References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to Healthcare Capital Corp. References to our "management" or
our "management team" refer to our officers and directors, and references to the
"Sponsor" refer to Healthcare Capital Sponsor, LLC. 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 Quarterly Report.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of 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 Quarterly
Report 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. Forward-looking statements in this report may
include, for example, statements about:
? our ability to select an appropriate target business or businesses;
? our ability to complete our initial business combination, including the
Transactions (as defined herein);
? our expectations around the performance of the prospective target business or
businesses, including Alpha Tau (as defined herein);
? 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, as a result of which they would then receive
expense reimbursements;
? our potential ability to obtain additional financing to complete our initial
business combination;
? our pool of prospective target businesses in the healthcare industry;
? our ability to consummate an initial business combination due to the continued
uncertainty resulting from the COVID-19 pandemic;
? the ability of our officers and directors to generate a number of potential
acquisition opportunities;
? our public securities' liquidity and trading;
? the trust account not being subject to claims of third parties; or
? our financial performance following our Initial Public Offering.
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 SEC as
well as the Risk Factors section of the proxy statement/ prospectus included in
the registration statement on Form F-4 for the proposed Merger (as defined
below) filed by Alpha Tau on August 19, 2021, as amended on October 18, 2021 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
August 18, 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 will 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.
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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.
Recent Developments
On July 7, 2021, we entered into a Merger Agreement with Alpha Tau and Merger
Sub. Alpha Tau is a clinical-stage oncology therapeutics company focused on the
research, development and commercialization of alpha radiation technology as
highly potent, yet uniquely conformal, localized radiation therapy for solid
tumors. The proprietary Alpha DaRT technology is designed to utilize the
specific therapeutic properties of alpha particles while aiming to overcome, and
even harness for potential benefit, the traditional shortcomings of alpha
radiation's limited range. Alpha Tau believes that the Alpha DaRT technology has
the potential to be broadly applicable across multiple targets and tumor types.
The parties anticipate that the Transactions will be consummated in the fourth
quarter of 2021, after obtaining the Company Stockholder Approval and the Alpha
Tau Shareholder Approval and the fulfillment or waiver of certain other
conditions as described below.
Upon the Effective Time, the existing shareholders of Alpha Tau will own
approximately 56.3% of the outstanding Alpha Tau Ordinary Shares and our
stockholders and the PIPE Investors (as defined below) will own the remaining
Alpha Tau Ordinary Shares. These percentages are calculated based on a number of
assumptions and are subject to adjustment in accordance with the terms of the
Merger Agreement. These relative percentages assume that none of our existing
stockholders exercise their redemption rights in connection with the Merger. If
any of HCCC's stockholders exercise their redemption rights, or any of the other
assumptions underlying these percentages become inaccurate, these percentages
may vary from the amounts shown above.
The following securities issuances will be made by Alpha Tau to our
securityholders at the Effective Time and in each case assume the Share Split
(as defined below) has occurred: (i) each share of our Class A common stock
(including shares issuable upon the conversion of our Class B common stock as
described below) will be exchanged for one Alpha Tau Ordinary Share and (ii)
each outstanding warrant of the Company will be assumed by Alpha Tau and will
become a warrant of Alpha Tau (each, an "Alpha Tau Warrant") (with the number of
Alpha Tau Ordinary Shares underlying the Alpha Tau Warrants and the exercise
price of such Alpha Tau Warrants subject to adjustment in accordance with the
terms of the Merger Agreement).
Immediately prior to the Effective Time, (i) each preferred share of Alpha Tau
will be automatically converted into such number of Alpha Tau Ordinary Shares as
determined in accordance with the existing articles of association of Alpha Tau;
(ii) each Alpha Tau Ordinary Share that is issued and outstanding immediately
prior to the Effective Time will be split into 0.905292 of one Alpha Tau
Ordinary Share (rounded to the nearest whole number) (the "Split Factor"). The
Split Factor was set as of the date of the execution of the Merger Agreement and
is based upon the agreed pre-money equity value of Alpha Tau (rounded to the
nearest whole number) (the "Share Split"); and (iii) outstanding securities
convertible into Alpha Tau Ordinary Shares shall be adjusted to give effect to
the foregoing transactions and remain outstanding. Additionally, concurrently
with the closing of the Merger, Alpha Tau will issue securities pursuant to the
Subscription Agreements, as described in more detail below.
