References to the "Company," "us," "our" or "we" refer to SCP & CO Healthcare
Acquisition Company. References to our "management" or our "management team" are
to our officers and directors, and references to the "sponsor" are to SCP & CO
Sponsor, LLC. The following discussion and analysis of our financial condition
and results of operations should be read in conjunction with our audited
financial statements and related notes included herein. Certain information
contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties.
Overview
We are a blank check company formed under the laws of the State of Delaware on
July 29, 2020, for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or other similar business
combination with one or more businesses. We intend to effectuate our Business
Combination using cash from the proceeds of the Initial Public Offering and the
sale of the Private Placement Warrants, our capital stock, debt or a combination
of cash, stock and debt.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a Business
Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any operating revenues
to date. Our only activities from inception through December 31, 2020 were
organizational activities and those necessary to prepare for our initial public
offering, described below. We do not expect to generate any operating revenues
until after the completion of our initial business combination. We expect to
generate non-operating income in the form of interest income on marketable
securities held after our initial public offering. We expect that we will 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 in connection with searching for, and completing, our initial business
combination.
For the period from July 29, 2020 (inception) through December 31, 2020, we had
a net loss of $1,952, which consisted of formation and operating expenses.
Liquidity and Capital Resources
As of December 31, 2020, we had cash of $25,000. Until the consummation of our
initial public offering, our only source of liquidity was an initial purchase of
common stock by the sponsor and loans from our sponsor.
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On January 21, 2021, we consummated our initial public offering of 23,000,000
Units, at a price of $10.00 per unit, which included the full exercise by the
underwriters of their over-allotment option in the amount of 3,000,000 units,
generating gross proceeds of $230,000,000. Simultaneously with the closing of
our initial public offering, we consummated the sale of 8,100,000 private
placement warrants to the sponsor at a price of $1.00 per private placement
warrant generating gross proceeds of $8,100,000.
Following our initial public offering, the full exercise of the over-allotment
option, and the sale of the private placement warrants, a total of $230,000,000
was placed in the trust account. We incurred $13,179,483 in transaction costs,
including $4,600,000 of underwriting fees, $8,050,000 of deferred underwriting
fees and $529,483 of other offering costs.
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
deferred underwriting commissions and income taxes payable), to complete our
initial business combination. To the extent that our capital stock or debt is
used, in whole or in part, as consideration to complete our initial business
combination, the remaining proceeds held in the trust account will be used as
working capital to finance the operations of the target business or businesses,
make other acquisitions and pursue our growth strategies.
We intend to use the funds held outside the trust account of $3,374,022 as of
January 26, 2021. primarily to 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 our initial
business combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with our 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. In the event that our initial business combination does
not close, we may use a portion of the working capital held outside the trust
account to repay such loaned amounts, but no proceeds from our trust account
would be used for such repayment. Up to $1,500,000 of such loans may be
convertible into warrants, at a price of $1.00 per warrant, at the option of the
lender. The warrants would be identical to the private placement warrants.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business, undertaking in-depth due diligence
and negotiating our initial business combination are less than the actual amount
necessary to do so, we may have insufficient funds available to operate our
business prior to our initial business combination. Moreover, we may need to
obtain additional financing either to complete our initial business combination
or because we become obligated to redeem a significant number of our public
shares upon consummation of our initial business combination, in which case we
may issue additional securities or incur debt in connection with such initial
business combination. Subject to compliance with applicable securities laws, we
would only complete such financing simultaneously with the completion of our
initial business combination. If we are unable to complete our initial business
combination because we do not have sufficient funds available to us, we will be
forced to cease operations and liquidate the trust account. In addition,
following our initial business combination, if cash on hand is insufficient, we
may need to obtain additional financing in order to meet our obligations.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of December 31, 2020. We do not participate in
transactions that create relationships with unconsolidated entities or financial
partnerships, often referred to as variable interest entities, which would have
been established for the purpose of facilitating off-balance sheet arrangements.
We have not entered into any off-balancesheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of
other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than described below.
Commencing on January 21, 2021, we entered into an agreement pursuant to which
it will pay the Sponsor $10,000 per month for office space, secretarial and
administrative services. Upon completion of our initial business combination or
its liquidation, we will cease paying these monthly fees.
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The underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,050,000
in the aggregate. The deferred fee will become payable to the underwriters from
the amounts held in the Trust Account solely in the event that we complete a
Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have not identified any critical accounting policies.
Recent Accounting Standards
Management does not believe that any other recently issued, but not yet
effective, accounting standards, if currently adopted, would have a material
effect on our financial statements.
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