References to the "company," "our," "us" or "we" refer to
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Table of Contents Overview We are a blank check company incorporated in theCayman Islands onAugust 26, 2020 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses that we have not yet selected. While we may pursue an acquisition opportunity in any business, industry, sector or geographical location, we intend to focus on industries that complement our management team's background and to capitalize on the ability of our management team to identify and acquire a business, focusing on the healthcare or healthcare related industries. In particular, we will pursue investments, primarily based inNorth America andEurope and selectively in other geographies, includingAsia and emerging markets, in biopharmaceutical, specialty pharmaceutical, medical device, diagnostics and enabling life science technology companies. We may pursue a transaction in which our shareholders immediately prior to the completion of our initial business combination would collectively own a minority interest in the post-business combination company. Our sponsor isBCLS Acquisition Holdings, LP , aCayman Islands exempted limited partnership. Our registration statement for our initial public offering was declared effective onOctober 21, 2020 . OnOctober 26, 2020 , we consummated our initial public offering of 14,375,000 public shares, including the 1,875,000 public shares as a result of the Underwriters' full exercise of their over-allotment option, at an offering price of$10.00 per public share, generating gross proceeds of approximately$143.8 million . We incurred total offering costs of approximately$8.5 million (inclusive of approximately$5.0 million in deferred underwriting fees). Simultaneously with the closing of the initial public offering, we consummated the private placement ("private placement") of 487,500 Class A ordinary shares or private placement shares, at a price of$10.00 per private placement share to our sponsor, generating gross proceeds of approximately$4.9 million . Upon the closing of the initial public offering and the private placement,$143.8 million ($10.00 per share) of the net proceeds of the initial public offering and certain of the proceeds of the private placement was placed in a trust account, located inthe United States withContinental Stock Transfer & Trust Company acting as trustee, and is invested only inU.S. government securities, within the meaning set forth in 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 directU.S. government treasury obligations, until the earlier of: (i) the completion of a business combination, and then only in connection with those Class A ordinary shares that the holders of public shares properly elected to redeem, subject to certain limitations described in the registration statement relating to our initial public offering, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of 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 our initial public offering, orOctober 26, 2022 , or (B) with respect to any other provision relating to the rights of holders of Class A ordinary shares, and (iii) the redemption of the Class A ordinary shares if we have not consummated our business combination within the prescribed time period, subject to applicable law. The remaining net proceeds (not held in the trust account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. We may use the interest income generated by the assets in the trust account to pay for taxes that were paid by us or are payable by us and, in case we do not complete our initial business combination within the prescribed time period,$100,000 of the interest income may be used to pay dissolution expenses. Our management has broad discretion with respect to the specific application of the net proceeds of the initial public offering and the sale of private placement shares, although substantially all of the net proceeds are intended to be applied generally toward consummating a business combination. If we are unable to complete a business combination within 24 months from the closing of the initial public offering, orOctober 26, 2022 , 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 taxes that, 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 the remaining shareholders and the board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) our obligations underCayman Islands law to provide for claims of creditors and the requirements of other applicable law. 55
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Table of Contents We intend to effectuate our initial business combination using cash from the proceeds of our initial public 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 our initial public 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 56
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Table of Contents • 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. Results of Operations Our entire activity fromAugust 26, 2020 (inception) throughDecember 31, 2020 , was in preparation for an initial public offering, and since our initial public offering, our activity has been limited to the search for a prospective initial business combination. We will not generate any operating revenues until the closing and completion of our initial business combination. For the period fromAugust 26, 2020 (inception) throughDecember 31, 2020 , we had a net loss of approximately$167,000 , which consisted of approximately$168,000 of general and administrative expenses, including approximately$24,000 of general and administrative expenses with related party, offset by approximately$1,000 of net gain from investments held in the trust account. Liquidity and Capital Resources As ofDecember 31, 2020 , we had approximately$1.0 million in cash and working capital of approximately$1.3 million . Our liquidity needs to date have been satisfied through a payment of$25,000 by our sponsor to cover certains expenses in exchange for the issuance of the founder shares, a loan of approximately$46,000 from our sponsor pursuant to a promissory note, datedAugust 31, 2020 (the "Note"), and the proceeds from the consummation of the private placement not held in the trust account. We repaid the Note in full onOctober 29, 2020 . Subsequent to the consummation of the initial public offering and private placement, our liquidity needs have been satisfied with the proceeds from the consummation of the private placement not held in the trust account. In addition, in order to finance transaction costs in connection with a business combination, our sponsor may, but is not obligated to, provide us with working capital loans. To date, there are no working capital loans outstanding. Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity from our sponsor or an affiliate of our sponsor, or our officers and directors to meet our needs through the earlier of the consummation of a business combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the business combination. Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Related Party Transactions Founder Shares OnAugust 31, 2020 , our sponsor paid$25,000 to cover certain expenses on our behalf in exchange for the issuance of 3,593,750 Class B ordinary shares, par value$0.0001 . InSeptember 2020 , our sponsor transferred an aggregate of 90,000 founder shares to our independent directors. The sponsor agreed to forfeit up to 468,750 founder shares to the extent that the over-allotment option was not exercised in full by the Underwriters, so that the founder shares would represent 20.0% of the Company's issued and outstanding ordinary shares (excluding the private placement shares and assuming the initial shareholders did not purchase any public shares in the initial public offering) after the initial public offering. The Underwriters fully exercised the over-allotment option onOctober 26, 2020 ; thus, these 468,750 founder shares were no longer subject to forfeiture. 57
