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.
Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form
10-Q
includes "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the
Exchange Act that are not historical facts, and involve risks and uncertainties
that could cause actual results to differ materially from those expected and
projected. All statements, other than statements of historical fact included in
this
Form 10-Q
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"expect," "believe," "anticipate," "intend," "estimate," "seek" and variations
and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future
performance, but reflect management's current beliefs, based on information
currently available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and results
discussed in the forward-looking statements. For information identifying
important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements, please refer to the Risk
Factors section of the Company's final prospectus for its Initial Public
Offering filed with the U.S. Securities and Exchange Commission (the "SEC"). The
Company's securities filings can be accessed on the EDGAR section of the SEC's
website at www.sec.gov. Except as expressly required by applicable securities
law, the Company disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information, future events
or otherwise.
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 revenues to date.
Our only activities for the three-month ended March 31, 2021 were organizational
activities and those necessary to prepare for the 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 incur expenses as a result of being a public company
(for legal, financial reporting, accounting and auditing compliance), as well as
for due diligence expenses.
For the three months ended March 31, 2021, we had a net income of $ 9,882,660
which was as the result of as gain on change in fair value of warrant liability
offset by the formation and operating costs.

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Liquidity and Capital Resources
As of March 31, 2021, we had cash of $1,583,206. Until the consummation of our
Initial Public Offering, our only source of liquidity was an initial purchase of
common stock by our Sponsor and loans from our Sponsor.
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 overallotment 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 our 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 overallotment
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 $630,809 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 $1,583,206 as of
March 31, 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.

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Off-Balance Sheet
Financing Arrangements
We have no obligations, assets or liabilities, which would be
considered off-balance sheet
arrangements as of March 31, 2021. 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-balance sheet
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 our 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.
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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The net proceeds of the initial public offering and the sale of the private
placement warrants held in the trust account at J.P. Morgan Chase Bank, N.A.,
maintained by Continental Stock Transfer & Trust Company, acting as trustee, are
invested in U.S. government treasury bills 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.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
In connection with the restatement of our January 26, 2021 audited closing
balance sheet, our management reassessed the effectiveness of our disclosure
controls and procedures as of March 31, 2021. As a result of that reassessment
and in light of the SEC Statement, our management determined that our disclosure
controls and procedures as of March 31, 2021 were not effective solely as a
result of its classification of the warrants as components of equity instead of
as derivative liabilities. Due solely to the events that led to our restatement,
management has made changes in internal controls related to the accounting for
warrants issued in connection with our initial public offering. In light of the
material weakness that we identified, we performed additional analysis as deemed
necessary to ensure that our financial statements for the three months ended
March 31, 2021, were prepared in accordance with U.S. generally accepted
accounting principles. Accordingly, management believes that the financial
statements included in this Quarterly Report on Form 10-Q present fairly in all
material respects our financial position, results of operations and cash flows
for the period presented.
Officer concluded that our disclosure controls and procedures (as defined in
Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were effective.

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Table of Contents Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. In light of the restatement of the previously filed financial statements, we plan to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.


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