The accompanying notes are an integral part
of the condensed financial statements.
The accompanying notes are an integral part
of the condensed financial statements.
The accompanying notes are an integral part
of the condensed financial statements.
The accompanying notes are an integral part
of the condensed financial statements.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Note 1 — Organization and Business Operation
Viveon Health Acquisition Corp. (the “Company”)
is a newly organized blank check company incorporated as a Delaware company on August 7, 2020. The Company was formed for the purpose
of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar
business combination with one or more businesses or entities (“Initial Business Combination”). The Company has not
selected any specific business combination target and the Company has not, nor has anyone on its behalf, initiated any substantive
discussions, directly or indirectly, with any business combination target with respect to the Initial Business Combination.
As of September 30, 2020, the Company had
not commenced any operations. All activity for the period from August 7, 2020 (inception) through September 30, 2020 relates to
the Company’s formation and the proposed initial public offering (“Initial Public Offering” or “IPO”),
described below. The Company will not generate any operating revenues until after the completion of its Initial Business Combination,
at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from
the proceeds derived from the IPO.
The Company’s sponsor is Viveon Health
LLC, a Delaware limited liability company (the “Sponsor”).
Subsequent
to September 30, 2020, the registration statement for the Company’s IPO was declared effective by the U.S. Securities
and Exchange Commission (the “SEC”) on December 22, 2020 (the
“Effective Date”). On December 28, 2020, the Company consummated the IPO of 17,500,000 units (the “Units”
and, with respect to the common stock included in the Units being offered, the “public share”, the warrants included
in the Units, the “public warrants” and the rights included in the Units, the “rights”)), at $10.00 per
Unit, generating gross proceeds of $175,000,000, which is discussed in Note 3. Simultaneously with the closing of the IPO, the
Company consummated the sale of 18,000,000 warrants (the “Private Warrants”), at a price of $0.50 per Private Warrant,
which is discussed in Note 4.
Transaction costs of the IPO amounted to
$10,108,281 consisting of $3,500,000 of underwriting discount $6,125,000 of deferred underwriting discount, and $483,281 of other
offering costs.
Following the closing of the IPO on December
28, 2020, $176,750,000 (approximately $10.10 per Unit) from net offering proceeds of the sale of the Units in the IPO and the sale
of the Private Warrants was placed in a trust account (the “Trust Account”) and invested in U.S. government securities,
with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company
Act, which invest only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held
in the Trust Account that may be released to the Company to pay its tax obligations, the proceeds from the IPO will not be released
from the Trust Account until the earliest to occur of (1) the completion of the Company’s Initial Business Combination within
15 months and (2) the Company’s redemption of 100% of the outstanding public shares if the Company has not completed a business
combination in the required time period.
The Company has selected December 31 as
its fiscal year end.
The Company’s management has broad
discretion with respect to the specific application of the net proceeds of the IPO, although substantially all of the net proceeds
are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be
able to complete a Business Combination successfully. The Company must complete one or more Initial Business Combinations having
an aggregate fair market value of at least 80% of the assets held in the Trust Account (as defined below) (net of amounts disbursed
to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting commissions) at
the time of the agreement to enter into the Initial Business Combination. However, the Company will only complete a Business Combination
if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
an interest in the target sufficient for it not to be required to register as an investment company under the Investment Company
Act 1940, as amended (the “Investment Company Act”).
In connection with any proposed Initial
Business Combination, the Company will either (1) seek stockholder approval of such Initial Business Combination at a meeting
called for such purpose at which public stockholders may seek to convert their public shares, regardless of whether they vote for
or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account
(net of taxes payable) or (2) provide its public stockholders with the opportunity to sell their public shares to the Company
by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the
aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described
herein.
If the Company determines to engage in
a tender offer, such tender offer will be structured so that each public stockholder may tender any or all of his, her or its public
shares rather than some pro rata portion of his, her or its shares. If enough stockholders tender their shares so that the Company
is unable to satisfy any applicable closing condition set forth in the definitive agreement related to its Initial Business Combination,
or the Company is unable to maintain net tangible assets of at least $5,000,001, the Company will not consummate such Initial Business
Combination. The decision as to whether it will seek stockholder approval of a proposed business combination or will allow stockholders
to sell their shares to the Company in a tender offer will be made by the Company based on a variety of factors such as the timing
of the transaction or whether the terms of the transaction would otherwise require us to seek stockholder approval.
