (not including Saturdays or Sundays or public holidays) following
the day on which the notice was delivered to the courier; |
| (b) | post; service of the notice shall be deemed to be effected by properly addressing, pre paying and
posting a letter containing the notice, and shall be deemed to have been received on the fifth day (not including Saturdays or
Sundays or public holidays in the Cayman Islands) following the day on which the notice was posted; |
| (c) | cable, telex or fax; service of the notice shall be deemed to be effected by properly addressing
and sending such notice and shall be deemed to have been received on the same day that it was transmitted; |
| (d) | e-mail or other Electronic Communication; service of the notice shall be deemed to be effected
by transmitting the e-mail to the e-mail address provided by the intended recipient and shall be deemed to have been received on
the same day that it was sent, and it shall not be necessary for the receipt of the e-mail to be acknowledged by the recipient;
and |
| (e) | placing it on the Company’s Website; service of the notice shall be deemed to have been effected
one hour after the notice or document was placed on the Company’s Website. |
| 43.3 | A notice may be given by the Company to the person or persons which the Company has been advised
are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as other notices which
are required to be given under the Articles and shall be addressed to them by name, or by the title of representatives of the deceased,
or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so
entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death
or bankruptcy had not occurred. |
| 43.4 | Notice of every general meeting shall be given in any manner authorised by the Articles to every
holder of Shares carrying an entitlement to receive such notice on the record date for such meeting except that in the case of
joint holders the notice shall be sufficient if given to the joint holder first named in the Register of Members and every person
upon whom the ownership of a Share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of
a Member where the Member but for his death or bankruptcy would be entitled to receive notice of the meeting, and no other person
shall be entitled to receive notices of general meetings. |
| 44.1 | If the Company shall be wound up, the liquidator shall apply the assets of the Company in satisfaction
of creditors' claims in such manner and order as such liquidator thinks fit. Subject to the rights attaching to any Shares, in
a winding up: |
| (a) | if the assets available for distribution amongst the Members shall be insufficient to repay the
whole of the Company's issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be
borne by the Members in proportion to the par value of the Shares held by them; or |
| (b) | if the assets available for distribution amongst the Members shall be more than sufficient to repay
the whole of the Company's issued share capital at the commencement of the winding up, the surplus shall be distributed amongst
the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction
from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise. |
| 44.2 | If the Company shall be wound up the liquidator may, subject to the rights attaching to any Shares
and with the approval of a Special Resolution of the Company and any other approval required by the Statute, divide amongst the
Members in kind the whole or any part of the assets of the Company (whether such assets shall consist of property of the same kind
or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or
different classes of Members. The liquidator may, with the like approval, vest the whole or any part of such assets in trustees
upon such trusts for the benefit of the Members as the liquidator, with the like approval, shall think fit, but so that no Member
shall be compelled to accept any asset upon which there is a liability. |
| 45 | Indemnity and Insurance |
| 45.1 | Every Director and Officer (which for the avoidance of doubt, shall not include auditors of the
Company), together with every former Director and former Officer (each an "Indemnified Person") shall be indemnified
out of the assets of the Company against any liability, action, proceeding, claim, demand, costs, damages or expenses, including
legal expenses, whatsoever which they or any of them may incur as a result of any act or failure to act in carrying out their functions
other than such liability (if any) that they may incur by reason of their own actual fraud, wilful neglect or wilful default. No
Indemnified Person shall be liable to the Company for any loss or damage incurred by the Company as a result (whether direct or
indirect) of the carrying out of their functions unless that liability arises through the actual fraud, wilful neglect or wilful
default of such Indemnified Person. No person shall be found to have committed actual fraud, wilful neglect or wilful default under
this Article unless or until a court of competent jurisdiction shall have made a finding to that effect. |
| 45.2 | The Company shall advance to each Indemnified Person reasonable attorneys' fees and other costs
and expenses incurred in connection with the defence of any action, suit, proceeding or investigation involving such Indemnified
Person for which indemnity will or could be sought. In connection with any advance of any expenses hereunder, the Indemnified Person
shall execute an undertaking to repay the advanced amount to the Company if it shall be determined by final judgment or other final
adjudication that such Indemnified Person was not entitled to indemnification pursuant to this Article. If it shall be determined
by a final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification with respect to
such judgment, costs or expenses, then such party shall not be indemnified with respect to such judgment, costs or expenses and
any advancement shall be returned to the Company (without interest) by the Indemnified Person. |
| 45.3 | The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of
any Director or Officer against any liability which, by virtue of any rule of law, would otherwise attach to such person in
respect of any negligence, default, breach of duty or breach of trust of which such person may be guilty in relation to the Company. |
Unless the Directors otherwise
prescribe, the financial year of the Company shall end on 31st December in each year and, following the year of incorporation,
shall begin on 1st January in each year.
| 47 | Transfer by Way of Continuation |
If the Company is exempted as
defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution, have
the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands
and to be deregistered in the Cayman Islands.
| 48 | Mergers and Consolidations |
The Company shall have the power
to merge or consolidate with one or more other constituent companies (as defined in the Statute) upon such terms as the Directors
may determine and (to the extent required by the Statute) with the approval of a Special Resolution.
| 49.1 | Notwithstanding any other provision of the Articles, this Article shall apply during the period
commencing upon the adoption of the Articles and terminating upon the first to occur of the consummation of a Business Combination
and the full distribution of the Trust Account pursuant to this Article. In the event of a conflict between this Article and
any other Articles, the provisions of this Article shall prevail. |
| 49.2 | Prior to the consummation of a Business Combination, the Company shall either: |
| (a) | submit such Business Combination to its Members for approval; or |
| (b) | provide Members with the opportunity to have their Shares repurchased by means of a tender offer
for a per-Share repurchase price payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated
as of two business days prior to the consummation of such Business Combination, including interest earned on the funds held in
the Trust Account and not previously released to the Company to pay its income taxes, if any, divided by the number of then issued
Public Shares, provided that the Company shall not repurchase Public Shares in an amount that would cause the Company's net tangible
assets to be less than US$5,000,001 following such repurchases. |
| 49.3 | If the Company initiates any tender offer in accordance with Rule 13e-4 and Regulation 14E
of the Exchange Act in connection with a proposed Business Combination, it shall file tender offer documents with the Securities
and Exchange Commission prior to completing such Business Combination which contain substantially the same financial and other
information about such Business Combination and the redemption rights as is required under Regulation 14A of the Exchange Act.
If, alternatively, the Company holds a general meeting to approve a proposed Business Combination, the Company will conduct any
redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, and not pursuant to the tender
offer rules, and file proxy materials with the Securities and Exchange Commission. |
| 49.4 | At a general meeting called for the purposes of approving a Business Combination pursuant to this
Article, in the event that such Business Combination is approved by Ordinary Resolution, the Company shall be authorised to consummate
such Business Combination, provided that the Company shall not consummate such Business Combination unless the Company has net
tangible assets of at least US$5,000,001 immediately prior to, or upon such consummation of, or any greater net tangible asset
or cash requirement that may be contained in the agreement relating to, such Business Combination. |
| 49.5 | Any Member holding Public Shares who is not the Sponsor, a Founder, Officer or Director may, at
least two business days’ prior to any vote on a Business Combination, elect to have their Public Shares redeemed for cash,
in accordance with any applicable requirements provided for in the related proxy materials (the "IPO Redemption"),
provided that no such Member acting together with any Affiliate of his or any other person with whom he is acting in concert or
as a partnership, limited partnership, syndicate, or other group for the purposes of acquiring, holding, or disposing of Shares
may exercise this redemption right with respect to more than 15 per cent of the Public Shares in the aggregate without the prior
consent of the Company and provided further that any beneficial holder of Public Shares on whose behalf a redemption right is being
exercised must identify itself to the Company in connection with any redemption election in order to validly redeem such Public
Shares. If so demanded, the Company shall pay any such redeeming Member, regardless of whether he is voting for or against such
proposed Business Combination, a per-Share redemption price payable in cash, equal to the aggregate amount then on deposit in the
Trust Account calculated as of two business days prior to the consummation of the Business Combination, including interest earned
on the funds held in the Trust Account and not previously released to the Company to pay its taxes, if any, divided by the number
of then issued Public Shares (such redemption price being referred to herein as the "Redemption Price"), but only
in the event that the applicable proposed Business Combination is approved and consummated. The Company shall not redeem Public
Shares that would cause the Company’s net tangible assets to be less than US$5,000,001 following such redemptions (the "Redemption
Limitation"). |
| 49.6 | A Member may not withdraw a Redemption Notice once submitted to the Company unless the Directors
determine (in their sole discretion) to permit the withdrawal of such redemption request (which they may do in whole or in part). |
| 49.7 | In the event that the Company does not consummate a Business Combination within 24 months from
the consummation of the IPO, or such later time as the Members may approve in accordance with the Articles, the Company shall: |
| (a) | cease all operations except for the purpose of winding up; |
| (b) | as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public
Shares, at a per-Share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes, if any (less
up to US$100,000 of interest to pay dissolution expenses), divided by the number of then Public Shares in issue, which redemption
will completely extinguish public Members' rights as Members (including the right to receive further liquidation distributions,
if any); and |
| (c) | as promptly as reasonably possible following such redemption, subject to the approval of the Company's
remaining Members and the Directors, liquidate and dissolve, |
subject in each case to its obligations
under Cayman Islands law to provide for claims of creditors and other requirements of Applicable Law.
| 49.8 | In the event that any amendment is made to the Articles: |
| (a) | to modify the substance or timing of the Company's obligation to provide holders of Class A
Shares the right to have their shares redeemed in connection with a Business Combination or to redeem 100 per cent of the Public
Shares if the Company does not consummate a Business Combination within 24 months from the consummation of the IPO, or such later
time as the Members may approve in accordance with the Articles; or |
| (b) | with respect to any other provision relating to Members’ rights or pre-Business Combination
activity, |
each holder of Public Shares
who is not the Sponsor, a Founder, Officer or Director shall be provided with the opportunity to redeem their Public Shares upon
the approval or effectiveness of any such amendment at a per-Share price, payable in cash, equal to the aggregate amount then on
deposit in the Trust Account calculated as of two business days prior to the consummation of a Business Combination, including
interest earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes, if any, divided
by the number of then outstanding Public Shares. The Company’s ability to provide such redemption in this Article is
subject to the Redemption Limitation.
| 49.9 | A holder of Public Shares shall be entitled to receive distributions from the Trust Account only
in the event of an IPO Redemption, a repurchase of Shares by means of a tender offer pursuant to this Article, or a distribution
of the Trust Account pursuant to this Article. In no other circumstance shall a holder of Public Shares have any right or interest
of any kind in the Trust Account. |
| 49.10 | After the issue of Public Shares, and prior to the consummation of a Business Combination, the
Company shall not issue additional Shares or any other securities that would entitle the holders thereof to: |
| (a) | receive funds from the Trust Account; or |
| (b) | vote as a class with Public Shares on a Business Combination or on any other proposal presented
to shareholders prior to or in connection with the completion of an initial Business Combination or (b) to approve an amendment
to the Memorandum or to the Articles to (x) extent the time the Company has to consummate a Business Combination beyond 24
months from the closing of the IPO or (y) amend the foregoing provisions. |
| 49.11 | A Director may vote in respect of a Business Combination in which such Director has a conflict
of interest with respect to the evaluation of such Business Combination. Such Director must disclose such interest or conflict
to the other Directors. |
| 49.12 | As long as the securities of the Company are listed on the Nasdaq Capital Market, the Company must
complete one or more Business Combinations having an aggregate fair market value of at least 80 per cent of the assets held in
the Trust Account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned
on the Trust Account) at the time of the Company's signing a definitive agreement in connection with a Business Combination. A
Business Combination must not be effectuated with another blank cheque company or a similar company with nominal operations. |
| 49.13 | The Company may enter into a Business Combination with a target business that is Affiliated with
the Sponsor, a Founder, a Director or an Officer. In the event the Company seeks to consummate a Business Combination with a target
that is Affiliated with the Sponsor, a Founder, a Director or an Officer, the Company, or a committee of Independent Directors,
will obtain an opinion from an independent investment banking firm that is a member of the United States Financial Industry Regulatory
Authority or an independent valuation or accounting firm that such a Business Combination is fair to the Company from a financial
point of view. |
| 50.1 | To the fullest extent permitted by Applicable Law, no individual serving as a Director or an Officer
("Management") shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging
directly or indirectly in the same or similar business activities or lines of business as the Company. To the fullest extent permitted
by Applicable Law, the Company renounces any interest or expectancy of the Company in, or in being offered an opportunity to participate
in, any potential transaction or matter which may be a corporate opportunity for Management, on the one hand, and the Company,
on the other. Except to the extent expressly assumed by contract, to the fullest extent permitted by Applicable Law, Management
shall have no duty to communicate or offer any such corporate opportunity to the Company and shall not be liable to the Company
or its Members for breach of any fiduciary duty as a Member, Director and/or Officer solely by reason of the fact that such party
pursues or acquires such corporate opportunity for itself, himself or herself, directs such corporate opportunity to another person,
or does not communicate information regarding such corporate opportunity to the Company. |
| 50.2 | Except as provided elsewhere in this Article, the Company hereby renounces any interest or expectancy
of the Company in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate
opportunity for both the Company and Management, about which a Director and/or Officer who is also a member of Management acquires
knowledge. |
| 50.3 | To the extent a court might hold that the conduct of any activity related to a corporate opportunity
that is renounced in this Article to be a breach of duty to the Company or its Members, the Company hereby waives, to the
fullest extent permitted by Applicable Law, any and all claims and causes of action that the Company may have for such activities.
To the fullest extent permitted by Applicable Law, the provisions of this Article apply equally to activities conducted in
the future and that have been conducted in the past. |
Exhibit 5.1
|
|
601 Lexington Avenue
New York, NY 10022
United States
+1 212 446 4800 |
Facsimile:
+1 212 446 4900 |
www.kirkland.com
January 19, 2021
HealthCor Catalio Acquisition Corp.
55 Hudson Yards, 28th Floor
New York, New York 10001
Re: HealthCor
Catalio Acquisition Corp. Registration Statement on Form S-1
Ladies and Gentlemen:
We are issuing
this opinion in our capacity as special United States counsel to HealthCor Catalio Acquisition Corp., a Cayman Island
exempted company (the “Company”), in connection with the registration under the Securities Act of
1933, as amended (the “Act”), on a Registration Statement on Form S-1 (333-252002) originally
filed with the Securities and Exchange Commission (the “Commission”) on January 11, 2021 (the
“Registration Statement”) of 17,250,000 Class A ordinary shares, par value $0.0001 per share of the
Company (the “Shares”), including the underwriter’s over-allotment option to purchase an
additional 2,250,000 Shares.
This opinion is being
furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K promulgated under the Act.
In rendering the opinions
stated herein, we have examined and relied upon the form of Underwriting Agreement (the “Underwriting Agreement”)
proposed to be entered into by and between the Company and Jefferies LLC, as sole underwriter (the “Underwriter”),
relating to the sale by the Company to the Underwriter of the Shares, filed as Exhibit 1.1 to the Registration Statement;
Beijing Boston
Chicago Dallas Hong Kong Houston London Los Angeles
Munich Palo Alto Paris San Francisco Shanghai Washington, D.C.
Page 2
For purposes of this
letter, we have examined such other documents, records, certificates, resolutions and other instruments deemed necessary as a basis
for this opinion, and we have assumed the authenticity of all documents submitted to us as originals, the conformity to the originals
of all documents submitted to us as copies and the authenticity of the originals of all documents submitted to us as copies. As
to any facts material to the opinions expressed herein which we have not independently established or verified, we have relied
upon statements and representations of officers and other representatives of the Company and others.
We do not express any
opinion with respect to the laws of any jurisdiction other than the laws of the State of New York.
Based upon the foregoing
and subject to the qualifications and assumptions stated herein, we are of the opinion that:
1. When
the Shares are delivered in accordance with the Underwriting Agreement upon payment of the agreed upon consideration therefor,
the Shares will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their
terms under the laws of the State of New York.