Following the Share Split and immediately prior to the Effective Time, each
share of our Class B common stock will be automatically converted into one share
of our Class A common stock and subsequently exchanged into one Alpha Tau
Ordinary Share, as described above.
Sponsor Support Agreement
Concurrently with the execution of the Merger Agreement, the Sponsor and certain
insiders entered into the Sponsor Support Agreement in favor of the Company and
Alpha Tau, pursuant to which they have agreed to, among other items, (i) vote
all shares of common stock of the Company beneficially owned by them in favor of
the Transactions and each other proposal related to the Transactions proposed by
the Company's board of directors at the meeting of the Company stockholders
relating to the Transactions; (ii) appear at such stockholder meeting (or
otherwise cause such shares to be counter as present thereat) for the purpose of
establishing a quorum; (iii) vote all such shares against any action that would
reasonably be expected to impede, interfere with, delay, postpone or adversely
affect the Merger or any of the other transactions contemplated by the Merger
Agreement or result in a breach of any covenant, representation or warranty or
other obligation or agreement of the Company under the Merger Agreement or any
other agreement entered into in connection with the Transactions or result in
any of the conditions set forth in Article IX of the Merger Agreement not being
fulfilled and against any change in business, management or the board of
directors of the Company (other than as contemplated by the Transactions); (v)
not to redeem or seek to redeem any such shares, in connection with the Company
Stockholder Approval; and (vi) not to transfer, assign or sell such shares,
except to certain permitted transferees, prior to the consummation of the
Transactions.
Additionally, the Sponsor Support Agreement provides that the Sponsor and such
insiders agreed not to transfer any of the Alpha Tau's equity securities owned
by the Sponsor and such insiders, except to certain permitted transferees,
beginning at the Effective Time and continuing until the earlier of (x) one year
following the Closing Date (as defined in the Merger Agreement) and (y)
following the date that the last sale price of the Alpha Tau Ordinary Shares
equals or exceeds $12.00 per share (subject to certain adjustments) for any 20
trading days within any 30 trading day period commencing at least 150 days after
the Closing Date.
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The Sponsor Support Agreement also provides that the Sponsor will, immediately
prior to the Effective Time, surrender to the Company for no consideration
1,031,250 Founder Shares and 1,020,000 Private Placement Warrants owned by the
Sponsor. Further, in the event that the Aggregate Transaction Proceeds (as
defined in the Merger Agreement) are less than or equal to $225,000,000, the
Sponsor will, immediately prior to the Effective Time, surrender to the Company
for no consideration 1,718,750 Founder Shares and 1,700,000 private placement
warrants. In the event that the Aggregate Transaction Proceeds exceed
$225,000,000 but are less than $250,000,000, the Sponsor will, immediately prior
to the Effective Time, surrender to the Company for no consideration such
percentage of Redemption Equity that is equal to 100% minus the quotient of (x)
the amount by which the Aggregate Transaction Proceeds exceed $225,000,000 (not
to exceed $25,000,000), divided by (y) $25,000,000. In the event the Aggregate
Transaction Proceeds exceed $250.0 million, no Redemption Equity will be
forfeited. Further, an additional 1,375,000 Founder Shares and 1,360,000 Private
Placement Warrants are subject to vesting over a three year period following the
Closing Date. The Conditional Equity shall vest only if the volume-weighted
average price of Alpha Tau's ordinary shares on the Nasdaq exceeds $14.00 per
share (as adjusted for share sub-divisions, share capitalizations,
reorganizations, recapitalizations and the like recapitalization) for 20 trading
days within any 30-trading day period. If the Earnout Condition is not
satisfied, the Conditional Equity shall not vest and the Sponsor shall,
immediately as of the expiration of the Earnout Period, automatically be deemed
to irrevocably transfer to Alpha Tau, surrender and forfeit (and the Sponsor
shall take all actions necessary to effect such transfer, surrender and
forfeiture) for no consideration the Conditional Equity. During the Earnout
Period, subject to certain exceptions, the Sponsor shall not transfer the
Conditional Equity.