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Table of Contents The initial shareholders agreed, subject to limited exceptions, not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of the initial business combination and (B) subsequent to the initial business combination, (x) if the closing price of Class A ordinary shares equals or exceeds$12.00 per share (as adjusted for share sub-divisions, 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 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 the public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Private Placement Shares Simultaneously with the closing of the initial public offering, we consummated the private placement of 487,500 private placement shares, at a price of$10.00 per private placement share to our sponsor, generating gross proceeds of approximately$4.9 million . The private placement shares will not be transferable or salable until 30 days after the completion of the initial business combination. Certain proceeds from the private placement shares have been added to the proceeds from the initial public offering held in the trust account. The sponsor and our officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their private placement shares until 30 days after the completion of the initial business combination. Related Party Loans OnAugust 31, 2020 , our sponsor agreed to loan us up to$300,000 to cover expenses related to the initial public offering pursuant to the Note. This loan was non-interest bearing and payable upon the completion of the initial public offering. We borrowed approximately$46,000 under the Note and fully repaid this Note onOctober 29, 2020 . In addition, in order to finance transaction costs in connection with a 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 the Company completes a business combination, the Company would repay the working capital loans. In the event that a business combination does not close, we 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 or, at the lender's discretion, up to$1.5 million 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. To date, the Company had no outstanding borrowings under the working capital loans. Administrative Support Agreement Commencing on the date our securities were first listed on the Nasdaq, we agreed to pay our sponsor a total of$10,000 per month for office space, utilities, secretarial and administrative support services. Upon completion of the initial business combination or the Company's liquidation, we will cease paying these monthly fees. We accrued approximately$24,000 in these fees for the period fromAugust 26, 2020 throughDecember 31, 2020 . Other Contractual Obligations Registration and Shareholder Rights The holders of founder shares, private placement shares, and securities that may be issued upon conversion of working capital loans, if any, will be entitled to registration rights pursuant to a registration and shareholder rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, 58
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Table of Contents that we register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent our completion of a 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, in accordance with the letter agreement our initial shareholders entered into and (ii) in the case of the private placement shares, 30 days after the completion of our business combination. The company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement We granted the Underwriters a 45-day option from the final prospectus relating to the initial public offering to purchase up to 1,875,000 additional public shares to cover over-allotments at the initial public offering price less the underwriting discounts and commissions. The Underwriters fully exercised the over-allotment option onOctober 26, 2020 . The Underwriters were paid a cash underwriting discount of$0.20 per public share, or$2.9 million in the aggregate, paid upon the closing of the initial public offering. In addition,$0.35 per public share, or approximately$5.0 million in the aggregate, will be payable to the Underwriters for deferred underwriting commissions. 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 and Estimates This management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance withU.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the following as our critical accounting policies: Investments Held in the Trust Account Our portfolio of investments held in the trust account is comprised ofU.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 investments in money market funds that invest inU.S. government securities, or a combination thereof. The investments held in the trust account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in net gain on investments held in the trust account in the accompanying statement of operations. The estimated fair values of investments held in the trust account are determined using available market information, other than for investments in open-ended money market funds with published daily net asset values ("NAV"), in which case we use NAV as a practical expedient to fair value. The NAV on these investments is typically held constant at$1.00 per unit. Class A Ordinary Shares Subject to Possible Redemption We account for our Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 "Distinguishing Liabilities from Equity." Shares of Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Shares of conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, shares of Class A ordinary shares are classified as shareholders' equity. Our public shares features certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, atDecember 31, 2020 , 14,375,000 shares of Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders' equity section of the accompanying balance sheets. 59
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Table of Contents Effective with the closing of the initial public offering, the company recognized the accretion from initial book value to redemption amount, which, resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit. Net Loss Per Ordinary Share We comply with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." We have two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per ordinary share is calculated by dividing the net income (loss) by the weighted average shares of ordinary shares outstanding for the respective period. AtDecember 31, 2020 , we 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 our Company. As a result, diluted loss per share is the same as basic loss per share for the period presented. Recent Accounting Pronouncements Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material impact on our financial statements. Off-Balance Sheet Arrangements As ofDecember 31, 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. JOBS Act OnApril 5, 2012 , the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an "emerging growth company" and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As such, our financial statements may not be comparable to companies that comply with 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 control 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 executive 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. 60
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