In addition, in rendering
the foregoing opinions we have assumed that:
(a) the
Company (i) is duly incorporated and is validly existing and in good standing, (ii) has the requisite legal status and
legal capacity under the laws of the jurisdiction of its organization and (iii) has complied and will comply with all aspects
of the laws of the jurisdiction of its organization in connection with the transactions contemplated by;
(b) the
Company has the corporate power and authority to execute, deliver and perform all its obligations under the Shares; and
Page 3
(c) the
performance by the Company of its obligations thereunder, including the issuance and sale of the Shares, does not and will not:
(i) conflict with the Amended and Restated Memorandum and Articles of Association of the Company, (ii) constitute a violation
of, or a default under, any lease, indenture, instrument or other agreement to which the Company or its property is subject, (iii) contravene
any order or decree of any governmental authority to which the Company or its property is subject or (iv) violate any law,
rule or regulation to which the Company or its property is subject (except that we do not make the assumption set forth in
this clause (iv) with respect to the laws of the State of New York);
Our opinions expressed
above are subject to the qualifications that we express no opinion as to the applicability of, compliance with, or effect of (i) any
bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent conveyance, moratorium or other similar law or judicially
developed doctrine in this area (such as substantive consolidation or equitable subordination) affecting the enforcement of creditors’
rights generally, (ii) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity
or at law), (iii) an implied covenant of good faith and fair dealing, (iv) public policy considerations which may limit
the rights of parties to obtain certain remedies, (v) any requirement that a claim with respect to any security denominated
in other than U.S. dollars (or a judgment denominated in other than U.S. dollars in respect of such claim) be converted into U.S.
dollars at a rate of exchange prevailing on a date determined in accordance with applicable law, (vi) governmental authority
to limit, delay or prohibit the making of payments outside of the United States or in a foreign currency or currency unit and (vii) any
laws except the laws of the State of New York. We advise you that issues addressed by this letter may be governed in whole or in
part by other laws, but we express no opinion as to whether any relevant difference exists between the laws upon which our opinions
are based and any other laws which may actually govern.
We hereby consent to
the filing of this opinion with the Commission as Exhibit 5.1 to the Registration Statement. We also consent to the
reference to our firm under the heading “Legal Matters” in the Registration Statement. In giving this consent, we do
not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission.
We do not find it necessary
for the purposes of this opinion, and accordingly we do not purport to cover herein, the application of the securities or “Blue
Sky” laws of the various states to the offering of the Shares.
This opinion is limited
to the specific issues addressed herein, and no opinion may be inferred or implied beyond that expressly stated herein. We assume
no obligation to revise or supplement this opinion should the present laws of the State of New York be changed by legislative action,
judicial decision or otherwise.
This opinion is furnished
to you in connection with the filing of the Registration Statement and is not to be used, circulated, quoted or otherwise relied
upon for any other purposes.
| |
Very truly yours, |
| |
|
| |
/s/ KIRKLAND & ELLIS LLP |
Exhibit 5.2
| Our ref | MUL/779966-000001/65033876v1 | |
|
HealthCor Catalio Acquisition
Corp.
PO Box 309, Ugland House
Grand Cayman
KY1-1104
Cayman Islands |
19 January 2021
HealthCor Catalio Acquisition Corp.
We have acted as counsel as to Cayman Islands
law to HealthCor Catalio Acquisition Corp. (the "Company") in connection with the Company's registration statement
on Form S-1, including all amendments or supplements thereto, filed with the United States Securities and Exchange Commission (the
"Commission") under the United States Securities Act of 1933, as amended (the "Act") (including
its exhibits, the "Registration Statement") for the purposes of, registering with the Commission under the Act,
the offering and sale to the public of up to 17,250,000 Class A ordinary shares of a par value of US$0.0001 of the Company (including
2,250,000 Class A ordinary shares of a par value of US$0.0001 of the Company, which the several underwriters, for whom Jefferies
LLC is acting as representative ("Representative"), will have a 45-day option to purchase from the Company to
cover over-allotments, if any) ("Ordinary Shares") at an offering price of US$10 per Ordinary Share.
This opinion letter is given in accordance
with the terms of the Legal Matters section of the Registration Statement.
We have reviewed originals, copies, drafts
or conformed copies of the following documents:
| 1.1 | The certificate of incorporation dated 18 November 2020 and the memorandum and articles of association
of the Company as registered or adopted on 18 November 2020 (the "Memorandum and Articles"). |
| 1.2 | The written resolutions of the board of directors of the Company dated 24 November 2020 and 19
January 2021 (together, the "Resolutions") and the corporate records of the Company maintained at its registered
office in the Cayman Islands. |
| 1.3 | A certificate of good standing with respect to the Company issued by the Registrar of Companies
(the "Certificate of Good Standing"). |
| 1.4 | A certificate from a director of the Company a copy of which is attached to this opinion letter
(the "Director's Certificate"). |
| 1.5 | The Registration Statement. |
| 1.6 | A draft of the underwriting agreement between the Company and the Representative (the "Document"). |
The following opinions are given only as
to, and based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions
only relate to the laws of the Cayman Islands which are in force on the date of this opinion letter. In giving the following opinions,
we have relied (without further verification) upon the completeness and accuracy, as at the date of this opinion letter, of the
Director's Certificate and the Certificate of Good Standing. We have also relied upon the following assumptions, which we have
not independently verified:
| 2.1 | The Document has been or will be authorised and duly executed and unconditionally delivered by
or on behalf of all relevant parties in accordance with all relevant laws (other than, with respect to the Company, the laws of
the Cayman Islands). |
| 2.2 | The Document is, or will be, legal, valid, binding and enforceable against all relevant parties
in accordance with its terms under the laws of the State of New York (the "Relevant Law") and all other relevant
laws (other than, with respect to the Company, the laws of the Cayman Islands). |
| 2.3 | The choice of the Relevant Law as the governing law of the Document has been made in good faith
and would be regarded as a valid and binding selection which will be upheld by the courts of the State of New York and any other
relevant jurisdiction (other than the Cayman Islands) as a matter of the Relevant Law and all other relevant laws (other than the
laws of the Cayman Islands). |
| 2.4 | Copies of documents, conformed copies or drafts of documents provided to us are true and complete
copies of, or in the final forms of, the originals. |
| 2.5 | All signatures, initials and seals are genuine. |
| 2.6 | The capacity, power, authority and legal right of all parties under all relevant laws and regulations
(other than, with respect to the Company, the laws and regulations of the Cayman Islands) to enter into, execute, unconditionally
deliver and perform their respective obligations under the Document. |
| 2.7 | No invitation has been or will be made by or on behalf of the Company to the public in the Cayman
Islands to subscribe for any of the Ordinary Shares. |
| 2.8 | There is no contractual or other prohibition or restriction (other than as arising under Cayman
Islands law) binding on the Company prohibiting or restricting it from entering into and performing its obligations under the Document. |
| 2.9 | No monies paid to or for the account of any party under the Document or any property received or
disposed of by any party to the Document in each case in connection with the Documents or the consummation of the transactions
contemplated thereby represent or will represent proceeds of criminal conduct or criminal property or terrorist property (as defined
in the Proceeds of Crime Act (2020 Revision) and the Terrorism Act (2018 Revision), respectively). |
| 2.10 | There is nothing under any law (other than the laws of the Cayman Islands) which would or might
affect the opinions set out below. Specifically, we have made no independent investigation of the Relevant Law. |
| 2.11 | The Company will receive money or money's worth in consideration for the issue of the Ordinary
Shares and none of the Ordinary Shares were or will be issued for less than par value. |
Save as aforesaid we have not been instructed
to undertake and have not undertaken any further enquiry or due diligence in relation to the transaction the subject of this opinion
letter.
Based upon, and subject to, the foregoing
assumptions and the qualifications set out below, and having regard to such legal considerations as we deem relevant, we are of
the opinion that:
| 3.1 | The Company has been duly incorporated as an exempted company with limited liability and is validly
existing and in good standing with the Registrar of Companies under the laws of the Cayman Islands. |
| 3.2 | The Ordinary Shares to be offered and issued by the Company as contemplated by the Registration
Statement have been duly authorised for issue, and when issued by the Company against payment in full of the consideration as set
out in the Registration Statement and in accordance with the terms set out in the Registration Statement, such Ordinary Shares
will be validly issued, fully paid and non-assessable. As a matter of Cayman Islands law, a share is only issued when it has been
entered in the register of members (shareholders). |
The opinions expressed above are subject
to the following qualifications:
| 4.1 | The term "enforceable" as used above means that the obligations assumed by the
Company under the Document are of a type which the courts of the Cayman Islands will enforce. It does not mean that those obligations
will necessarily be enforced in all circumstances in accordance with their terms. In particular: |
| (a) | enforcement may be limited by bankruptcy, insolvency, liquidation, reorganisation, readjustment
of debts or moratorium or other laws of general application relating to or affecting the rights of creditors; |
| (b) | enforcement may be limited by general principles of equity. For example, equitable remedies such
as specific performance may not be available, inter alia, where damages are considered to be an adequate remedy; |
| (c) | where obligations are to be performed in a jurisdiction outside the Cayman Islands, they may not
be enforceable in the Cayman Islands to the extent that performance would be illegal under the laws of that jurisdiction; and |
| (d) | some claims may become barred under relevant statutes of limitation or may be or become subject
to defences of set off, counterclaim, estoppel and similar defences. |
| 4.2 | To maintain the Company in good standing with the Registrar of Companies under the laws of the
Cayman Islands, annual filing fees must be paid and returns made to the Registrar of Companies within the time frame prescribed
by law. |
| 4.3 | Under Cayman Islands law, the register of members (shareholders) is prima facie evidence
of title to shares and this register would not record a third party interest in such shares. However, there are certain limited
circumstances where an application may be made to a Cayman Islands court for a determination on whether the register of members
reflects the correct legal position. Further, the Cayman Islands court has the power to order that the register of members maintained
by a company should be rectified where it considers that the register of members does not reflect the correct legal position. As
far as we are aware, such applications are rarely made in the Cayman Islands and for the purposes of the opinion given in paragraph
3.2, there are no circumstances or matters of fact known to us on the date of this opinion letter which would properly form the
basis for an application for an order for rectification of the register of members of the Company, but if such an application were
made in respect of the Ordinary Shares, then the validity of such shares may be subject to re-examination by a Cayman Islands court. |
| 4.4 | Except as specifically stated herein, we make no comment with respect to any representations and
warranties which may be made by or with respect to the Company in any of the documents or instruments cited in this opinion letter
or otherwise with respect to the commercial terms of the transactions the subject of this opinion letter. |
| 4.5 | In this opinion letter, the phrase "non-assessable" means, with respect to shares in
the Company, that a shareholder shall not, solely by virtue of its status as a shareholder, be liable for additional assessments
or calls on the shares by the Company or its creditors (except in exceptional circumstances, such as involving fraud, the establishment
of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or
lift the corporate veil). |
We hereby consent to the filing of this
opinion letter as an exhibit to the Registration Statement and to the references to our firm under the headings "Legal Matters",
"Risk Factors", "Shareholders' Suits" and "Enforcement of Civil Liabilities" in the prospectus included
in the Registration Statement. In providing our consent, we do not thereby admit that we are in the category of persons whose consent
is required under Section 7 of the Act or the Rules and Regulations of the Commission thereunder.
This opinion letter is addressed to you
and may be relied upon by you, your counsel and purchasers of Units pursuant to the Registration Statement. This opinion letter
is limited to the matters detailed herein and is not to be read as an opinion with respect to any other matter.
Yours faithfully,
| /s/ Maples and Calder |
|
| Maples and Calder |
|
HealthCor Catalio Acquisition Corp.
PO Box 309, Ugland House
Grand Cayman
KY1-1104
Cayman Islands
19 January 2021
To: Maples and Calder
PO Box 309, Ugland
House
Grand Cayman
KY1-1104
Cayman Islands
HealthCor Catalio Acquisition Corp.
(the "Company")
I, the undersigned, being a director of
the Company, am aware that you are being asked to provide an opinion letter (the "Opinion") in relation to certain
aspects of Cayman Islands law. Unless otherwise defined herein, capitalised terms used in this certificate have the respective
meanings given to them in the Opinion. I hereby certify that:
| 1 | The Memorandum and Articles remain in full force and effect and are unamended. |
| 2 | The Company has not entered into any mortgages or charges over its property or assets other than
those entered in the register of mortgages and charges of the Company. |
| 3 | Each of the Resolutions were duly passed in the manner prescribed in the Memorandum and Articles
(including, without limitation, with respect to the disclosure of interests (if any) by directors of the Company) and have not
been amended, varied or revoked in any respect. |
| 4 | The authorised share capital of the Company is US$55,500 divided into 500,000,000 Class A ordinary
shares of a par value of US$0.0001 each, 50,000,000 Class B ordinary shares of a par value of US$0.0001 each and 5,000,000 preference
shares of a par value of US$0.0001 each. The issued share capital of the Company is 4,312,500 Class B ordinary shares, which have
been duly authorised and are validly issued as fully-paid and non-assessable. |
| 5 | The shareholders of the Company (the "Shareholders") have not restricted the powers
of the directors of the Company in any way. |
| 6 | The directors of the Company at the date of each of the Resolutions and at the date of this certificate
were and are as follows: Chris Gaulin and Joseph Healey. |
| 7 | The minute book and corporate records of the Company as maintained at its registered office in
the Cayman Islands and made available to you are complete and accurate in all material respects, and all minutes and resolutions
filed therein represent a complete and accurate record of all meetings of the Shareholders and directors (or any committee thereof)
of the Company (duly convened in accordance with the Memorandum and Articles) and all resolutions passed at the meetings or passed
by written resolution or consent, as the case may be. |
| 8 | Prior to, at the time of, and immediately following the approval of the transactions contemplated
by the Registration Statement, the Company was, or will be, able to pay its debts as they fell, or fall, due and has entered, or
will enter, into the transactions contemplated by the Registration Statement for proper value and not with an intention to defraud
or wilfully defeat an obligation owed to any creditor or with a view to giving a creditor a preference. |
| 9 | Each director of the Company considers the transactions contemplated by the Registration Statement
to be of commercial benefit to the Company and has acted in good faith in the best interests of the Company, and for a proper purpose
of the Company, in relation to the transactions which are the subject of the Opinion. |
| 10 | To the best of my knowledge and belief, having made due inquiry, the Company is not the subject
of legal, arbitral, administrative or other proceedings in any jurisdiction. Nor have the directors or Shareholders taken any steps
to have the Company struck off or placed in liquidation, nor have any steps been taken to wind up the Company. Nor has any receiver
been appointed over any of the Company's property or assets. |
| 11 | To the best of my knowledge and belief, having made due inquiry, there are no circumstances or
matters of fact existing which may properly form the basis for an application for an order for rectification of the register of
members of the Company. |
| 12 | The Registration Statement has been, or will be, authorised and duly executed and delivered by
or on behalf of all relevant parties in accordance with all relevant laws. |
| 13 | No invitation has been made or will be made by or on behalf of the Company to the public in the
Cayman Islands to subscribe for any of the Ordinary Shares. |
| 14 | The Ordinary Shares to be issued pursuant to the Registration Statement have been, or will be,
duly registered, and will continue to be registered, in the Company's register of members (shareholders). |
| 15 | The Company is not a central bank, monetary authority or other sovereign entity of any state and
is not a subsidiary, direct or indirect, of any sovereign entity or state. |
| 16 | There is no contractual or other prohibition or restriction (other than as arising under Cayman
Islands law) binding on the Company prohibiting or restricting it from entering into and performing its obligations under the Documents. |
(Signature Page follows)
I confirm that you may continue to rely
on this certificate as being true and correct on the day that you issue the Opinion unless I shall have previously notified you
in writing personally to the contrary.
| Signature: |
/s/ Joseph Healey |
|
| Name: |
Joseph Healey |
|
| Title: |
Director |
|
Exhibit 10.1
INVESTMENT MANAGEMENT
TRUST AGREEMENT
This Investment Management
Trust Agreement (this “Agreement”) is made effective as of [●], 2021 by and between HealthCor Catalio
Acquisition Corp., a Cayman Islands exempted company (the “Company”), and Continental Stock Transfer &
Trust Company, a New York corporation (the “Trustee”).
