USHG ACQUISITION CORP. References in this Quarterly Report on Form 10-Q (the "Quarterly Report" or this "report") to "we," "us," "our" or the "Company" refer toUSHG Acquisition Corp. References to our "management" or our "management team" refer to our officers and directors, references to the "Sponsor" refer toUSHG Investments, LLC . The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. 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
Some of the statements contained in this Quarterly Report may constitute "forward-looking statements" for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "expect," "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "seek," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report may include, for example, statements about:
• our ability to select an appropriate target business or businesses;
17
--------------------------------------------------------------------------------
Table of Contents
• our ability to complete our initial Business Combination;
• our expectations around the performance of a prospective target business
or businesses;
• 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;
• our potential ability to obtain additional financing to complete our
initial Business Combination;
• our pool of prospective target businesses;
• our ability to consummate an initial Business Combination due to the
uncertainty resulting from the
COVID-19
pandemic;
• the ability of our officers and directors to generate a number of
potential Business Combination opportunities;
• our public securities' potential liquidity and trading;
• the lack of a market for our securities;
• the use of proceeds not held in the Trust Account (as defined below) or
available to us from interest income on the Trust Account balance;
• the Trust Account not being subject to claims of third parties; or
• our financial performance following the Initial Public Offering.
The forward-looking statements contained in this Quarterly Report are based on
our current expectations and beliefs concerning future developments and their
potential effects on us. There can be no assurance that future developments
affecting us will be those that we have anticipated. These forward-looking
statements involve a number of risks, uncertainties (some of which are beyond
our control) or other assumptions that may cause actual results or performance
to be materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include, but are not
limited to, those factors described under the section entitled "
Risk Factors
" in our Annual Report on Form
10-K
for the year ended December 31, 2021 as filed with the SEC on March 14, 2022
("Annual Report") and this Quarterly Report. Should one or more of these risks
or uncertainties materialize, or should any of our assumptions prove incorrect,
actual results may vary in material respects from those projected in these
forward-looking statements. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, except as may be required under applicable securities laws.
Overview
We are a blank check company incorporated on
Our Sponsor is
Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement (the "Private Placement") of 1,333,333 warrants (each, a
"Private Placement Warrant" and collectively, the "Private Placement Warrants")
at a price of
Upon the closing of the Initial Public Offering and the Private Placement,$287.5 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering was held in a trust account ("Trust Account") located inthe United States withAmerican Stock Transfer & Trust Company, LLC acting as trustee, and invested only inUnited States "government securities" within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the "Investment Company Act") having a maturity of 180 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, as determined by us, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account. 18
--------------------------------------------------------------------------------
Table of Contents
If we are unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering, orMarch 1, 2023 , 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 our taxes (less up to$100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders' rights as stockholders (including the right to receive further liquidating distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations underDelaware law to provide for claims of creditors and the requirements of other applicable law.
Recent Developments
On
Upon the terms and subject to the conditions set forth in the Investment
Agreement, at the effective time of the Merger (the "Effective Time"), each
issued and outstanding share of the Company's Class A common stock and each
issued and outstanding share of the Company's Class B common stock will be
converted into the right to receive a number of shares of Panera's common stock,
par value
The consummation of the proposed Transactions (as defined in the Investment Agreement) is subject to the receipt of the requisite approval of the stockholders of the Company (such approval, the "HUGS stockholder approval") and the fulfillment of certain other conditions, including the consummation of Panera's initial public offering of Panera Common Stock (the "Panera IPO").
Results of Operations
We have neither engaged in any operations (other than searching for a Business Combination after the Initial Public Offering) nor generated any revenues to date. We do not expect to generate any operating revenues until after the completion of our Business Combination. We expect to generate non-operating income in the form of interest income on cash and cash equivalents. 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
For the three months ended
19
--------------------------------------------------------------------------------
Table of Contents Related Party Transactions Founder Shares
On
The initial stockholders agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of:
(A) one year after the completion of our initial Business Combination and (B) subsequent to our initial Business Combination, (x) if the closing price of our Class A common stock equals or exceeds$12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial Business Combination (provided that the 30-trading day must be completed prior to any such transfer, assignment or sale), or (y) the date on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our public stockholders having the right to exchange their shares of our Class A common stock for cash, securities or other property.
