References to the "company," "our," "us" or "we" refer to BCLS Acquisition Corp. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. We have re-evaluated our application of ASC 480-10-S99-3A to our accounting and classification of the redeemable public shares, issued in the initial public offering on October 26, 2020. Historically, a portion of the public shares was classified as permanent equity on the basis that we will not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001, as required by our amended and restated memorandum and articles of association. Pursuant to such re-evaluation, our management has determined that all of the public shares should be reclassified as temporary equity regardless of the net tangible assets redemption limitation contained in the amended and restated memorandum and articles of association. In addition, in connection with the change in presentation for the public shares, management determined that it should restate the earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates a business combination as the most likely outcome, in which case, both classes of shares share pro rata in the income and losses of our company. Therefore, on December 8, 2021, our management and the Audit Committee concluded that our previously issued (i) audited balance sheet as of October 26, 2020, as previously reported on a Current Report on Form 8-K filed with the SEC on October 30, 2020, (ii) audited financial statements for the period ended December 31, 2020 as previously included in our Original Filing; (iii) unaudited condensed financial statements included in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on May 14, 2021 and (iv) unaudited condensed financial statements included in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the SEC on August 12, 2021, should be restated to report all public shares as temporary equity and should no longer be relied upon. As such, the company is restating the 2020 periods herein and intends to restate its 2021 interim financial statements for the Affected Periods in an amendment to its quarterly report on Form 10-Q for the period ended September 30, 2021. The restatement does not have an impact on our cash position and cash held in the trust account. Our management has concluded that in light of the classification error described above, a material weakness exists in our internal control over financial reporting and that our disclosure controls and procedures were not effective. The restatement is more fully described in Note 2 of the notes to the financial statements included herein.



                                       54

--------------------------------------------------------------------------------


  Table of Contents
Overview
We are a blank check company incorporated in the Cayman Islands on August 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 in North America and
Europe and selectively in other geographies, including Asia 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 is BCLS Acquisition Holdings, LP, a Cayman Islands exempted limited
partnership. Our registration statement for our initial public offering was
declared effective on October 21, 2020. On October 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 in the United States with Continental Stock Transfer &
Trust Company acting as trustee, and is invested only in U.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 direct U.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, or October 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, or October 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
under Cayman Islands law to provide for claims of creditors and the requirements
of other applicable law.

                                       55

--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------


  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 from August 26, 2020 (inception) through December 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 from August 26, 2020 (inception) through December 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 of December 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, dated August 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 on October 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
On August 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. In September 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 on October 26, 2020; thus, these 468,750 founder shares were no longer
subject to forfeiture.

                                       57

--------------------------------------------------------------------------------


  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
On August 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 on October 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 from
August 26, 2020 through December 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

--------------------------------------------------------------------------------


  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 on October 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 with U.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 of 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 investments in
money market funds that invest in U.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, at December 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

--------------------------------------------------------------------------------


  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. At
December 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 of December 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
On April 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

--------------------------------------------------------------------------------

Table of Contents

© Edgar Online, source Glimpses