WHEREAS, the
Company’s registration statement on Form S-1, File No. 333-252002 (the “Registration
Statement”) and prospectus (the “Prospectus”) for the initial public offering of the
Company’s Class A ordinary shares, par value $0.0001 per share (the “Ordinary Shares”) (such initial public offering hereinafter referred to as the “Offering”), has been declared
effective as of the date hereof by the U.S. Securities and Exchange Commission; and
WHEREAS, the Company
has entered into an Underwriting Agreement (the “Underwriting Agreement”) with Jefferies LLC, as sole
underwriter (the “Underwriter”); and
WHEREAS, as described
in the Prospectus, $150,000,000 of the gross proceeds of the Offering and sale of the Private Placement Shares (as defined in the
Underwriting Agreement) (or $172,500,000 if the Underwriter’s option to purchase additional shares is exercised in full) will
be delivered to the Trustee to be deposited and held in a segregated trust account located at all times in the United States (the
“Trust Account”) for the benefit of the Company and the holders of the Ordinary Shares issued in the Offering as hereinafter provided (the amount to be delivered to the Trustee (and any interest subsequently
earned thereon) is referred to herein as the “Property,” the shareholders for whose benefit the Trustee
shall hold the Property will be referred to as the “Public Shareholders,” and the Public Shareholders
and the Company will be referred to together as the “Beneficiaries”); and
WHEREAS, pursuant to
the Underwriting Agreement, a portion of the Property equal to $5,250,000, or $6,037,500 if the Underwriter’s option to purchase
additional shares is exercised in full, is attributable to deferred underwriting discounts and commissions that will be payable
by the Company to the Underwriter upon the consummation of the Business Combination (as defined below) (the “Deferred
Discount”); and
WHEREAS, the Company
and the Trustee desire to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold
the Property.
NOW THEREFORE, IT
IS AGREED:
1. Agreements
and Covenants of Trustee. The Trustee hereby agrees and covenants to:
(a) Hold
the Property in trust for the Beneficiaries in accordance with the terms of this Agreement in the Trust Account established
by the Trustee located in the United States at J.P. Morgan Chase Bank, N.A. (or at another U.S. chartered commercial bank
with consolidated assets of $100 billion or more), maintained by Trustee and at a brokerage institution selected by
the Trustee that is reasonably satisfactory to the Company;
(b) Manage,
supervise and administer the Trust Account subject to the terms and conditions set forth herein;
(c) In
a timely manner, upon the written instruction of the Company, invest and reinvest the Property in United States government securities
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 185 days or
less, or in money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7
promulgated under the Investment Company Act of 1940, as amended (or any successor rule), which invest only in direct U.S. government
treasury obligations, as determined by the Company; the Trustee may not invest in any other securities or assets, it being understood
that the Trust Account will earn no interest while account funds are uninvested awaiting the Company’s instructions hereunder
and the Trustee may earn bank credits or other consideration;
(d) Collect
and receive, when due, all principal, interest or other income arising from the Property, which shall become part of the “Property,”
as such term is used herein;
(e) Promptly
notify the Company and the Underwriter of all communications received by the Trustee with respect to any Property requiring action
by the Company;
(f) Supply
any necessary information or documents as may be requested by the Company (or its authorized agents) in connection with the Company’s
preparation of the tax returns relating to assets held in the Trust Account;
(g) Participate
in any plan or proceeding for protecting or enforcing any right or interest arising from the Property if, as and when instructed
by the Company to do so;
(h) Render
to the Company monthly written statements of the activities of, and amounts in, the Trust Account reflecting all receipts and disbursements
of the Trust Account;
(i) Commence
liquidation of the Trust Account only after and promptly following (x) receipt of, and only in accordance with, the
terms of a letter from the Company (“Termination Letter”) in a form substantially similar to that
attached hereto as either Exhibit A or Exhibit B, as applicable, signed on behalf of the Company by
its Chief Executive Officer, Chief Financial Officer or other authorized officer of the Company, and complete the liquidation
of the Trust Account and distribute the Property in the Trust Account, including interest earned on the funds held in the
Trust Account and not previously released to the Company to pay its income taxes, if any, (less up to $100,000 of interest to
pay dissolution expenses), only as directed in the Termination Letter and the other documents referred to therein, or
(y) upon the date which is the later of (1) 24 months after the closing of the Offering and (2) such later
date as may be approved by the Company’s shareholders in accordance with the Company’s amended and restated
memorandum and articles of association, if a Termination Letter has not been received by the Trustee prior to such date, in
which case the Trust Account shall be liquidated in accordance with the procedures set forth in the Termination Letter
attached as Exhibit B and the Property in the Trust Account, including interest earned on the funds held in the
Trust Account and not previously released to the Company to pay its income taxes, if any, (less up to $100,000 of
interest to pay dissolution expenses), shall be distributed to the Public Shareholders of record as of such date. It is
acknowledged and agreed that there should be no reduction in the principal amount per share initially deposited in the Trust
Account;
(j) Upon
written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto
as Exhibit C (a “Tax Payment Withdrawal Instruction”), withdraw from the Trust Account and
distribute to the Company the amount of interest earned on the Property requested by the Company to cover any tax obligation owed
by the Company as a result of assets of the Company or interest or other income earned on the Property, which amount shall be delivered
directly to the Company by electronic funds transfer or other method of prompt payment, and the Company shall forward such payment
to the relevant taxing authority, so long as there is no reduction in the principal amount initially deposited in the Trust Account;
provided, however, that to the extent there is not sufficient cash in the Trust Account to pay such tax obligation,
the Trustee shall liquidate such assets held in the Trust Account as shall be designated by the Company in writing to make such
distribution, so long as there is no reduction in the principal amount initially deposited in the Trust Account (it being acknowledged
and agreed that any such amount in excess of interest income earned on the Property shall not be payable from the Trust Account).
The written request of the Company referenced above shall constitute presumptive evidence that the Company is entitled to said
funds, and the Trustee shall have no responsibility to look beyond said request;
(k) Upon
written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto
as Exhibit D (a “Shareholder Redemption Withdrawal Instruction”), the Trustee shall distribute
to the remitting brokers on behalf of Public Shareholders redeeming Ordinary Shares the amount required to pay redeemed Ordinary
Shares from Public Shareholders pursuant to the Company’s amended and restated memorandum and articles of association; and
(l) Not
make any withdrawals or distributions from the Trust Account other than pursuant to Section 1(i), 1(j) or
1(k) above.
2. Agreements
and Covenants of the Company. The Company hereby agrees and covenants to:
(a) Give
all instructions to the Trustee hereunder in writing, signed by the Company’s Chief Executive Officer, Chief Financial Officer,
Secretary or other authorized officer of the Company. In addition, except with respect to its duties under Sections 1(i),
(j) or (k) hereof, the Trustee shall be entitled to rely on, and shall be protected in relying on, any
verbal or telephonic advice or instruction which it, in good faith and with reasonable care, believes to be given by any one of
the persons authorized above to give written instructions, provided that the Company shall promptly confirm such instructions in
writing;
(b) Subject
to Section 4 hereof, hold the Trustee harmless and indemnify the Trustee from and against any and all reasonable
and documented expenses, including reasonable counsel fees and disbursements, or losses suffered by the Trustee in
connection with any action taken by it hereunder and in connection with any action, suit or other proceeding brought against
the Trustee involving any claim, or in connection with any claim or demand, which in any way arises out of or relates to this
Agreement, the services of the Trustee hereunder, or the Property or any interest earned on the Property, except for expenses
and losses resulting from the Trustee’s gross negligence, fraud or willful misconduct. Promptly after the receipt by
the Trustee of notice of demand or claim or the commencement of any action, suit or proceeding, pursuant to which the Trustee
intends to seek indemnification under this Section 2(b), it shall notify the Company in writing of such claim
(hereinafter referred to as the “Indemnified Claim”). The Trustee shall have the right to conduct
and manage the defense against such Indemnified Claim; provided that the Trustee shall obtain the consent of the
Company with respect to the selection of counsel, which consent shall not be unreasonably withheld. The Trustee may not agree
to settle any Indemnified Claim without the prior written consent of the Company, which such consent shall not be
unreasonably withheld. The Company may participate in such action with its own counsel;
(c) Pay
the Trustee the fees set forth on Schedule A hereto, including an initial acceptance fee, annual administration fee, and
transaction processing fee which fees shall be subject to modification by the parties from time to time. It is expressly understood
that the Property shall not be used to pay such fees unless and until it is distributed to the Company pursuant to Sections
1(i) through 1(k) hereof. The Company shall pay the Trustee the initial acceptance fee and the first annual
administration fee at the consummation of the Offering. The Trustee shall refund to the Company the annual administration fee (on
a pro rata basis) with respect to any period after the liquidation of the Trust Account. The Company shall not be responsible for
any other fees or charges of the Trustee except as set forth in this Section 2(c) and as may be provided in Section 2(b) hereof;
(d) In
connection with any vote of the Company’s shareholders regarding a merger, share exchange, asset acquisition, share purchase,
reorganization or similar business combination involving the Company and one or more businesses (the “Business Combination”),
provide to the Trustee an affidavit or certificate of the inspector of elections for the shareholder meeting verifying the vote
of such shareholders regarding such Business Combination;
(e) Provide
the Underwriter with a copy of any Termination Letter(s) and/or any other correspondence that is sent to the Trustee with
respect to any proposed withdrawal from the Trust Account promptly after it issues the same;
(f) Unless
otherwise agreed between the Company and the Underwriter, ensure that any Instruction Letter (as defined in Exhibit A)
delivered in connection with a Termination Letter in the form of Exhibit A expressly provides that the Deferred Discount
is paid directly to the account or accounts directed by the Underwriter prior to any transfer of the funds held in the Trust Account
to the Company or any other person;
(g) Instruct
the Trustee to make only those distributions that are permitted under this Agreement, and refrain from instructing the Trustee
to make any distributions that are not permitted under this Agreement;
(h) If
the Company seeks to amend any provisions of its amended and restated memorandum and articles of association (A) to modify
the substance or timing of the Company’s obligation to provide holders of the Ordinary Shares the right to have their shares
redeemed in connection with the Company’s initial Business Combination or to redeem 100% of the Ordinary Shares if the Company
does not complete its initial Business Combination within the time period set forth therein or (B) with respect to any other
provision relating to the rights of holders of the Ordinary Shares or pre-initial Business Combination activity (in each case,
an “Amendment”), the Company will provide the Trustee with a letter (an “Amendment Notification
Letter”) in the form of Exhibit D providing instructions for the distribution of funds to Public Shareholders
who exercise their redemption option and properly tender their shares in connection with such Amendment; and
(i) Within
five (5) business days after the Underwriter exercises its option to purchase additional shares (or any unexercised
portion thereof) or such option to purchase additional shares expires, provide the Trustee with a notice in writing of the
total amount of the Deferred Discount.
3. Limitations
of Liability. The Trustee shall have no responsibility or liability to:
(a) Imply
obligations, perform duties, inquire or otherwise be subject to the provisions of any agreement or document other than this Agreement
and that which is expressly set forth herein;
(b) Take
any action with respect to the Property, other than as directed in Section 1 hereof, and the Trustee shall have no
liability to any third party except for liability arising out of the Trustee’s gross negligence, fraud or willful misconduct;
(c) Institute
any proceeding for the collection of any principal and income arising from, or institute, appear in or defend any proceeding of
any kind with respect to, any of the Property unless and until it shall have received written instructions from the Company given
as provided herein to do so and the Company shall have advanced or guaranteed to it funds sufficient to pay any expenses incident
thereto;
(d) Change
the investment of any Property, other than in compliance with Section 1 hereof;
(e) Refund
any depreciation in principal of any Property;
(f) Assume
that the authority of any person designated by the Company to give instructions hereunder shall not be continuing unless provided
otherwise in such designation, or unless the Company shall have delivered a written revocation of such authority to the Trustee;
(g) The
other parties hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or
omitted, in good faith and in the Trustee’s best judgment, except for the Trustee’s gross negligence,
fraud or willful misconduct. The Trustee may rely conclusively and shall be protected in acting upon any order, notice,
demand, certificate, opinion or advice of counsel (including counsel chosen by the Trustee with written notification to the
Company, which counsel may be the Company’s counsel), statement, instrument, report or other paper or document (not
only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability
of any information therein contained) which the Trustee believes, in good faith and with reasonable care, to be genuine and
to be signed or presented by the proper person or persons. The Trustee shall not be bound by any notice or demand, or any
waiver, modification, termination or rescission of this Agreement or any of the terms hereof, unless evidenced by a written
instrument delivered to the Trustee, signed by the proper party or parties and, if the duties or rights of the Trustee are
affected, unless it shall give its prior written consent thereto;
(h) Verify
the accuracy of the information contained in the Registration Statement;
(i) Provide
any assurance that any Business Combination entered into by the Company or any other action taken by the Company is as contemplated
by the Registration Statement;
(j) File
information returns with respect to the Trust Account with any local, state or federal taxing authority or provide periodic written
statements to the Company documenting the taxes payable by the Company, if any, relating to any interest income earned on the Property;
(k) Prepare,
execute and file tax reports, income or other tax returns and pay any taxes with respect to any income generated by, and activities
relating to, the Trust Account, regardless of whether such tax is payable by the Trust Account or the Company, including, but not
limited to, income tax obligations, except pursuant to Section 1(j) hereof; or
(l) Verify
calculations, qualify or otherwise approve the Company’s written requests for distributions pursuant to Sections 1(i),
1(j) or 1(k) hereof.
4. Trust
Account Waiver. The Trustee has no right of set-off or any right, title, interest or claim of any kind (“Claim”)
to, or to any monies in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account
that it may have now or in the future. In the event the Trustee has any Claim against the Company under this Agreement, including,
without limitation, under Section 2(b) or Section 2(c) hereof, the Trustee shall pursue such Claim solely
against the Company and its assets outside the Trust Account and not against the Property or any monies in the Trust Account.
5. Termination.
This Agreement shall terminate as follows:
(a) If
the Trustee gives written notice to the Company that it desires to resign under this Agreement, the Company shall use its reasonable
efforts to locate a successor trustee, pending which the Trustee shall continue to act in accordance with this Agreement. At such
time that the Company notifies the Trustee that a successor trustee has been appointed by the Company and has agreed to become
subject to the terms of this Agreement, the Trustee shall transfer the management of the Trust Account to the successor trustee,
including but not limited to the transfer of copies of the reports and statements relating to the Trust Account, whereupon this
Agreement shall terminate; provided, however, that in the event that the Company does not locate a successor trustee
within ninety (90) days of receipt of the resignation notice from the Trustee, the Trustee may submit an application to have the
Property deposited with any court in the State of New York or with the United States District Court for the Southern District of
New York and upon such deposit, the Trustee shall be immune from any liability whatsoever; or
(b) At
such time that the Trustee has completed the liquidation of the Trust Account and its obligations in accordance with the provisions
of Section 1(i) hereof and distributed the Property in accordance with the provisions of the Termination Letter,
this Agreement shall terminate except with respect to Section 2(b).
6. Miscellaneous.
(a) The
Company and the Trustee each acknowledge that the Trustee will follow the security procedures set forth herein with respect to
funds transferred from the Trust Account. The Company and the Trustee will each restrict access to confidential information relating
to such security procedures to authorized persons. Each party must notify the other party immediately if it has reason to believe
unauthorized persons may have obtained access to such confidential information, or of any change in its authorized personnel. In
executing funds transfers, the Trustee shall rely upon all information supplied to it by the Company, including, account names,
account numbers, and all other identifying information relating to a Beneficiary, Beneficiary’s bank or intermediary bank.
Except for any liability arising out of the Trustee’s gross negligence, fraud or willful misconduct, the Trustee shall not
be liable for any loss, liability or expense resulting from any error in the information or transmission of the funds.
(b) This
Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. This
Agreement may be executed in several original or facsimile counterparts, each one of which shall constitute an original, and together
shall constitute but one instrument.
(c) This
Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter hereof.
Except for Section 1(i), 1(j) and 1(k) hereof (which sections may not be modified,
amended or deleted without the affirmative vote of sixty-five percent (65%) of the then outstanding Ordinary Shares and
Class B ordinary shares, par value $0.0001 per share, of the Company, voting together as a single class), provided
that no such amendment will affect any Public Shareholder who has properly elected to redeem his or her Ordinary
Shares in connection with a shareholder vote for an Amendment, this Agreement or any provision hereof may only be changed,
amended or modified (other than to correct a typographical error) by a writing signed by each of the parties hereto.
(d) The
parties hereto consent to the jurisdiction and venue of any state or federal court located in the City of New York, State of New
York, for purposes of resolving any disputes hereunder. AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING TO THIS
AGREEMENT, EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY.
(e) Any
notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing
and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery
or by electronic mail or facsimile transmission:
if to the Trustee, to:
Continental Stock Transfer &
Trust Company
1 State Street, 30th
Floor
New York, New York 10004
| Attn: | Francis Wolf. & Celeste Gonzalez |
| Email: | fwolf@continentalstock.com
cgonzalez@continentalstock.com |
if to the Company, to:
HealthCor Catalio Acquisition
Corp.