Alpha Tau Support Agreement
Concurrently with the execution of the Merger Agreement, Alpha Tau, the Company,
certain Alpha Tau Shareholders entered into an agreement (the "Alpha Tau Support
Agreement") pursuant to which such Alpha Tau Shareholders agreed to, among other
items, (i) vote all beneficially owned shares of Alpha Tau in favor of the
Merger and the other transactions contemplated by the Merger Agreement and each
other proposal on the agenda at a shareholder meeting called by Alpha Tau for
the relating to the Transactions, (ii) appear at such meeting or otherwise cause
such shares to be counted as present thereat for the purpose of establishing a
quorum; (ii) vote or execute a written consent against any Company Alternative
Transaction Proposal (as defined in the Merger Agreement) and any other action
that would reasonably be expected to impede, interfere with, delay, postpone or
adversely affect the Merger or any of the other transactions contemplated by the
Merger Agreement or result in a breach of any covenant, representation or
warranty or other obligation or agreement of Alpha Tau under the Merger
Agreement or any other agreement entered into in connection with; and (iii) not
to transfer, assign or sell such shares, except to certain permitted
transferees, prior to the consummation of the Transactions.
Additionally, pursuant to the Alpha Tau Support Agreement, such Alpha Tau
Shareholders agreed not to transfer any of Alpha Tau's equity securities owned
by owned by such Alpha Tau Shareholders, except to certain permitted
transferees, beginning at the Effective Time and continuing until the earlier of
(x) 180 days following the Closing Date (as defined in the Merger Agreement) and
(y) following the date that the last sale price of the Alpha Tau Ordinary Shares
equals or exceeds $12.00 per share (subject to certain adjustments) for any 20
trading days within any 30 trading day period commencing at least 150 days after
the Closing Date.
PIPE Subscription Agreements
Concurrently with the execution of the Merger Agreement, Alpha Tau entered into
Subscription Agreements with certain PIPE Investors pursuant to which, among
other things, the PIPE Investors have agreed to subscribe for and purchase, and
Alpha Tau has agreed to issue and sell to the PIPE Investors, an aggregate of
approximately 9,263,006 Alpha Tau Ordinary Shares (on a post-Share Split basis)
for an aggregate purchase price of up to $92,630,060 immediately prior to the
Effective Time, on the terms and subject to the conditions set forth therein.
The Subscription Agreement contains customary representations and warranties of
Alpha Tau, on the one hand, and each PIPE Investor, on the other hand, and
customary conditions to closing, including the consummation of the Merger.
The Merger Agreement and related agreements are further described in our Current
Report on Form 8-K filed on July 8, 2021. Other than as specifically discussed,
this report does not assume the closing of the proposed Transactions.
Results of Operations
We have neither engaged in any operations nor generated any operating revenues
to date. Our only activities from inception through September 30, 2021 were
organizational activities and those related to the Initial Public Offering,
described below and identifying a target company for a Business Combination,
including the Merger with Alpha Tau. 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 the 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, a Business
Combination.
For the three months ended September 30, 2021, we had a net income of $249,973,
which consisted of the interest earned on marketable securities held in the
Trust Account of $4,225 and the change in fair value of warrant liabilities of
$752,500, offset by formation and operational costs of $506,752.
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For the nine months ended September 30, 2021, we had a net income of $5,361,331,
which consists of the interest earned on marketable securities held in the Trust
Account of $11,620 and the change in fair value of warrant liabilities of
$8,082,500, offset by formation and operational costs of $1,201,860, transaction
costs associated with the Initial Public Offering of $850,929, and loss on the
initial issuance of Private Placement Warrants of $680,000.
For the period from August 18, 2020 (inception) through September 30, 2020, we
had a net loss of $878, which consisted of formation and operational costs.