Private Placement Warrants
Simultaneously with the closing of the Initial Public Offering, we consummated
the Private Placement of 1,333,333 Private Placement Warrants to the Sponsor,
each exercisable to purchase one share of Class A common stock at
Each Private Placement Warrant is exercisable for one whole share of Class A
common stock at a price of
The purchasers of the Private Placement Warrants agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants (except to permitted transferees) until 30 days after the completion of the initial Business Combination.
Related Party Loans
Affiliates of our Sponsor agreed to loan us up to$300,000 that were used for a portion of the expenses of the Initial Public Offering. As ofFebruary 4, 2021 , we borrowed all$300,000 available under the promissory note with affiliates of our Sponsor. These loans were non-interest bearing, unsecured and were due at the earlier ofDecember 31, 2021 and the closing of our Initial Public Offering. The loan was repaid in full onFebruary 26, 2021 .
On
In addition, in order to finance transaction costs in connection with a Business
Combination, our Sponsor or an affiliate of the Sponsor, or certain of our
officers and directors may, but are not obligated to, provide us with Working
Capital Loans. If we complete a Business Combination, we would repay the Working
Capital Loans out of the proceeds of the Trust Account released to us.
Otherwise, the Working Capital Loans would be repaid only out of funds held
outside the Trust Account. 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. The Working Capital Loans would either
be repaid upon consummation of a Business Combination or, at the lender's
discretion, up to
20
--------------------------------------------------------------------------------
Table of Contents Commitments and Contingencies Registration Rights
The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans) are entitled to registration rights pursuant to a registration rights agreement entered into prior to the closing of the Initial Public Offering. The holders of these securities may at any time, and from time to time, request in writing that the Company register the resale of any or all of these securities on Form S-3 or any similar short form registration statement that may be available at such time; provided, however, that the Company shall not be obligated to effect such request through an underwritten offering. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters are entitled to a deferred fee of
Administrative Services Agreement
We entered into an Administrative Services Agreement pursuant to which the
Company paid and will pay an affiliate of the Sponsor a total of
Independent Financial Advisory Services
Critical Accounting Estimates
The preparation of unaudited condensed financial statements and related
disclosures in conformity with accounting principles generally accepted in
Investments Held in the Trust Account
Our portfolio of investments held in the Trust Account is comprised of
21
--------------------------------------------------------------------------------
Table of Contents
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in
accordance with the guidance in Accounting Standards Codification Topic 480
"Distinguishing Liabilities from Equity." Shares of Class A common stock subject
to mandatory redemption (if any) are classified as liability instruments and are
measured at fair value. Conditionally redeemable shares of Class A common stock
(including shares of Class A common stock 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 common stock are
classified as stockholders' equity. Our shares of Class A common stock feature
certain redemption rights that are considered to be outside of our control and
subject to the occurrence of uncertain future events. Accordingly, as of
The Class A common stock subject to possible redemption reflected on the balance
sheet as of
Gross proceeds$ 287,500,000
Less:
Proceeds allocated to public warrants (13,129,167 ) Class A common stock offering costs at closing (15,845,671 )
Additional offering costs incurred during the three months ended
(42,160 )
Plus:
Total accretion of carrying value to redemption value 29,016,998 Class A common stock subject to possible redemption$ 287,500,000
Net Income Per Share of Common Stock
We comply with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." Net income per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. We have not considered the effect of the warrants sold in the Initial Public Offering and Private Placement in the calculation of diluted income per share, because the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
Derivative Warrant Liabilities
The Company accounts for the warrants in accordance with the guidance contained in ASC 815-40-15-7D and 7F under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company's statement of operations. The Private Placement Warrants are valued using a Modified Black Scholes Option Pricing Model.
Recent accounting standards
InAugust 2020 , theFinancial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) ("ASU 2020-06") to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity's own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity's own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effectiveJanuary 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning onJanuary 1, 2021 . Management is currently evaluating the new guidance but does not expect the adoption of this guidance to have a material impact on the Company's financial statements.
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 unaudited condensed financial statements.
22
--------------------------------------------------------------------------------
Table of Contents Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as ofMarch 31, 2022 .
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" and under the JOBS Act are 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 a result, the financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of 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 controls over financial reporting pursuant to Section 404, (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
© Edgar Online, source