55 Hudson Yards, 28th Floor,
New York, New York 10001
| Attn: | Chris Gaulin |
| Email: | chris@hccspac.com |
in each case, with copies to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
| Attn: | Christian O. Nagler
Debbie P. Yee |
| Email: | cnagler@kirkland.com
debbie.yee@kirkland.com |
and
Jefferies LLC
520 Madison Avenue
New York, New York 10022
| Attn: | General Counsel |
| Facsimile: | (646) 619-4437 |
and
Paul Hastings LLP
200 Park Avenue
New York, New York 10166
| Attn.: | Frank Lopez
Jonathan Ko |
James M. Shea, Jr.
| Email: | franklopez@paulhastings.com
jonathanko@paulhastings.com |
jamesshea@paulhastings.com
(f) Each
of the Company and the Trustee hereby represents that it has the full right and power and has been duly authorized to enter into
this Agreement and to perform its respective obligations as contemplated hereunder. The Trustee acknowledges and agrees that it
shall not make any claims or proceed against the Trust Account, including by way of set-off, and shall not be entitled to any funds
in the Trust Account under any circumstance.
(g) This
Agreement is the joint product of the Trustee and the Company and each provision hereof has been subject to the mutual consultation,
negotiation and agreement of such parties and shall not be construed for or against any party hereto.
(h) This
Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts
shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or electronic
transmission shall constitute valid and sufficient delivery thereof.
(i) Each
of the Company and the Trustee hereby acknowledges and agrees that the Underwriter is a third-party beneficiary of this Agreement.
(j) Except
as specified herein, no party to this Agreement may assign its rights or delegate its obligations hereunder to any other person
or entity.
[Signature Page Follows]
IN
WITNESS WHEREOF, the parties have duly executed this Investment Management Trust Agreement as of the date first written
above.
| |
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY, as Trustee |
| |
|
| |
By: |
|
| |
Name: |
|
| |
Title: |
|
| |
|
| |
HealthCor
Catalio Acquisition Corp. |
| |
|
| |
By: |
|
| |
Name: |
Christine Clarke |
| |
Title: |
Chief Financial Officer |
SCHEDULE A
| Fee Item | |
Time and method of payment | |
Amount | |
| Initial acceptance fee | |
Initial closing of the Offering by wire transfer | |
$ | 3,500.00 | |
| Annual fee | |
First year, initial closing of the Offering by wire transfer; thereafter on the anniversary of the effective date of the Offering by wire transfer or check | |
$ | 10,000.00 | |
| Transaction processing fee for disbursements to Company under Sections 1(i),(j), and (k) | |
Billed by Trustee to Company under Section 1 | |
$ | 250.00 | |
| Paying Agent services as required pursuant to Section 1(i) and 1(k) | |
Billed to Company upon delivery of service pursuant to Section 1(i) and 1(k) | |
| Prevailing rates | |
EXHIBIT A
[Letterhead of Company]
[Insert date]
Continental Stock Transfer &
Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis E. Wolf, Jr. &
Celeste Gonzalez
Re: Trust
Account - Termination Letter
Ladies and Gentlemen:
Pursuant to Section 1(i) of
the Investment Management Trust Agreement between HealthCor Catalio Acquisition Corp. (the “Company”)
and Continental Stock Transfer & Trust Company (“Trustee”), dated as of [●], 2021 (the
“Trust Agreement”), this is to advise you that the Company has entered into an agreement with (the “Target
Business”) to consummate a business combination with Target Business (the “Business Combination”)
on or about [insert date]. The Company shall notify you at least seventy-two (72) hours in advance of the actual date (or
such shorter time period as you may agree) of the consummation of the Business Combination (the “Consummation Date”).
Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
In accordance with
the terms of the Trust Agreement, we hereby authorize you to commence to liquidate all of the assets of the Trust Account, and
to transfer the proceeds into the trust operating account at J.P. Morgan Chase Bank, N.A. to the effect that, on the Consummation
Date, all of the funds held in the Trust Account will be immediately available for transfer to the account or accounts that the
Underwriter (with respect to the Deferred Discount) and the Company shall direct on the Consummation Date. It is acknowledged and
agreed that while the funds are on deposit in said trust operating account at J.P. Morgan Chase Bank, N.A. awaiting distribution,
neither the Company nor the Underwriter will earn any interest or dividends.
On the
Consummation Date (i) counsel for the Company shall deliver to you written notification that the Business Combination
has been consummated, or will be consummated substantially concurrently with your transfer of funds to the accounts as
directed by the Company (the “Notification”), and (ii) the Company shall deliver to you
(a) a certificate of the Chief Executive Officer, Chief Financial Officer or other authorized officer of the Company,
which verifies that the Business Combination has been approved by a vote of the Company’s shareholders, if a vote is
held and (b) joint written instruction signed by the Company and the Underwriter with respect to the transfer of the
funds held in the Trust Account, including payment of the Deferred Discount to account or accounts directed by the
Underwriter from the Trust Account (the “Instruction Letter”). You are hereby directed and
authorized to transfer the funds held in the Trust Account immediately upon your receipt of the Notification and the
Instruction Letter, in accordance with the terms of the Instruction Letter. In the event that certain deposits held in the
Trust Account may not be liquidated by the Consummation Date without penalty, you will notify the Company in writing of the
same and the Company shall direct you as to whether such funds should remain in the Trust Account and be distributed after
the Consummation Date to the Company. Upon the distribution of all the funds, net of any payments necessary for reasonable
unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement shall be
terminated.
In the event that the
Business Combination is not consummated on the Consummation Date described in the notice thereof and we have not notified you on
or before the original Consummation Date of a new Consummation Date, then upon receipt by the Trustee of written instructions from
the Company, the funds held in the Trust Account shall be reinvested as provided in Section 1(c) of the Trust Agreement
on the business day immediately following the Consummation Date as set forth in such notice as soon thereafter as possible.
| |
Very truly yours, |
| |
|
| |
HealthCor Catalio Acquisition
Corp. |
| |
|
| |
By: |
|
| |
Name: |
Christine Clarke |
| |
Title: |
Chief Financial Officer |
EXHIBIT B
[Letterhead of Company]
[Insert date]
Continental Stock Transfer &
Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis E. Wolf, Jr. &
Celeste Gonzalez
Re: Trust
Account - Termination Letter
Ladies and Gentlemen:
Pursuant to Section 1(i) of
the Investment Management Trust Agreement between HealthCor Catalio Acquisition Corp. (the “Company”)
and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of [●], 2021
(the “Trust Agreement”), this is to advise you that the Company has been unable to effect a business
combination with a Target Business (the “Business Combination”) within the time frame specified in the
Company’s Amended and Restated Memorandum and Articles of Association, as described in the Company’s Prospectus relating
to the Offering. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
In accordance with
the terms of the Trust Agreement, we hereby authorize you to liquidate all of the assets in the Trust Account on [●], 20[●],
and to transfer the total proceeds into the trust operating account at J.P. Morgan Chase Bank, N.A. to await distribution to the
Public Shareholders. The Company has selected as the effective date for the purpose of determining when the Public Shareholders
will be entitled to receive their share of the liquidation proceeds. It is acknowledged that no interest will be earned by the
Company on the liquidation proceeds while on deposit in the trust operating account. You agree to be the Paying Agent of record
and, in your separate capacity as Paying Agent, agree to distribute said funds directly to the Company’s Public Shareholders
in accordance with the terms of the Trust Agreement and the Amended and Restated Memorandum and Articles of Association of the
Company. Upon the distribution of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to
liquidating the Trust Account, your obligations under the Trust Agreement shall be terminated, except to the extent otherwise provided
in Section 1(j) of the Trust Agreement.
| |
Very truly yours, |
| |
|
| |
HealthCor Catalio Acquisition
Corp. |
| |
|
| |
By: |
|
| |
Name: |
Christine Clarke |
| |
Title: |
Chief Financial Officer |
EXHIBIT C
[Letterhead of Company]
[Insert date]
Continental Stock Transfer &
Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis E. Wolf, Jr. &
Celeste Gonzalez
Re: Trust
Account - Tax Payment Withdrawal Instruction
Ladies and Gentlemen:
Pursuant to Section 1(j) of
the Investment Management Trust Agreement between HealthCor Catalio Acquisition Corp. (the “Company”)
and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of [●], 2021
(the “Trust Agreement”), the Company hereby requests that you deliver to the Company $ of the interest
income earned on the Property as of the date hereof. Capitalized terms used but not defined herein shall have the meanings set
forth in the Trust Agreement.
The Company needs such
funds to pay for the tax obligations as set forth on the attached tax return or tax statement. In accordance with the terms of
the Trust Agreement, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt
of this letter to the Company’s operating account at:
[WIRE INSTRUCTION INFORMATION]
| |
Very truly yours, |
| |
|
| |
HealthCor Catalio Acquisition
Corp. |
| |
|
| |
By: |
|
| |
Name: |
Christine Clarke |
| |
Title: |
Chief Financial Officer |
EXHIBIT D
[Letterhead of Company]
[Insert date]
Continental Stock Transfer &
Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis E. Wolf, Jr. &
Celeste Gonzalez
Re: Trust
Account - Shareholder Redemption Withdrawal Instruction
Ladies and Gentlemen:
Pursuant to Section 1(k) of
the Investment Management Trust Agreement between HealthCor Catalio Acquisition Corp. (the “Company”)
and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of [●], 2021
(the “Trust Agreement”), the Company hereby requests that you deliver to the redeeming Public Shareholders
on behalf of the Company $[●] of the principal and interest income earned on the Property as of the date hereof. Capitalized
terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
Pursuant to Section 1(k) of
the Trust Agreement, this is to advise you that the Company has sought an Amendment. Accordingly, in accordance with the terms
of the Trust Agreement, we hereby authorize you to liquidate a sufficient portion of the Trust Account and to transfer $[●]
of the proceeds of the Trust Account to the trust operating account at J.P. Morgan Chase Bank, N.A. for distribution to the shareholders
that have requested redemption of their shares in connection with such Amendment.
| |
Very truly yours, |
| |
|
| |
HealthCor Catalio Acquisition
Corp. |
| |
|
| |
By: |
|
| |
Name: |
Christine Clarke |
| |
Title: |
Chief Financial Officer |
Exhibit 10.2
REGISTRATION AND SHAREHOLDER RIGHTS AGREEMENT
THIS REGISTRATION AND
SHAREHOLDER RIGHTS AGREEMENT (this “Agreement”), dated as of [●], 2021, is made and entered into
by and among HealthCor Catalio Acquisition Corp., a Cayman Islands exempted company (the “Company”),
HC Sponsor LLC, a Cayman Islands limited liability company (the “Sponsor”), and the undersigned parties
listed under Holder on the signature page hereto (each such party, including the Sponsor and any person or entity who hereafter
becomes a party to this Agreement pursuant to Section 6.2 of this Agreement, a “Holder” and
collectively, the “Holders”).
RECITALS
WHEREAS,
the Sponsor currently owns 4,207,500 shares of the Company’s Class B ordinary shares, par value $0.0001 per share (the
“Class B Ordinary Shares”), and the other Holders currently own an aggregate of 105,000 Class B
Ordinary Shares, which were received from the Sponsor;
WHEREAS,
the Class B Ordinary Shares are convertible into the Company’s Class A ordinary shares, par value $0.0001 per share
(the “Ordinary Shares”), at the time of the initial Business Combination (as defined below) on a one-for-one
basis, subject to adjustment, on the terms and conditions provided in the Company’s amended and restated memorandum and articles
of association, as may be amended from time to time;
WHEREAS,
on [●], 2021, the Company and the Sponsor entered into that certain Private Placement Share Purchase Agreement, pursuant
to which the Sponsor agreed to purchase 500,000 Ordinary Shares (or up to 545,000 Ordinary Shares if the Underwriter’s (as
defined below) option to purchase additional Ordinary Shares in connection with the Company’s initial public offering is
exercised in full) (the “Private Placement Shares”), in a private placement transaction occurring simultaneously
with the closing of the Company’s initial public offering;
WHEREAS,
in order to finance the Company’s transaction costs in connection with an intended Business Combination, the Sponsor, an
affiliate of the Sponsor or certain of the Company’s officers or directors may, but are not obligated to, loan the Company
funds as the Company may require, of which up to $1,500,000 of such loans may be convertible into up to 150,000 Ordinary Shares
of the post-Business Combination company at a price of $10.00 per share at the option of the lender (the “Working Capital
Shares”); and
WHEREAS,
the Company and the Holders desire to enter into this Agreement, pursuant to which the Company shall grant the Holders certain
registration rights with respect to certain securities of the Company, as set forth in this Agreement.
NOW,
THEREFORE, in consideration of the mutual representations, covenants and agreements contained herein, and certain other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
Article I
DEFINITIONS
1.1 Definitions.
The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth
below:
“Adverse
Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith
judgment of the principal executive officer or principal financial officer of the Company, after consultation with counsel to the
Company, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration
Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances
under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement
were not being filed, and (iii) the Company has a bona fide business purpose for not making such information public.
“Agreement”
shall have the meaning given in the Preamble.
“Board”
shall mean the Board of Directors of the Company.
“Business
Combination” shall mean any merger, share exchange, asset acquisition, share purchase, reorganization or other similar
business combination with one or more businesses, involving the Company.
“Commission”
shall mean the U.S. Securities and Exchange Commission.
“Company”
shall have the meaning given in the Preamble.
“Demand
Registration” shall have the meaning given in subsection 2.1.1.
“Demanding
Holder” shall have the meaning given in subsection 2.1.1.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Form S-1”
shall have the meaning given in subsection 2.1.1.
“Form S-3”
shall have the meaning given in subsection 2.3.1.
“Founder
Shares” shall mean the Class B Ordinary Shares and shall be deemed to include the Ordinary Shares issuable upon
conversion thereof.
“Founder
Shares Lock-up Period” shall mean, with respect to the Founder Shares, the period ending on the earlier of(A) one
year after the completion of the Company’s initial Business Combination and (B) subsequent to the Company’s initial
Business Combination, (x) if the last reported sales price of the Ordinary Shares equals or exceeds $12.00 per share (as adjusted
for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any twenty (20) trading days within
any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination or (y) the date
on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results
in all of the Company’s shareholders having the right to exchange their Ordinary Shares for cash, securities or other property.
“Holders”
shall have the meaning given in the Preamble.
“Insider
Letter” shall mean that certain letter agreement, dated as of the date hereof, by and among the Company, the Sponsor
and each of the Company’s officers, directors and director nominees.
“Maximum
Number of Securities” shall have the meaning given in subsection 2.1.4.
“Misstatement”
shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration
Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the case of a Prospectus,
in the light of the circumstances under which they were made) not misleading.
“Nominee”
is defined in Section 6.1.
“Ordinary
Shares” shall have the meaning given in the Recitals hereto.
“Permitted
Transferees” shall mean a person or entity to whom a Holder of Registrable Securities is permitted to transfer such
Registrable Securities prior to the expiration of the Founder Shares Lock-up Period or Private Placement Lock-up Period, as the
case may be, under the Insider Letter, the Private Placement Share Purchase Agreement and any other applicable agreement between
such Holder and the Company, and to any transferee thereafter.
“Piggyback
Registration” shall have the meaning given in subsection 2.2.1.
“Prospectus”
shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as
amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Pro Rata”
shall have the meaning given in subsection 2.1.4.
“Registrable
Security” shall mean (a) the Founder Shares (including any Ordinary Shares or other equivalent equity
security issued or issuable upon the conversion of any such Founder Shares or exercisable for Ordinary Shares), (b) the
Private Placement Shares, (c) the Working Capital Shares, (d) any outstanding Ordinary Shares or any other equity
security (including the Ordinary Shares issued or issuable upon the exercise of any other equity security) of the Company
held by a Holder as of the date of this Agreement, and (e) any other equity security of the Company issued or issuable
with respect to any such Ordinary Shares by way of a share capitalization or share split or in connection with a combination
of shares, recapitalization, merger, consolidation or reorganization; provided, however, that, as to any
particular Registrable Security, such securities shall cease to be Registrable Securities when: (i) a Registration
Statement with respect to the sale of such securities shall have become effective under the Securities Act and such
securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement;
(ii) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend
restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities
shall not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; or
(iv) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other
public securities transaction.