Liquidity and Capital Resources
On January 20, 2021, we consummated the Initial Public Offering of 27,500,000
Units, at a price of $10.00 per Unit, which included the partial exercise by the
underwriters of their over-allotment option in the amount of 3,500,000 Units,
generating gross proceeds of $275,000,000. Simultaneously with the closing of
the Initial Public Offering, we consummated the sale of 6,800,000 Private
Placement Warrants to the Sponsor at a price of $1.00 per Private Placement
Warrant generating gross proceeds of $6,800,000.
For the nine months ended September 30, 2021, cash used in operating activities
was $860,653. Net income of $5,361,331 was affected by the change in fair value
of warrant liabilities of $8,082,500, the change in fair value of the warrant
liability in excess of purchase price paid for Private Placement Warrants of
$680,000, transaction costs associated with the Initial Public Offering of
$850,929, and the interest earned on marketable securities held in the Trust
Account of $11,620. Changes in operating assets and liabilities provided
$341,207 of cash for operating activities.
For the period from August 18, 2020 (inception) through September 30, 2020, cash
used in operating activities was $0. Net loss of $878 was offset by changes in
operating assets and liabilities of $878.
Following the Initial Public Offering, the partial exercise of the
over-allotment option, and the sale of the Private Placement Warrants, a total
of $275,000,000 was placed in the Trust Account. We incurred $15,556,327 in
transaction costs, including $4,800,000 of underwriting fees, $10,325,000 of
deferred underwriting fees and $431,327 of other offering costs.
At September 30, 2021, we had cash and marketable securities held in the Trust
Account of $275,011,620. We intend to use substantially all of the funds held in
the Trust Account, including any amounts representing interest earned on the
Trust Account, which interest shall be net of taxes payable and excluding
deferred underwriting commissions, to complete our business combination. We may
withdraw interest from the Trust Account to pay taxes, if any. To the extent
that our share capital or debt is used, in whole or in part, as consideration to
complete a 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.
At September 30, 2021, we had cash of $733,020 held outside of the Trust
Account. We intend to use the funds held outside the Trust Account 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, structure, negotiate and complete a business combination.
In order to fund working capital deficiencies or 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 we complete a Business Combination, we may
repay such loaned amounts out of the proceeds of the Trust Account released to
us. In the event that a 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. In November 2021, the Sponsor
committed to provide loans of up to $50,000 to the Company through November 14,
2022, if needed and requested by the Company, which loans will be non-interest
bearing, unsecured and payable upon consummation of a Business Combination.
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 a 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 Business Combination. Moreover, we may need to obtain additional
financing either to complete our Business Combination or because we become
obligated to redeem a significant number of our public shares upon consummation
of our Business Combination, in which case we may issue additional securities or
incur debt in connection with such Business Combination. Subject to compliance
with applicable securities laws, we would only complete such financing
simultaneously with the completion of our Business Combination. If we are unable
to complete our 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 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 September 30, 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 an agreement to pay the Sponsor
a monthly fee of $10,000 for business and administrative support services. We
began incurring these fees from January 14, 2021 and will continue to incur
these fees monthly until the earlier of the completion of the Business
Combination and our liquidation.
The underwriters are entitled to a deferred fee of $0.35 per Unit on the
24,000,000 units sold as part of our Initial Public Offering, or $8,400,000. The
underwriters are also entitled to a deferred fee of $0.55 per unit on the
3,500,000 units sold as part of the underwriters' partial exercise of their
overallotment option, or $1,925,000. The underwriters are entitled to a fee of
$10,325,000 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
the Company completes a Business Combination, subject to the terms of the
underwriting agreement.
Critical Accounting Policies
The preparation of condensed 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 condensed financial statements, and income and
expenses during the periods reported. Actual results could materially differ
from those estimates. We have identified the following critical accounting
policies.
Common Stock Subject to Possible Redemption
We account for our common stock subject to possible redemption in accordance
with the guidance in Accounting Standards Codification ("ASC") Topic 480
"Distinguishing Liabilities from Equity." Class A common stock subject to
mandatory redemption is classified as a liability instrument and measured at
fair value. Conditionally redeemable common stock (including common stock that
features 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) is classified as temporary equity. At all other times, common stock
is classified as stockholders' equity. Our Class A common stock features certain
redemption rights that are considered to be outside of our control and subject
to occurrence of uncertain future events. Accordingly, common stock subject to
possible redemption is presented at redemption value as temporary equity,
outside of the stockholders' equity section of our condensed balance sheets.