“Registration”
shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the
requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration
statement becoming effective.
“Registration
Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:
(A) all
registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory
Authority, Inc.) and any securities exchange on which the Ordinary Shares are then listed;
(B) fees
and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriter
or Underwriters in connection with blue sky qualifications of Registrable Securities);
(C) printing,
messenger, telephone and delivery expenses;
(D) reasonable
fees and disbursements of counsel for the Company;
(E) reasonable
fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with
such Registration; and
(F) reasonable
fees and expenses of one (1) legal counsel selected by the majority-in-interest of the Demanding Holders initiating a Demand
Registration to be registered for offer and sale in the applicable Registration or the Takedown Requesting Holder initiating an
Underwritten Shelf Takedown.
“Registration
Statement” shall mean any registration statement that covers the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments)and
supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration
statement.
“Requesting
Holder” shall have the meaning given in subsection 2.1.1.
“Securities
Act” shall mean the Securities Act of 1933, as amended from time to time.
“Shelf”
shall have the meaning given in subsection 2.3.1.
“Sponsor”
shall have the meaning given in the Recitals hereto.
“Sponsor
Director” means an individual elected to the Board that has been nominated by the Sponsor pursuant to this Agreement.
“Subsequent
Shelf Registration” shall have the meaning given in subsection 2.3.2.
“Takedown
Requesting Holder” shall have the meaning given in subsection 2.3.3.
“Underwriter”
shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part
of such dealer’s market-making activities.
“Underwritten
Registration” or “Underwritten Offering” shall mean a Registration in which securities
of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
“Underwritten
Shelf Takedown” shall have the meaning given in subsection 2.3.3.
“Working
Capital Shares” shall have the meaning given in the Recitals hereto.
Article II
REGISTRATIONS
2.1 Demand
Registration.
2.1.1 Request
for Registration. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, at any time
and from time to time on or after the date the Company consummates the initial Business Combination, the Holders of at least a
majority in interest of the then-outstanding number of Registrable Securities (the “Demanding Holders”)
may make a written demand for Registration under the Securities Act of all or part of their Registrable Securities, which written
demand shall describe the amount and type of securities to be included in such Registration and the intended method(s) of
distribution thereof (such written demand a “Demand Registration”). The Company shall, within five (5) days
of the Company’s receipt of the Demand Registration, notify, in writing, all other Holders of Registrable Securities of such
demand, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable
Securities in a Registration pursuant to a Demand Registration (each such Holder that includes all or a portion of such Holder’s
Registrable Securities in such Registration, a “Requesting Holder”) shall so notify the Company, in writing,
within three (3) business days after the receipt by the Holder of the notice from the Company. Upon receipt by the Company
of any such written notification from a Requesting Holder(s) to the Company, such Requesting Holder(s) shall be entitled
to have their Registrable Securities included in a Registration pursuant to a Demand Registration and the Company shall effect,
as soon thereafter as practicable, but not more than forty five (45) days immediately after the Company’s receipt of the
Demand Registration, the Registration of all Registrable Securities requested by the Demanding Holders and Requesting Holders pursuant
to such Demand Registration. Under no circumstances shall the Company be obligated to effect more than an aggregate of three (3) Registrations
pursuant to a Demand Registration under this subsection 2.1.1 with respect to any or all Registrable Securities; provided,
however, that a Registration shall not be counted for such purposes unless a Form S-1 or any similar long-form registration
statement that may be available at such time (“Form S-1”) has become effective and all of the Registrable
Securities requested by the Requesting Holders to be registered on behalf of the Requesting Holders in such Registration on Form S-1
have been sold, in accordance with Section 3.1 of this Agreement; provided, further, that an Underwritten
Shelf Takedown shall not count as a Demand Registration.
2.1.2 Effective
Registration. Notwithstanding the provisions of subsection 2.1.1 above or any other part of this Agreement, a
Registration pursuant to a Demand Registration shall not count as a Registration unless and until (i) the Registration Statement
filed with the Commission with respect to a Registration pursuant to a Demand Registration has been declared effective by the Commission
and (ii) the Company has complied with all of its obligations under this Agreement with respect thereto; provided,
further, that if, after such Registration Statement has been declared effective, an offering of Registrable Securities in
a Registration pursuant to a Demand Registration is subsequently interfered with by any stop order or injunction of the Commission,
federal or state court or any other governmental agency the Registration Statement with respect to such Registration shall be deemed
not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise
terminated and (ii) a majority-in-interest of the Demanding Holders initiating such Demand Registration thereafter affirmatively
elect to continue with such Registration and accordingly notify the Company in writing, but in no event later than five (5) days,
of such election; provided, further, that the Company shall not be obligated or required to file another Registration
Statement until the Registration Statement that has been previously filed with respect to a Registration pursuant to a Demand Registration
becomes effective or is subsequently terminated.
2.1.3 Underwritten
Offering. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, if a majority-in-interest
of the Demanding Holders so advise the Company as part of their Demand Registration that the offering of the Registrable Securities
pursuant to such Demand Registration shall be in the form of an Underwritten Offering, then the right of such Demanding Holder
or Requesting Holder (if any) to include its Registrable Securities in such Registration shall be conditioned upon such Holder’s
participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in such Underwritten
Offering to the extent provided herein. All such Holders proposing to distribute their Registrable Securities through an Underwritten
Offering under this subsection 2.1.3 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected
for such Underwritten Offering by the majority-in-interest of the Demanding Holders initiating the Demand Registration.
2.1.4 Reduction
of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Registration pursuant to a Demand
Registration, in good faith, advises the Company, the Demanding Holders and the Requesting Holders (if any) in writing that the
dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell,
taken together with all other Ordinary Shares or other equity securities that the Company desires to sell and the Ordinary Shares,
if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights held
by any other shareholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can
be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method,
or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable,
the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, as
follows: (i) first, the Registrable Securities of the Demanding Holders and the Requesting Holders (if any) (pro rata based
on the respective number of Registrable Securities that each Demanding Holder and Requesting Holder (if any) has requested be included
in such Underwritten Registration and the aggregate number of Registrable Securities that the Demanding Holders and Requesting
Holders have requested be included in such Underwritten Registration (such proportion is referred to herein as “Pro
Rata”)) that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that
the Maximum Number of Securities has not been reached under the foregoing clause (i), the Ordinary Shares or other equity securities
that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iii) third, to
the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the Ordinary
Shares or other equity securities of other persons or entities that the Company is obligated to register in a Registration pursuant
to separate written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Securities.
2.1.5 Demand
Registration Withdrawal. A majority-in-interest of the Demanding Holders initiating a Demand Registration or a majority-in-interest
of the Requesting Holders (if any), pursuant to a Registration under subsection 2.1.1 shall have the right to withdraw from
a Registration pursuant to such Demand Registration for any or no reason whatsoever upon written notification to the Company and
the Underwriter or Underwriters (if any) of their intention to withdraw from such Registration prior to the effectiveness of the
Registration Statement filed with the Commission with respect to the Registration of their Registrable Securities pursuant to such
Demand Registration. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration
Expenses incurred in connection with a Registration pursuant to a Demand Registration prior to its withdrawal under this subsection
2.1.5.
2.2 Piggyback
Registration.
2.2.1 Piggyback
Rights. If, at any time on or after the date the Company consummates a Business Combination, the Company proposes to
file a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other
obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of shareholders
of the Company (or by the Company and by the shareholders of the Company including, without limitation, pursuant to Section 2.1
hereof), other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan,
(ii) for an exchange offer or offering of securities solely to the Company’s existing shareholders,(iii) for an
offering of debt that is convertible into equity securities of the Company or (iv) for a dividend reinvestment plan, then
the Company shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable
but not less than seven (7) days before the anticipated filing date of such Registration Statement, which notice shall (A) describe
the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of
the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable
Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing
within three (3) business days after receipt of such written notice (such Registration a “Piggyback Registration”).
The Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use
its best efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable
Securities requested by the Holders pursuant to this subsection 2.2.1 to be included in a Piggyback Registration on the
same terms and conditions as any similar securities of the Company included in such Registration and to permit the sale or other
disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All such Holders
proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.2.1 shall
enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by
the Company. The notice periods set forth in this subsection 2.2.1 shall not apply to an Underwritten Shelf Takedown conducted
in accordance with subsection 2.3.3.
2.2.2 Reduction
of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Registration that is
to be a Piggyback Registration (other than Underwritten Shelf Takedown), in good faith, advises the Company and the Holders of
Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of the Ordinary
Shares that the Company desires to sell, taken together with (i) the Ordinary Shares, if any, as to which Registration has
been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable
Securities hereunder, (ii) the Registrable Securities as to which registration has been requested pursuant Section 2.2
hereof, and (iii) the Ordinary Shares, if any, as to which Registration has been requested pursuant to separate written
contractual piggy-back registration rights of other shareholders of the Company, exceeds the Maximum Number of Securities, then:
(a) If
the Registration is undertaken for the Company’s account, the Company shall include in any such Registration (A) first,
the Ordinary Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum
Number of Securities; and (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing
clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to
subsection 2.2.1 hereof, Pro Rata based on the respective number of Registrable Securities that each Holder has so requested
exercising its rights to register its Registrable Securities pursuant to subsection 2.2.1 hereof, which can be sold without
exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities has not been
reached under the foregoing clauses (A) and (B), the Ordinary Shares, if any, as to which Registration has been requested
pursuant to written contractual piggy-back registration rights of other shareholders of the Company, which can be sold without
exceeding the Maximum Number of Securities;
(b) If
the Registration is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company
shall include in any such Registration (A) first, the Ordinary Shares or other equity securities, if any, of such requesting
persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of
Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause(A),
the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection
2.2.1, Pro Rata, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the
Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Ordinary Shares or other equity
securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and(D) fourth,
to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and(C), the
Ordinary Shares or other equity securities for the account of other persons or entities that the Company is obligated to register
pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum
Number of Securities.
2.2.3 Piggyback
Registration Withdrawal. Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration
for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her
or its intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement filed with
the Commission with respect to such Piggyback Registration. The Company (whether on its own good faith determination or as the
result of a request for withdrawal by persons pursuant to separate written contractual obligations)may withdraw a Registration
Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such
Registration Statement. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration
Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this subsection 2.2.3.
2.2.4 Unlimited
Piggyback Registration Rights. For purposes of clarity, any Registration effected pursuant to Section 2.2
hereof shall not be counted as a Registration pursuant to a Demand Registration effected under Section 2.1 hereof.
2.3 Shelf
Registrations.
2.3.1 The
Holders of Registrable Securities may at any time, and from time to time, request in writing that the Company, pursuant to Rule 415
under the Securities Act (or any successor rule promulgated thereafter by the Commission), register the resale of any or all
of their Registrable Securities on Form S-3 or similar short form registration statement that may be available at such time
(“Form S-3”), or if the Company is ineligible to use Form S-3, on Form S-1; a registration
statement filed pursuant to this subsection 2.3.1 (a “Shelf”) shall provide for the resale of
the Registrable Securities included therein pursuant to any method or combination of methods legally available to, and requested
by, any Holder. Within three (3) days of the Company’s receipt of a written request from a Holder or Holders of Registrable
Securities for a Registration on a Shelf, the Company shall promptly give written notice of the proposed Registration to all other
Holders of Registrable Securities, and each Holder of Registrable Securities who thereafter wishes to include all or a portion
of such Holder’s Registrable Securities in such Registration shall so notify the Company, in writing, within three (3) business
days after the receipt by the Holder of the notice from the Company. As soon as practicable thereafter, but not more than ten (10) days
after the Company’s initial receipt of such written request for a Registration on a Shelf, the Company shall register all
or such portion of such Holder’s Registrable Securities as are specified in such written request, together with all or such
portion of Registrable Securities of any other Holder or Holders joining in such request as are specified in the written notification
given by such Holder or Holders; provided, however, that the Company shall not be obligated to effect any such Registration pursuant
to this subsection 2.3.1 if the Holders of Registrable Securities, together with the Holders of any other equity securities
of the Company entitled to inclusion in such Registration, propose to sell the Registrable Securities and such other equity securities
(if any) at any aggregate price to the public of less than $10,000,000. The Company shall maintain each Shelf in accordance with
the terms hereof, and shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements
as may be necessary to keep such Shelf continuously effective, available for use and in compliance with the provisions of the Securities
Act until such time as there are no longer any Registrable Securities included on such Shelf. In the event the Company files a
Shelf on Form S-1, the Company shall use its commercially reasonable efforts to convert the Form S-1 to a Form S-3
as soon as practicable after the Company is eligible to use Form S-3.
2.3.2 If
any Shelf ceases to be effective under the Securities Act for any reason at any time while Registrable Securities included thereon
are still outstanding, the Company shall use its commercially reasonable efforts to as promptly as is reasonably practicable cause
such Shelf to again become effective under the Securities Act (including obtaining the prompt withdrawal of any order suspending
the effectiveness of such Shelf), and shall use its commercially reasonable efforts to as promptly as is reasonably practicable
amend such Shelf in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such
Shelf or file an additional registration statement (a “Subsequent Shelf Registration”) registering the
resale of all Registrable Securities including on such Shelf, and pursuant to any method or combination of methods legally available
to, and requested by, any Holder. If a Subsequent Shelf Registration is filed, the Company shall use its commercially reasonable
efforts to (i) cause such Subsequent Shelf Registration to become effective under the Securities Act as promptly as is reasonably
practicable after the filing thereof and (ii) keep such Subsequent Shelf Registration continuously effective, available for
use and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities
included thereon. Any such Subsequent Shelf Registration shall be on Form S-3 to the extent that the Company is eligible to
use such form. Otherwise, such Subsequent Shelf Registration shall be on another appropriate form. In the event that any Holder
holds Registrable Securities that are not registered for resale on a delayed or continuous basis, the Company, upon request of
a Holder shall promptly use its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered
by either, at the Company’s option, a Shelf (including by means of a post-effective amendment) or a Subsequent Shelf Registration
and cause the same to become effective as soon as practicable after such filing and such Shelf or Subsequent Shelf Registration
shall be subject to the terms hereof; provided, however, the Company shall only be required to cause such Registrable
Securities to be so covered once annually after inquiry of the Holders.
2.3.3 At
any time and from time to time after a Shelf has been declared effective by the Commission, the Sponsor may request to sell all
or any portion of its Registrable Securities in an underwritten offering that is registered pursuant to the Shelf (each, an “Underwritten
Shelf Takedown”); provided that the Company shall only be obligated to effect an Underwritten Shelf Takedown
if such offering shall include securities with a total offering price (including piggyback securities and before deduction of underwriting
discounts) reasonably expected to exceed, in the aggregate, $10,000,000. All requests for Underwritten Shelf Takedowns shall be
made by giving written notice to the Company at least 48 hours prior to the public announcement of such Underwritten Shelf Takedown,
which shall specify the approximate number of Registrable Securities proposed to be sold in the Underwritten Shelf Takedown and
the expected price range (net of underwriting discounts and commissions) of such Underwritten Shelf Takedown. The Company shall
include in any Underwritten Shelf Takedown the securities requested to be included by any holder (each a “Takedown
Requesting Holder”) at least 24 hours prior to the public announcement of such Underwritten Shelf Takedown pursuant
to written contractual piggyback registration rights of such holder (including to those set forth herein). The Sponsor and the
Takedown Requesting Holders (if any) shall have the right to select the underwriter(s) for such offering (which shall consist
of one or more reputable nationally recognized investment banks), subject to the Company’s prior approval which shall not
be unreasonably withheld, conditioned or delayed. For purposes of clarity, any Registration effected pursuant to this subsection
2.3.3 shall not be counted as a Registration pursuant to a Demand Registration effected under Section 2.1 hereof.
2.3.4 If
the managing Underwriter or Underwriters in an Underwritten Shelf Takedown, in good faith, advises the Company, the Sponsor and
the Takedown Requesting Holders (if any) in writing that the dollar amount or number of Registrable Securities that the Sponsor
and the Takedown Requesting Holders (if any) desire to sell, taken together with all other Ordinary Shares or other equity securities
that the Company desires to sell, exceeds the Maximum Number of Securities, then the Company shall include in such Underwritten
Shelf Takedown, as follows: (i) first, the Registrable Securities of the Sponsor that can be sold without exceeding the Maximum
Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing
clause (i), the Ordinary Shares or other equity securities that the Company desires to sell, which can be sold without exceeding
the Maximum Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has not been reached
under the foregoing clauses (i) and (ii), the Ordinary Shares or other equity securities of the Takedown Requesting Holders,
if any, that can be sold without exceeding the Maximum Number of Securities, determined Pro Rata based on the respective number
of Registrable Securities that each Takedown Requesting Holder has so requested to be included in such Underwritten Shelf Takedown.
2.3.5 The
Sponsor and the Takedown Requesting Holders (if any) shall have the right to withdraw from an Underwritten Shelf Takedown for any
or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of its intention
to withdraw from such Underwritten Shelf Takedown prior to the public announcement of such Underwritten Shelf Takedown. Notwithstanding
anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection
with an Underwritten Shelf Takedown prior to a withdrawal under this subsection 2.3.5.
2.4 Restrictions
on Registration Rights. If (A) during the period starting with the date sixty (60) days prior to the Company’s
good faith estimate of the date of the filing of, and ending on a date one hundred and twenty (120) days after the effective date
of, a Company initiated Registration and provided that the Company has delivered written notice to the Holders prior to receipt
of a Demand Registration pursuant to subsection 2.1.1 and it continues to actively employ, in good faith, all reasonable efforts
to cause the applicable Registration Statement to become effective; (B) the Holders have requested an Underwritten Registration
and the Company and the Holders are unable to obtain the commitment of underwriters to firmly underwrite the offer; or (C) in
the good faith judgment of the Board such Registration would be seriously detrimental to the Company and the Board concludes as
a result that it is essential to defer the filing of such Registration Statement at such time, then in each case the Company shall
furnish to such Holders a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board
it would be seriously detrimental to the Company for such Registration Statement to be filed in the near future and that it is
therefore essential to defer the filing of such Registration Statement. In such event, the Company shall have the right to defer
such filing for a period of not more than thirty (30) days; provided, however, that the Company shall not defer its obligation
in this manner more than once in any 12-month period. Notwithstanding anything to the contrary contained in this Agreement, the
Company shall not be required to effect or permit any Registration or cause any Registration Statement to become effective, with
respect to any Registrable Securities held by any Holder, until after the expiration of the Founder Shares Lock-Up Period or the
Private Placement Lock-up Period, as the case may be.
Article III
COMPANY PROCEDURES
3.1 General
Procedures. If at any time on or after the date the Company consummates an initial Business Combination the Company
is required to effect the Registration of Registrable Securities, the Company shall use its best efforts to effect such Registration
to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto
the Company shall, as expeditiously as possible:
3.1.1 prepare
and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use
its reasonable best efforts to cause such Registration Statement to become effective and remain effective until all Registrable
Securities covered by such Registration Statement have been sold;
3.1.2 prepare
and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements
to the Prospectus, as may be requested by the Holders or any Underwriter of Registrable Securities or as may be required by the
rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and
regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration
Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement
to the Prospectus;
3.1.3 prior
to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriter
or Underwriters, if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal
counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement(in
each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration
Statement (including each preliminary Prospectus), and such other documents as the Underwriter or Underwriters, if any, and the
Holders of Registrable Securities included in such Registration or the legal counsel for any such Holders may request in order
to facilitate the disposition of the Registrable Securities owned by such Holders;
3.1.4 prior
to any public offering of Registrable Securities, use its best efforts to (i) register or qualify the Registrable Securities
covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United
States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution)
may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement
to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations
of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable
Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions;
provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process
or taxation in any such jurisdiction where it is not then otherwise so subject;
3.1.5 cause
all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities
issued by the Company are then listed;
3.1.6 provide
a transfer agent and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;
3.1.7 advise
each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance
of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening
of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued;
3.1.8 at
least five (5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such
Registration Statement or Prospectus (other than by way of a document incorporated by reference) furnish a copy thereof to each
seller of such Registrable Securities or its counsel;
3.1.9 notify
the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities
Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect,
includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;
3.1.10 permit
a representative of the Holders, the Underwriter or Underwriters, if any, and any attorney or accountant retained by such Holders
or Underwriter to participate, at each such person’s own expense, in the preparation of the Registration Statement, and cause
the Company’s officers, directors and employees to supply all information reasonably requested by any such representative,
Underwriter, attorney or accountant in connection with the Registration; provided, however, that such representatives
or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory to the Company, prior to
the release or disclosure of any such information;
3.1.11 obtain
a “cold comfort” letter from the Company’s independent registered public accountants in the event of an Underwritten
Registration, in customary form and covering such matters of the type customarily covered by “cold comfort” letters
as the managing Underwriter may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating
Holders;
3.1.12 on
the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion, dated such date, of
counsel representing the Company for the purposes of such Registration, addressed to the Holders, the placement agent or sales
agent, if any, and the Underwriter or Underwriters, if any, covering such legal matters with respect to the Registration in respect
of which such opinion is being given as the Holders, placement agent, sales agent, or Underwriter may reasonably request and as
are customarily included in such opinions and negative assurance letters, and reasonably satisfactory to a majority in interest
of the participating Holders;
3.1.13 in
the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary
form, with the managing Underwriter of such offering;
3.1.14 make
available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve
(12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration
Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any
successor rule promulgated thereafter by the Commission);
3.1.15 if
the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $50,000,000, use its
reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations
that may be reasonably requested by the Underwriter in any Underwritten Offering; and
3.1.16 otherwise,
in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection
with such Registration.
3.2 Registration
Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the
Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’
commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration
Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
3.3 Requirements
for Participation in Underwritten Offerings. No person may participate in any Underwritten Offering for equity securities
of the Company pursuant to a Registration initiated by the Company hereunder unless such person (i) agrees to sell such person’s
securities on the basis provided in any underwriting arrangements approved by the Company and (ii) completes and executes
all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary
documents as may be reasonably required under the terms of such underwriting arrangements.
3.4 Suspension
of Sales; Adverse Disclosure. Upon receipt of written notice from the Company that a Registration Statement or Prospectus
contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until he, she or
it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that the Company
hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice),or until
he, she or it is advised in writing by the Company that the use of the Prospectus may be resumed. If the filing, initial effectiveness
or continued use of a Registration Statement in respect of any Registration at any time would require the Company to make an Adverse
Disclosure or would require the inclusion in such Registration Statement of financial statements that are unavailable to the Company
for reasons beyond the Company’s control, the Company may, upon giving prompt written notice of such action to the Holders,
delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time, but
in no event more than thirty (30) days, determined in good faith by the Company to be necessary for such purpose. In the event
the Company exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of
the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to
sell Registrable Securities. The Company shall immediately notify the Holders of the expiration of any period during which it exercised
its rights under this Section 3.4.
3.5 Reporting
Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be
a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or
15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings. The Company
further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from
time to time to enable such Holder to sell Ordinary Shares held by such Holder without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated
thereafter by the Commission, to the extent that such rule or such successor rule is available to the Company), including
providing any legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder a written certification
of a duly authorized officer as to whether it has complied with such requirements.
Article IV
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 The
Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers and directors
and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities
and expenses (including attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any
Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except
insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly
for use therein. The Company shall indemnify the Underwriter or Underwriters, their officers and directors and each person who
controls such Underwriter(s) (within the meaning of the Securities Act) to the same extent as provided in the foregoing with
respect to the indemnification of the Holder.
4.1.2 In
connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish
to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such
Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify the Company, its directors and officers
and agents and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses (including without limitation reasonable attorneys’ fees) resulting from any untrue or alleged untrue
statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof
or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information
or affidavit so furnished in writing by such Holder expressly for use therein; provided, however, that the obligation
to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such
Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale
of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriter
or Underwriters, their officers, directors and each person who controls such Underwriter(s) (within the meaning of the Securities
Act) to the same extent as provided in the foregoing with respect to indemnification of the Company.
4.1.3 Any
person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with
respect to which he, she or it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s
right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless
in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties
may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability
for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees
and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless
in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other
of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party,
consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money
(and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation.
4.1.4 The
indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by
or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive
the transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make
such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s
or such Holder’s indemnification is unavailable for any reason.
4.1.5 If
the indemnification provided under Section 4.1 hereof from the indemnifying party is unavailable or insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then
the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified
party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the
indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct
or prevent such action; provided, however, that the liability of any Holder under this subsection 4.1.5 shall
be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount
paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject
to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees, charges
or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that
it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined by pro rata allocation
or by any other method of allocation, which does not take account of the equitable considerations referred to in this subsection
4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of such fraudulent
misrepresentation.
Article V
SHAREHOLDER RIGHTS
Subject to the terms
and conditions of this Agreement, at any time and from time to time on or after the date that the Company consummates an initial
Business Combination and for so long as the Sponsor holds any Registrable Securities:
5.1.1 The
Sponsor shall have the right, but not the obligation, to designate three individuals to be appointed or nominated, as the case
may be, for election to the Board (including any successor, each, a “Nominee”) by giving written notice
to the Company on or before the time such information is reasonably requested by the Board or the Nominating Committee of the Board,
as applicable, for inclusion in a proxy statement for a meeting of shareholders provided to the Sponsor.
5.1.2 The
Company will, as promptly as practicable, use its best efforts to take all necessary and desirable actions (including, without
limitation, calling special meetings of the Board and the shareholders and recommending, supporting and soliciting proxies) so
that there are three Sponsor Directors serving on the Board at all times.
5.1.3 The
Company shall, to the fullest extent permitted by applicable law, use its best efforts to take all actions necessary to ensure
that: (i) each Nominee is included in the Board’s slate of nominees to the shareholders of the Company for each election
of Directors; and (ii) each Nominee is included in the proxy statement prepared by management of the Company in connection
with soliciting proxies for every meeting of the shareholders of the Company called with respect to the election of members of
the Board, and at every adjournment or postponement thereof, and on every action or approval by written consent of the shareholders
of the Company or the Board with respect to the election of members of the Board.
5.1.4 If
a vacancy occurs because of the death, disability, disqualification, resignation, or removal of a Sponsor Director or for any other
reason, the Sponsor shall be entitled to designate such person’s successor, and the Company will, as promptly as practicable
following such designation, use its best efforts to take all necessary and desirable actions, to the fullest extent permitted by
law, within its control such that such vacancy shall be filled with such successor Nominee.
5.1.5 If
a Nominee is not elected because of such Nominee’s death, disability, disqualification, withdrawal as a nominee or for any
other reason, the Sponsor shall be entitled to designate promptly another Nominee and the Company will take all necessary and desirable
actions within its control such that the director position for which such Nominee was nominated shall not be filled pending such
designation or the size of the Board shall be increased by one and such vacancy shall be filled with such successor Nominee as
promptly as practicable following such designation.
5.1.6 As
promptly as reasonably practicable following the request of any Sponsor Director, the Company shall enter into an indemnification
agreement with such Sponsor Director, in the form entered into with the other members of the Board. The Company shall pay the reasonable,
documented out-of-pocket expenses incurred by the Sponsor Director in connection with his or her services provided to or on behalf
of the Company, including attending meetings or events attended explicitly on behalf of the Company at the Company’s request.
5.1.7 The
Company shall (i) purchase directors’ and officers’ liability insurance in an amount determined by the Board to
be reasonable and customary and (ii) for so long as a Sponsor Director serves as a Director of the Company, maintain such
coverage with respect to such Sponsor Director; provided that upon removal or resignation of such Sponsor Director for any
reason, the Company shall take all actions reasonably necessary to extend such directors’ and officers’ liability insurance
coverage for a period of not less than six (6) years from any such event in respect of any act or omission occurring at or
prior to such event.
5.1.8 For
so long as a Sponsor Director serves on the Board, the Company shall not amend, alter or repeal any right to indemnification or
exculpation covering or benefiting any Sponsor Director nominated pursuant to this Agreement as and to the extent consistent with
applicable law, whether such right is contained in the Company’s amended and restated memorandum and articles of association,
each as amended, or another document (except to the extent such amendment or alteration permits the Company to provide broader
indemnification or exculpation rights on a retroactive basis than permitted prior thereto).
5.1.9 Each
Nominee may, but does not need to qualify as “independent” pursuant to listing standards of the Nasdaq Capital Market
(or such other national securities exchange upon which the Company’s securities are then listed).
5.1.10 Any
Nominee will be subject to the Company’s customary due diligence process, including its review of a completed questionnaire
and a background check. Based on the foregoing, the Company may object to any Nominee provided (a) it does so in good faith,
and (b) such objection is based upon any of the following: (i) such Nominee was convicted in a criminal proceeding or
is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses), (ii) such Nominee
was the subject of any order, judgment, or decree not subsequently reversed, suspended or vacated of any court of competent jurisdiction,
permanently or temporarily enjoining such proposed director from, or otherwise limiting, the following activities: (A) engaging
in any type of business practice, or (B) engaging in any activity in connection with the purchase or sale of any security
or in connection with any violation of federal or state securities laws, (iii) such Nominee was the subject of any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise
limiting for more than sixty (60)days the right of such person to engage in any activity described in clause (ii)(B), or to be
associated with persons engaged in such activity, (iv) such proposed director was found by a court of competent jurisdiction
in a civil action or by the Commission to have violated any federal or state securities law, and the judgment in such civil action
or finding by the Commission has not been subsequently reversed, suspended or vacated, or (v) such proposed director was the
subject of, or a party to any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated, relating to a violation of any federal or state securities laws or regulations. In the event the
Board reasonably finds the Nominee to be unsuitable based upon one or more of the foregoing clauses (i) through (v) and
reasonably objects to the identified director, Sponsor shall be entitled to propose a different Nominee to the Board within thirty
(30) calendar days of the Company’s notice to Sponsor of its objection to the Nominee and such replacement Nominee shall
be subject to the review process outlined above.
5.1.11 The
Company shall take all necessary action to cause a Nominee chosen by the Sponsor, at the request of such Nominee to be elected
to the board of directors (or similar governing body) of each material operating subsidiary of the Company. The Nominee, as applicable,
shall have the right to attend (in person or remotely) any meetings of the board of directors (or similar governing body or committee
thereof) of each subsidiary of the Company.
Article VI
MISCELLANEOUS
6.1 Notices.
Any notice or communication under this Agreement must be in writing and given by (i) deposit in the United States mail, addressed
to the party to be notified, postage prepaid and registered or certified with return receipt requested, (ii) delivery in person
or by courier service providing evidence of delivery, or (iii) transmission by hand delivery, electronic mail, telecopy, telegram
or facsimile. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed
sufficiently given, served, sent, and received, in the case of mailed notices, on the third business day following the date on
which it is mailed and, in the case of notices delivered by courier service, hand delivery, electronic mail, telecopy, telegram
or facsimile, at such time as it is delivered to the addressee (with the delivery receipt or the affidavit of messenger)or at such
time as delivery is refused by the addressee upon presentation. Any notice or communication under this Agreement must be addressed,
if to the Company, to: 55 Hudson Yards, 28th Floor, New York, New York 10001, Attention: Christopher Gaulin, with copies to; Kirkland &
Ellis LLP, 601 Lexington Avenue, New York, New York 10022, Attention: Christian O. Nagler and Kirkland &Ellis LLP, 609
Main Street, Houston, Texas 77007, Attention: Debbie Yee, and, if to any Holder, at such Holder’s addressor facsimile number
as set forth in the Company’s books and records. Any party may change its address for notice at any time and from time to
time by written notice to the other parties hereto, and such change of address shall become effective thirty (30) days after delivery
of such notice as provided in this Section 6.1.
6.2 Assignment;
No Third Party Beneficiaries.
6.2.1 This
Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole
or in part.
6.2.2 Prior
to the expiration of the Founder Shares Lock-up Period or the Private Placement Lock-up Period, as the case may be, no Holder may
assign or delegate such Holder’s rights, duties or obligations under this Agreement, in whole or in part, except in connection
with a transfer of Registrable Securities by such Holder to a Permitted Transferee.
6.2.3 This
Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors
and the permitted assigns of the Holders, which shall include Permitted Transferees.
6.2.4 This
Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth
in this Agreement and Section 6.2 hereof.
6.2.5 No
assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate
the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 6.1
hereof and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by
the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement).Any
transfer or assignment made other than as provided in this Section 6.2 shall be null and void.
6.3 Severability.
This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be possible that is valid and enforceable.
6.4 Counterparts.
This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed
an original, and all of which together shall constitute the same instrument, but only one of which need be produced.