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Warrant Liabilities
The Company accounts for warrants as either equity-classified or
liability-classified instruments based on an assessment of the warrant's
specific terms and applicable authoritative guidance in Financial Accounting
Standards Board ("FASB") ASC 480, "Distinguishing Liabilities from Equity" ASC
480 and ASC 815, "Derivatives and Hedging". The assessment considers whether the
warrants are freestanding financial instruments pursuant to ASC 480, meet the
definition of a liability pursuant to ASC 480, and whether the warrants meet all
of the requirements for equity classification under ASC 815, including whether
the warrants are indexed to the Company's own common stock and whether the
warrant holders could potentially require "net cash settlement" in a
circumstance outside of the Company's control, among other conditions for equity
classification. This assessment, which requires the use of professional
judgment, is conducted at the time of warrant issuance and as of each subsequent
quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of
additional paid-in capital at the time of issuance. For issued or modified
warrants that do not meet all the criteria for equity classification, the
warrants are required to be recorded at their initial fair value on the date of
issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of the warrants are recognized as a non-cash gain or loss on the
statements of operations. The fair value of the Public Warrants and Private
Placement Warrants were initially estimated using a Monte Carlo simulation with
subsequent remeasurements of the Public Warrants utilizing the trading stock
price (see Note 10).
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset
or paid for transfer of a liability, in an orderly transaction between market
participants at the measurement date. GAAP establishes a three-tier fair value
hierarchy, which prioritizes the inputs used in measuring fair value. The
hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to unobservable inputs (Level 3 measurements). These tiers
include:
? Level 1, defined as observable inputs such as quoted prices (unadjusted)
for identical instruments in active markets;
? Level 2, defined as inputs other than quoted prices in active markets that
are either directly or indirectly observable such as quoted prices for
similar instruments in active markets or quoted prices for identical or
similar instruments in markets that are not active; and
? Level 3, defined as unobservable inputs in which little or no market data
exists, therefore requiring an entity to develop its own assumptions, such
as valuations derived from valuation techniques in which one or more
significant inputs or significant value drivers are unobservable.
In some circumstances, the inputs used to measure fair value might be
categorized within different levels of the fair value hierarchy. In those
instances, the fair value measurement is categorized in its entirety in the fair
value hierarchy based on the lowest level input that is significant to the fair
value measurement.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments
are derivatives or contain features that qualify as embedded derivatives in
accordance with ASC Topic 815, "Derivatives and Hedging". For derivative
financial instruments that are accounted for as liabilities, the derivative
instrument is initially recorded at its fair value on the grant date and is then
re-valued at each reporting date, with changes in the fair value reported in the
statements of operations. The classification of derivative instruments,
including whether such instruments should be recorded as liabilities or as
equity, is evaluated at the end of each reporting period. Derivative liabilities
are classified in the balance sheet as current or non-current based on whether
or not net-cash settlement or conversion of the instrument could be required
within 12 months of the balance sheet date.
Net Income (Loss) per Common Share
Net loss per common share is computed by dividing net loss by the weighted
average number of common stock outstanding during the period. We apply the
two-class method in calculating net loss per common share. Accretion associated
with the redeemable shares of Class A common stock is excluded from net loss per
common share as the redemption value approximates fair value.
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Recent Accounting Pronouncements
In August 2020, the FASB issued ASU No. 2020-06, "Debt-Debt with Conversion and
Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in our
Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments
and Contracts in an Entity's Own Equity" ("ASU 2020-06"), which simplifies
accounting for convertible instruments by removing major separation models
required under current GAAP. ASU 2020-06 removes certain settlement conditions
that are required for equity contracts to qualify for the derivative scope
exception and it also simplifies the diluted earnings per share calculation in
certain areas. ASU 2020-06 is effective for fiscal years beginning after
December 15, 2023, including interim periods within those fiscal years, with
early adoption permitted. The Company is currently assessing the impact, if any,
that ASU 2020-06 would have on its financial position, results of operations or
cash flows.
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 condensed financial statements.
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