6.5 Entire
Agreement. This Agreement (including all agreements entered into pursuant hereto and all certificates and instruments
delivered pursuant hereto and thereto) constitute the entire agreement of the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the
parties, whether oral or written.
6.6 Governing
Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE
PARTIES EXPRESSLY AGREE THAT THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AS APPLIED
TO AGREEMENTS AMONG NEW YORK RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN NEW YORK, WITHOUT REGARD TO THE CONFLICT
OF LAW PROVISIONS OF SUCH JURISDICTION.
6.7 WAIVER
OF TRIAL BY JURY. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION,
SUIT, COUNTERCLAIM OR OTHER PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH OR RELATING
TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE ACTIONS OF THE SPONSOR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE
OR ENFORCEMENT HEREOF.
6.8 Amendments
and Modifications. Upon the written consent of the Company and the Holders of at least a majority in interest of
the Registrable Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in
this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however,
that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects one (1) Holder, solely in
its capacity as a holder of the shares of the Company, in a manner that is materially different from the other Holders (in such
capacity) shall require the consent of the Holder so affected. No course of dealing between any Holder or the Company and any other
party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement
shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or
remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder
or thereunder by such party.
6.9 Titles
and Headings. Titles and headings of sections of this Agreement are for convenience only and shall not affect the
construction of any provision of this Agreement.
6.10 Waivers
and Extensions. Any party to this Agreement may waive any right, breach or default which such party has the right
to waive, provided that such waiver will not be effective against the waiving party unless it is in writing, is signed by such
party, and specifically refers to this Agreement. Waivers may be made in advance or after the right waived has arisen or the breach
or default waived has occurred. Any waiver may be conditional. No waiver of any breach of any agreement or provision herein contained
shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained.
No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.
6.11 Remedies
Cumulative. In the event that the Company fails to observe or perform any covenant or agreement to be observed or
performed under this Agreement, the Holders may proceed to protect and enforce its rights by suit in equity or action at law, whether
for specific performance of any term contained in this Agreement or for an injunction against the breach of any such term or in
aid of the exercise of any power granted in this Agreement or to enforce any other legal or equitable right, or to take any one
or more of such actions, without being required to post a bond. None of the rights, powers or remedies conferred under this Agreement
shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to any other right, power
or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by statute or otherwise.
6.12 Other
Registration Rights. The Company represents and warrants that no person, other than a Holder of Registrable
Securities has any right to require the Company to register any securities of the Company
for sale or to include such securities of the Company in any Registration filed by the Company for the sale of securities for its
own account or for the account of any other person. Further, the Company represents and warrants that this Agreement supersedes
any other registration rights agreement or agreement with similar terms and conditions and in the event of a conflict between any such agreement or
agreements and this Agreement, the terms of this Agreement shall prevail.
6.13 Term.
This Agreement shall terminate upon the earlier of (i) the tenth anniversary of the date of this Agreement and (ii) the
date as of which no Registrable Securities remain outstanding. The provisions of Section 3.5 and Article IV
shall survive any termination.
[SIGNATURE PAGES FOLLOW]
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
| |
COMPANY: |
| |
|
| |
HealthCor Catalio Acquisition Corp. |
| |
|
| |
By: |
|
| |
Name: |
Christine Clarke |
| |
Title: |
Chief Financial Officer |
[Signature Page to Registration
and Shareholder Rights Agreement - Exhibit 10.2]
| |
HOLDERS: |
| |
|
| |
HC SPONSOR LLC |
| |
|
| |
By: |
|
| |
Name: |
Anabelle Perez Gray |
| |
Title: |
Authorized Signatory |
[Signature Page to Registration
and Shareholder Rights Agreement - Exhibit 10.2]
| |
By: |
|
| |
Name: |
Michael Weinstein |
[Signature Page to Registration
and Shareholder Rights Agreement - Exhibit 10.2]
| |
By: |
|
| |
Name: |
Dr. Christopher Wolfgang |
[Signature Page to Registration
and Shareholder Rights Agreement - Exhibit 10.2]
Exhibit 10.3
PRIVATE PLACEMENT SHARES PURCHASE AGREEMENT
THIS PRIVATE
PLACEMENT SHARES PURCHASE AGREEMENT (as it may from time to time be amended and including all exhibits referenced herein,
this “Agreement”),dated as of [●], 2021, is entered into by and between HealthCor Catalio
Acquisition Corp., a Cayman Islands exempted company(the “Company”), and HC Sponsor LLC, a Cayman
Islands limited liability company (the “Purchaser”).
WHEREAS, the Company
intends to consummate an initial public offering (the “Public Offering”) of the Company’s Class A
ordinary shares, par value $0.0001 per share (each, a “Share”), as set forth in the Company’s Registration
Statement on Form S-1, filed with the U.S. Securities and Exchange Commission (the “SEC”), File
Number 333-252002, under the Securities Act of 1933, as amended (the “Securities Act”).
WHEREAS, the Purchaser
has agreed to purchase an aggregate of 500,000 Shares (and up to 45,000 additional Shares if the underwriter in the Public Offering
exercises its option to purchase additional Shares in full) (the “Private Placement Shares”).
NOW THEREFORE, in consideration
of the mutual promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:
AGREEMENT
Section 1. Authorization,
Purchase and Sale; Terms of the Private Placement Shares.
A. Authorization
of the Private Placement Shares. The Company has duly authorized the issuance and sale of the Private Placement Shares to the
Purchaser.
B. Purchase
and Sale of the Private Placement Shares.
(i) On
the date of the consummation of the Public Offering (the “IPO Closing Date”), the Company shall issue
and sell to the Purchaser, and the Purchaser shall purchase from the Company, 500,000 Private Placement Shares at a price of $10.00
per Private Placement Share for an aggregate purchase price of $5,000,000 (the “Purchase Price”). The
Purchaser shall pay the Purchase Price by wire transfer of immediately available funds in the following amounts: (i) $2,000,000
to the Company at a financial institution to be chosen by the Company, and (ii) $3,000,000 to the trust account (the “Trust
Account”) maintained by Continental Stock Transfer & Trust Company, acting as trustee, in each case in accordance
with the Company’s wiring instructions, at least one (1) business day prior to the IPO Closing Date. On the IPO Closing
Date, subject to the receipt of funds pursuant to the immediately prior sentence, the Company, at its option, shall deliver a certificate
evidencing the Private Placement Shares purchased by the Purchaser on such date duly registered in the Purchaser’s name to
the Purchaser or effect such delivery in book-entry form.
(ii) On
the date of any closing of the option to purchase additional Shares, if any, in connection with the Public Offering or on such
earlier time and date as may be mutually agreed by the Purchaser and the Company (each such date, an “Option Closing
Date”, and each Option Closing Date (if any) and the IPO Closing Date, a “Closing Date”),
the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company, up to 45,000 Private Placement
Shares (or, to the extent the option to purchase additional Shares is not exercised in full, a lesser number of Private Placement
Shares in proportion to portion of the option that is exercised) at a price of $10.00 per Private Placement Share for an aggregate
purchase price of up to $450,000 (the “Option Purchase Price”). The Purchaser shall pay the Option Purchase
Price in accordance with the Company’s wire instruction by wire transfer of immediately available funds to the Trust Account,
at least one (1) business day prior to any Option Closing Date. On each Option Closing Date (if any), subject to the receipt
of funds pursuant to the immediately prior sentence, the Company shall, at its option, deliver a certificate evidencing the Private
Placement Shares purchased on such date duly registered in the Purchaser’s name to the Purchaser or effect such delivery
in book-entry form.
C. Terms
of the Private Placement Shares.
(i) The
Private Placement Shares are substantially identical to the Shares to be offered in the Public Offering except that (a) the Private
Placement Shares will not, except in limited circumstances, be transferable or salable until 30 days after the completion
of the Company’s initial business combination (the “Business Combination”) so long as they are
held by the Purchaser or its permitted transferees, and (b) the Private Placement Shares are being purchased pursuant to an exemption
from the registration requirements of the Securities Act and will become freely tradable only after the expiration of the lockup
described above in clause (a) and they are registered pursuant to the Registration and Shareholder Rights Agreement (as defined
below), or an exemption from registration is available and the restrictions described above in clause (a) have expired.
(ii) On
the IPO Closing Date, the Company and the Purchaser shall enter into a registration and shareholder rights agreement (the “Registration
and Shareholder Rights Agreement”) pursuant to which the Company will grant certain registration rights to the Purchaser
relating to the Private Placement Shares.
Section 2. Representations
and Warranties of the Company. As a material inducement to the Purchaser to enter into this Agreement and purchase the
Private Placement Shares, the Company hereby represents and warrants to the Purchaser (which representations and warranties shall
survive each Closing Date) that:
A. Incorporation
and Corporate Power. The Company is an exempted company duly incorporated, validly existing and in good standing under the
laws of the Cayman Islands and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably
be expected to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company
possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement.
B. Authorization;
No Breach.
(i) The
execution, delivery and performance of this Agreement and the Private Placement Shares have been duly authorized by the Company
as of the Date hereof. This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability
relating to or affecting creditors’ rights and to general equitable principles (whether considered in a proceeding in equity
or law). Upon issuance in accordance with, and payment pursuant to, the terms of this Agreement, the Private Placement Shares will
constitute valid and binding obligations of the Company, enforceable in accordance with their terms as of the Closing Date.
(ii) The
execution and delivery by the Company of this Agreement and the Private Placement Shares, the issuance and sale of the Private
Placement Shares and the fulfillment of and compliance with the respective terms hereof and thereof by the Company, do not and
will not as of each Closing Date (a) conflict with or result in a breach of the terms, conditions or provisions of, (b) constitute
a default under, (c) result in the creation of any lien, security interest, charge or encumbrance upon the Company’s
share capital or assets under, (d) result in a violation of, or (e) require any authorization, consent, approval, exemption
or other action by or notice or declaration to, or filing with, any court or administrative or governmental body or agency pursuant
to the amended and restated memorandum and articles of association of the Company (in effect on the date hereof or as may be amended
prior to completion of the contemplated Public Offering) or any material law, statute, rule or regulation to which the Company
is subject, or any agreement, order, judgment or decree to which the Company is subject, except for any filings required after
the date hereof under federal or state securities laws.
C. Title
to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof and upon registration in the Company’s
register of members, the Private Placement Shares will be duly and validly issued, fully paid and non-assessable. Upon issuance
in accordance with, and payment pursuant to, the terms hereof and upon registration in the Company’s register of members,
the Purchaser will have good title to the Private Placement Shares purchased by it, free and clear of all liens, claims and encumbrances
of any kind, other than (i) transfer restrictions hereunder and under the other agreements contemplated hereby, (ii) transfer
restrictions under federal and state securities laws, and (iii) liens, claims or encumbrances imposed due to the actions of
the Purchaser.
D. Governmental
Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is
required in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by the
Company of any other transactions contemplated hereby.
E. Regulation
D Qualification. Neither the Company nor, to its actual knowledge, any of its affiliates, members, officers, directors or beneficial
shareholders of 20% or more of its outstanding securities, has experienced a disqualifying event as enumerated pursuant to Rule 506(d) of
Regulation D under the Securities Act.
Section 3. Representations
and Warranties of the Purchaser. As a material inducement to the Company to enter into this Agreement and issue and
sell the Private Placement Shares to the Purchaser, the Purchaser hereby represents and warrants to the Company (which representations
and warranties shall survive each Closing Date) that:
A. Organization
and Requisite Authority. The Purchaser possesses all requisite power and authority necessary to carry out the transactions
contemplated by this Agreement.
B. Authorization;
No Breach.
(i) This
Agreement constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting
creditors’ rights and to general equitable principles (whether considered in a proceeding in equity or law).
(ii) The
execution and delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchaser
does not and shall not as of each Closing Date (a) conflict with or result in a breach by the Purchaser of the terms, conditions
or provisions of, (b) constitute a default under, (c) result in the creation of any lien, security interest, charge or
encumbrance upon the Purchaser’s equity or assets under, (d) result in a violation of, or (e) require authorization,
consent, approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative or governmental
body or agency pursuant to the Purchaser’s organizational documents in effect on the date hereof or as may be amended prior
to completion of the contemplated Public Offering, or any material law, statute, rule or regulation to which the Purchaser
is subject, or any agreement, instrument, order, judgment or decree to which the Purchaser is subject, except for any filings required
after the date hereof under federal or state securities laws.
C. Investment
Representations.
(i) The
Purchaser is acquiring the Private Placement Shares for its own account, for investment purposes only and not with a view towards,
or for resale in connection with, any public sale or distribution thereof.
(ii) The
Purchaser is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation
D under the Securities Act, and the Purchaser has not experienced a disqualifying event as enumerated pursuant to Rule 506(d) of
Regulation D under the Securities Act.
(iii) The
Purchaser understands that the Private Placement Shares are being offered and will be sold to it in reliance on specific exemptions
from the registration requirements of the United States federal and state securities laws and that the Company is relying upon
the truth and accuracy of, and the Purchaser’s compliance with, the representations and warranties of the Purchaser set forth
herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire such Private Placement
Shares.
(iv) The
Purchaser did not decide to enter into this Agreement as a result of any general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D under the Securities Act.
(v) The
Purchaser has been furnished with all materials relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Private Placement Shares which have been requested by the Purchaser. The Purchaser has been
afforded the opportunity to ask questions of the executive officers and directors of the Company. The Purchaser understands that
its investment in the Private Placement Shares involves a high degree of risk and it has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment decision with respect to the acquisition of the Private Placement
Shares.
(vi) The
Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on
or made any recommendation or endorsement of the Private Placement Shares or the fairness or suitability of the investment in the
Private Placement Shares by the Purchaser nor have such authorities passed upon or endorsed the merits of the offering of the Private
Placement Shares.
(vii) The
Purchaser understands that: (a) the Private Placement Shares have not been and are not being registered under the Securities
Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered
thereunder or (2) sold in reliance on an exemption therefrom; and (b) except as specifically set forth in the Registration
and Shareholder Rights Agreement, neither the Company nor any other person is under any obligation to register the Private Placement
Shares under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.
In this regard, the Purchaser understands that the SEC has taken the position that promoters or affiliates of a blank check company
and their transferees, both before and after an initial business combination, are deemed to be “underwriters”
under the Securities Act when reselling the securities of a blank check company. Based on that position, Rule 144 adopted
pursuant to the Securities Act would not be available for resale transactions of the Private Placement Shares despite technical
compliance with the requirements of such Rule, and the Private Placement Shares can be resold only through a registered offering
or in reliance upon another exemption from the registration requirements of the Securities Act.
(viii) The
Purchaser has such knowledge and experience in financial and business matters, knowledge of the high degree of risk associated
with investments in the securities of companies in the development stage such as the Company, is capable of evaluating the merits
and risks of an investment in the Private Placement Shares and is able to bear the economic risk of an investment in the Private
Placement Shares in the amount contemplated hereunder for an indefinite period of time. The Purchaser has adequate means of providing
for its current financial needs and contingencies and will have no current or anticipated future needs for liquidity which would
be jeopardized by the investment in the Private Placement Shares. The Purchaser can afford a complete loss of its investments in
the Private Placement Shares.
(ix) The
Purchaser understands that the Private Placement Shares shall bear the following legend and appropriate “stop transfer restrictions”:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL, IS
AVAILABLE. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO LOCKUP PROVISIONS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF DURING THE TERMS OF THE LOCKUP.”
Section 4. Conditions
of the Purchaser’s Obligations. The obligations of the Purchaser to purchase and pay for the Private Placement
Shares are subject to the fulfillment, on or before each Closing Date, of each of the following conditions:
A. Representations
and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct at
and as of such Closing Date as though then made.
B. Performance.
The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before such Closing Date.
C. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement.
D. Registration
and Shareholder Rights Agreement. The Company shall have entered into the Registration and Shareholder Rights
Agreement, in the form of Exhibit A hereto, on terms satisfactory to the Purchaser.
Section 5.
Conditions of the Company’s Obligations. The obligations of the Company to the Purchaser
under this Agreement are subject to the fulfillment, on or before each Closing Date, of each of the following conditions:
A. Representations
and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct at
and as of such Closing Date as though then made.
B. Performance.
The Purchaser shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by the Purchaser on or before such Closing Date.
C. Corporate
Consents. The Company shall have obtained the consent of its board of directors authorizing the execution, delivery and performance
of this Agreement and the issuance and sale of the Private Placement Shares hereunder.
D. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement.
Section 6. Miscellaneous.
A. Successors
and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether
so expressed or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this Agreement,
other than assignments by the Purchaser to affiliates thereof (including, without limitation one or more of its members).
B. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
C. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than
one party, but all such counterparts taken together shall constitute one and the same agreement. Signatures to this Agreement transmitted
via facsimile or e-mail shall be valid and effective to bind the party so signing.
D. Descriptive
Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute
a substantive part of this Agreement. The use of the word “including” in this Agreement shall be by way of example
rather than by limitation.
E. Governing
Law. This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall
be construed in accordance with the internal laws of the State of New York, without giving effect to conflicts of law principles
that would result in the application of the laws of another jurisdiction.
F. Amendments.
This Agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed by
the parties hereto.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
| |
COMPANY: |
| |
|
| |
HealthCor Catalio Acquisition Corp. |
| |
|
| |
By: |
|
| |
Name: Christine Clarke |
| |
Title: Chief Financial Officer |
| |
PURCHASER: |
| |
|
| |
HC SPONSOR LLC |
| |
Name:
Anabelle Gray Perez |
| |
Title: Authorized Signatory |
EXHIBIT A
Registration and Shareholder Rights Agreement
Exhibit 10.8
[●], 2021
HealthCor Catalio Acquisition Corp.
55 Hudson Yards, 28th Floor
New York, New York 10001
Re: Initial
Public Offering
Ladies and Gentlemen:
This
letter (this “Letter Agreement”) is being delivered to you in accordance with the Underwriting Agreement
(the “Underwriting Agreement”) entered into by and between HealthCor Catalio Acquisition Corp., a Cayman
Islands exempted company (the “Company”), and Jefferies LLC (the “Underwriter”),
relating to an underwritten initial public offering (the “Public Offering”) of 17,250,000 of the Company’s
Class A ordinary shares, par value $0.0001 per share (the “Ordinary Shares”) (including 2,250,000
Ordinary Shares that may be purchased pursuant to the Underwriter’s option to purchase additional shares), The Ordinary Shares will
be sold in the Public Offering pursuant to a registration statement on Form S-1 and a prospectus (the “Prospectus”)
filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”). Certain capitalized
terms used herein are defined in paragraph 1 hereof.
In
order to induce the Company and the Underwriter to enter into the Underwriting Agreement and to proceed with the Public Offering
and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, HC Sponsor LLC (the
“Sponsor”) and each of the undersigned (each, an “Insider” and, collectively,
the “Insiders”) hereby agree with the Company as follows:
1. Definitions.
As used herein, (i) “Business Combination” shall mean a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities;
(ii) “Founder Shares” shall mean the 4,312,500 Class B ordinary shares (up to 562,500 of
which are subject to forfeiture depending on the extent to which the Underwriter’s over-allotment option is exercised)
of the Company, par value $0.0001 per share, outstanding prior to the consummation of the Public Offering;
(iii) “Private Placement Shares” shall mean the Ordinary Shares of the Company that will be
acquired by the Sponsor for an aggregate purchase price of $5,000,000 (or up to $5,450,000 if the Underwriter exercises its
option to purchase additional shares in full), or $10.00 per Ordinary Shares, in a private placement that shall close
simultaneously with the consummation of the Public Offering; (iv) “Public Shareholders” shall
mean the holders of Ordinary Shares issued in the Public Offering; (v) “Public Shares” shall
mean the Ordinary Shares issued in the Public Offering; (vi) “Trust Account” shall mean the
trust account into which a portion of the net proceeds of the Public Offering and the sale of the Private Placement
Shares shall be deposited; (vii) “Transfer” shall mean the (a) sale of, offer to sell,
contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to
dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to
or decrease of a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder with respect to, any security,
(b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in
cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or
(b); and (viii) “Charter” shall mean the Company’s Amended and Restated Memorandum and
Articles of Association, as the same may be amended from time to time.
2. Representations
and Warranties.
(a) The
Sponsor and each Insider, with respect to itself, herself or himself, represent and warrant to the Company that it, she or he
has the full right and power, without violating any agreement to which it, she or he is bound (including, without limitation,
any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Letter Agreement,
and, as applicable, to serve as an officer of the Company and/or a director on the Company’s Board of Directors (the “Board”),
as applicable, and each Insider hereby consents to being named in the Prospectus, road show and any other materials as an officer
and/or director of the Company, as applicable.
(b) Each
Insider represents and warrants, with respect to herself or himself, that such Insider’s biographical information furnished
to the Company (including any such information included in the Prospectus) is true and accurate in all material respects and does
not omit any material information with respect to such Insider’s background. The Insider’s questionnaire furnished
to the Company is true and accurate in all material respects. Each Insider represents and warrants that such Insider is not subject
to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain
from any act or practice relating to the offering of securities in any jurisdiction; such Insider has never been convicted of,
or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of funds
of another person, or (iii) pertaining to any dealings in any securities and such Insider is not currently a defendant in
any such criminal proceeding; and such Insider has never been suspended or expelled from membership in any securities or commodities
exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
3.
Business Combination Vote. It is acknowledged and agreed that the Company shall not enter
into a definitive agreement regarding a proposed Business Combination without the prior consent of the Sponsor. The Sponsor and
each Insider, with respect to itself or herself or himself, agrees that if the Company seeks shareholder approval of a proposed
initial Business Combination, then in connection with such proposed initial Business Combination, it, she or he, as applicable,
shall vote all Founder Shares and any Public Shares held by it, her or him, as applicable, in favor of such proposed initial Business
Combination (including any proposals recommended by the Board in connection with such Business Combination) and not redeem
any Public Shares held by it, her or him, as applicable, in connection with such shareholder approval.
4.
Failure to Consummate a Business Combination; Trust Account Waiver.
(a) The
Sponsor and each Insider hereby agree, with respect to itself, herself or himself, that in the event that the Company fails to
consummate its initial Business Combination within the time period set forth in the Charter, the Sponsor and each Insider shall
take all reasonable steps to cause the Company to (i) cease all operations except for the purpose of winding up; (ii) as
promptly as reasonably possible but not more than 10 business days thereafter, redeem 100% of the Public Shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds
held in the Trust Account and not previously released to the Company to pay income taxes (less up to $100,000 of interest to pay
dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public
Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as
promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders
and the Board, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Company’s obligations
under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law.
The Sponsor and each Insider agree not to propose any amendment to the Charter (i) that would modify the substance or timing
of the Company’s obligation to provide holders of the Public Shares the right to have their shares redeemed in connection
with an initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete an initial Business
Combination within the required time period set forth in the Charter or (ii) with respect to any provision relating to the
rights of holders of Public Shares or pre-initial Business Combination activity unless the Company provides its Public Shareholders
with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account
and not previously released to the Company to pay income taxes, if any, divided by the number of then-outstanding Public Shares.
(b) The
Sponsor and each Insider, with respect to itself, herself or himself, acknowledges that it, she or he has no right, title,
interest or claim of any kind in or to any monies held in the Trust Account or any other asset of the Company as a result of
any liquidation of the Company with respect to the Founder Shares held by it, her or him, if any. The Sponsor and each
Insider hereby further waives, with respect to any Founder Shares and Public Shares held by it, her or him, as applicable,
any redemption rights it, she or he may have in connection with (x) the completion of the Company’s initial
Business Combination, and (y) a shareholder vote to approve an amendment to the Charter (i) that would modify the
substance or timing of the Company’s obligation to provide holders of the Public Shares the right to have their shares
redeemed in connection with an initial Business Combination or to redeem 100% of the Public Shares if the Company has not
consummated an initial Business Combination within the time period set forth in the Charter or (ii) with respect to any
provision relating to the rights of holders of Public Shares or pre-initial Business Combination activity (although the
Sponsor and the Insiders shall be entitled to liquidation rights with respect to any Public Shares they hold if the
Company fails to consummate a Business Combination within the required time period set forth in the Charter).
5. Lock-up;
Transfer Restrictions.
(a) The
Sponsor and the Insiders agree that they shall not Transfer any Founder Shares (the “Founder Shares Lock-up”)
until the earliest of (A) one year after the completion of the Company’s initial Business Combination and (B) following
the completion of an initial Business Combination, the date on which the Company completes a liquidation, merger, share exchange,
reorganization or other similar transaction that results in all of the Public Shareholders having the right to exchange their
Ordinary Shares for cash, securities or other property (the “Founder Shares Lock-up Period”). Notwithstanding
the foregoing, if, subsequent to a Business Combination, the closing price of the Ordinary Shares equals or exceeds $12.00 per
share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading
days within any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination, the
Founder Shares shall be released from the Founder Shares Lock-up.
(b) Subject
to the provisions set forth in paragraph 5(c), the Sponsor and Insiders agree that they shall not effectuate any
Transfer of Private Placement Shares until 30 days after the
completion of an initial Business Combination.
(c) Notwithstanding
the provisions set forth in paragraphs 5(a) and (b), Transfers of the Founder Shares and the
Private Placement Shares and the conversion of the Founder Shares are permitted
(i) to the Company’s officers or directors, any affiliates or family member of any of the Company’s officers
or directors, any members or partners of the Sponsor or their affiliates, any affiliates of the Sponsor, or any employees of
the Sponsor or any of its affiliates; (ii) in the case of an individual, by gift to a member of one of such
individual’s immediate family or to a trust, the beneficiary of which is a member of such individual’s immediate
family, an affiliate of such individual or to a charitable organization; (iii) in the case of an individual, by virtue
of the laws of descent and distribution upon death of such individual; (iv) in the case of an individual, pursuant to a
qualified domestic relations order; (v) by private sales or transfers made in connection with the consummation of a
Business Combination at prices no greater than the price at which the Founder Shares or Private Placement Shares, as
applicable, were originally purchased; (vi) by virtue of the Sponsor’s organizational documents upon liquidation
or dissolution of the Sponsor; (vii) to the Company for no value for cancellation in connection with the consummation of
its initial Business Combination, (viii) in the event of the Company’s liquidation prior to the completion of its
initial Business Combination; or (ix) in the event of completion of a liquidation, merger, share exchange or other
similar transaction which results in all of the Company’s Public Shareholders having the right to exchange their
Ordinary Shares for cash, securities or other property subsequent to the completion of an initial Business Combination; provided, however,
that in the case of clauses (i) through (vi), these permitted transferees must enter into a written agreement
agreeing to be bound by these transfer restrictions.
(d) During
the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, the Sponsor and
each Insider shall not, without the prior written consent of the Underwriter, Transfer any Ordinary Shares or
any other securities convertible into, or exercisable or exchangeable for, Ordinary Shares held by it, her or him, as applicable.
6. Remedies.
The Sponsor and each of the Insiders hereby agree and acknowledge that (i) each of the Underwriter and the Company would
be irreparably injured in the event of a breach by the Sponsor or such Insider of its, her or his obligations, as applicable under
paragraphs 3, 4, 5, 7, 10 and 11 of this Letter Agreement, (ii) monetary damages
may not be an adequate remedy for such breach and (iii) the non-breaching party shall be entitled to injunctive relief, in
addition to any other remedy that such party may have in law or in equity, in the event of such breach.
7. Payments
by the Company. Except as disclosed in the Prospectus, neither the Sponsor nor any affiliate of the Sponsor nor any
director or officer of the Company nor any affiliate of the directors and officers shall receive from the Company any finder’s
fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation prior to, or in connection
with any services rendered in order to effectuate the consummation of the Company’s initial Business Combination (regardless
of the type of transaction that it is).
8. Director
and Officer Liability Insurance. The Company will maintain an insurance policy or policies providing directors’
and officers’ liability insurance, and the Insiders shall be covered by such policy or policies, in accordance with its
or their terms, to the maximum extent of the coverage available for any of the Company’s directors or officers.
9. Termination.
This Letter Agreement shall terminate on the earlier of (i) the expiration of the Founder Shares Lock-up Period and (ii) the
liquidation of the Company; provided, however, that this Letter Agreement shall terminate in the event that the
Public Offering is not consummated and closed by June 30, 2021; provided further that paragraph 10 of
this Letter Agreement shall survive such liquidation.
10. Indemnification.
In the event of the liquidation of the Trust Account upon the failure of the Company to consummate its initial Business
Combination within the time period set forth in the Charter, the Sponsor (the “Indemnitor”) agrees
to indemnify and hold harmless the Company against any and all loss, liability, claim, damage and expense whatsoever
(including, but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing or
defending against any litigation, whether pending or threatened) to which the Company may become subject as a result of any
claim by (i) any third party for services rendered or products sold to the Company (except for the Company’s
independent auditors) or (ii) any prospective target business with which the Company has discussed entering into a
transaction agreement (a “Target”); provided, however, that such indemnification of
the Company by the Indemnitor (x) shall apply only to the extent necessary to ensure that such claims by a third
party for services rendered or products sold to the Company or a Target do not reduce the amount of funds in the Trust
Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the
Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per Public Share due to reductions
in the value of the trust assets, in each case net of interest that may be withdrawn to pay the Company’s tax
obligations, (y) shall not apply to any claims by a third party or Target who executed a waiver of any and all rights to
the monies held in the Trust Account (whether or not such waiver is enforceable) and (z) shall not apply to any claims
under the Company’s indemnity of the Underwriter against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. The Indemnitor shall have the right to defend against any such claim with counsel of its
choice reasonably satisfactory to the Company if, within 15 days following written receipt of notice of the claim to the
Indemnitor, the Indemnitor notifies the Company in writing that it shall undertake such defense.
11. Forfeiture
of Founder Shares. To the extent that the Underwriter does not exercise its option to purchase additional Ordinary Shares
within 45 days from the date of the Prospectus in full (as further described in the Prospectus), the Sponsor agrees to
automatically surrender to the Company for no consideration, for cancellation at no cost, an aggregate number of Founder
Shares so that the number of Founder Shares will equal 20% of the sum of the total number of Ordinary Shares and Founder
Shares outstanding at such time.
12. Entire
Agreement. This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect
of the subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto,
written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. This
Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular
provision, except by a written instrument executed by (1) each Insider that is the subject of any such change, amendment,
modification or waiver and (2) the Sponsor.
13. Assignment.
No party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the
prior written consent of the other parties. Any purported assignment in violation of this paragraph shall be void and ineffectual
and shall not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding
on the Sponsor, each of the Insiders and each of their respective successors, heirs, personal representatives and assigns and
permitted transferees.
14. Counterparts.
This Letter Agreement may be executed in any number of original or facsimile counterparts, and each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
15. Effect
of Headings. The paragraph headings herein are for convenience only and are not part of this Letter Agreement and shall not
affect the interpretation thereof.
16. Severability.
This Letter Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of this Letter Agreement or of any other term or provision hereof. Furthermore, in lieu
of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this
Letter Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and
enforceable.
17. Governing
Law. This Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New
York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another
jurisdiction. The parties hereto (i) all agree that any action, proceeding, claim or dispute arising out of, or relating
in any way to, this Letter Agreement shall be brought and enforced in the courts of New York City, in the State of New York, and
irrevocably submit to such jurisdiction and venue, which jurisdiction and venue shall be exclusive, and (ii) waive any objection
to such exclusive jurisdiction and venue or that such courts represent an inconvenient forum.
18.
Notices. Any notice, consent or request to be given in connection with any of the terms or provisions of this Letter
Agreement shall be in writing and shall be sent by express mail or similar private courier service, by certified mail (return
receipt requested), by hand delivery or facsimile or other electronic transmission.
[Signature Page Follows]
| |
|
Name: |
Anabelle Perez Gray |
| |
|
Title: |
Authorized Signatory |
Acknowledged and Agreed:
HealthCor Catalio
Acquisition Corp.
| By: |
|
|
| |
Name: |
Christine Clarke |
|
| |
Title: |
Chief Financial Officer |
|
Exhibit 23.1
Independent
Registered Public Accounting Firm’s Consent
We consent to the inclusion in this
Registration Statement of HealthCor Catalio Acquisition Corp. (the “Company”) on Amendment No. 2 to Form S-1
(File No. 333-252002) of our report dated December 9, 2020, except for the second paragraph of Note 8, as to which the
date is January 19, 2021, which includes an explanatory paragraph as to the Company’s ability to continue as a going
concern, with respect to our audit of the financial statements of HealthCor Catalio Acquisition Corp. as of November 24,
2020 and for the period from November 18, 2020 (inception) through November 24, 2020, which report appears in the
Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading
“Experts” in such Prospectus.
/s/ Marcum llp
Marcum llp
New York, NY
January 19, 2021