If the Company provides stockholders with
the opportunity to sell their shares to it by means of a tender offer, it will file tender offer documents with the SEC which will
contain substantially the same financial and other information about the Initial Business Combination as is required under the
SEC’s proxy rules. If the Company seeks stockholder approval of its Initial Business Combination, the Company will consummate
the business combination only if a majority of the outstanding shares of common stock present in person or by proxy at a meeting
of the Company are voted in favor of the business combination.
The common stock subject to redemption
will be recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with Accounting
Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company
will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of
a Business Combination.
Notwithstanding the foregoing redemption
rights, if the Company seeks stockholder approval of its Initial Business Combination and the Company does not conduct redemptions
in connection with its Initial Business Combination pursuant to the tender offer rules, the Amended and Restated Certificate of
Incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with
whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act),
will be restricted from redeeming its shares with respect to more than an aggregate of 20% of the shares sold in this offering,
without the Company’s prior consent. The Company’s sponsor, officers and directors (the “initial stockholders”)
have agreed not to propose any amendment to the Amended and Restated Certificate of Incorporation (a) that would modify the
substance or timing of the Company’s obligation to provide for the redemption of its public shares in connection with an
Initial Business Combination or to redeem 100% of its public shares if the Company does not complete its Initial Business Combination
within 15 months from the closing of the IPO (the “Combination Period”) or (b) with respect to any other material
provisions relating to stockholders’ rights or pre-Initial Business Combination activity, unless the Company provide its
public stockholders with the opportunity to redeem their shares of common stock in conjunction with any such amendment.
If the Company is unable to complete its
Initial Business Combination within the Combination Period, the Company will: (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible but not more than five business days thereafter, redeem 100% of the
outstanding public shares (including any public units in this offering or any public units or shares that its initial stockholders
or their affiliates purchased in this offering or later acquired in the open market or in private transactions), which will completely
extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably practicable following such redemption, subject to
the approval of the Company’s remaining holders of common stock and its board of directors, proceed to commence a voluntary
liquidation and thereby a formal dissolution of the Company, subject (in the case of (ii) and (iii) above) to its obligations
to provide for claims of creditors and the requirements of applicable law.
The Company’s initial stockholders
agreed to waive their rights to liquidating distributions from the Trust Account with respect to any founder shares held by them
if the Company fails to complete its Initial Business Combination within the Combination Period. However, if the initial stockholders
acquire public shares in or after the IPO, they will be entitled to liquidating distributions from the Trust Account with respect
to such public shares if the Company fails to complete a Business Combination during the Combination Period.
Emerging Growth Company
The Company is an “emerging growth
company”, as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”),
as modified by the Jumpstart Business Startups Act of 2012, ( the “JOBS Act”), and it may take advantage of certain
exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth
companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404
of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and
proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder
approval of any golden parachute payments not previously approved.
In addition, Section 107 of the JOBS
Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in
Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging
growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private
companies. The Company intends to take advantage of the benefits of this extended transition period.
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The
accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions
to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally
included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations
of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a
complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying
unaudited condensed financial statements include all adjustments, consisting of a normal recurring accruals, which are necessary
for a fair presentation of the financial position, operating results and cash flows for the period presented. The accompanying
unaudited condensed financial statements should be read in conjunction with the Company’s final prospectus for its IPO as
filed with the SEC on December 28, 2020, as well as the Company’s Current Reports on Form 8-K, as filed with the
SEC on December 29, 2020 and January 4, 2021. The interim results for the period from August 7, 2020 (inception) through September 30,
2020 are not necessarily indicative of the results to be expected for the period ending December 31, 2020 or for any future
periods.
Use of Estimates
The preparation of financial statements
in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of expenses during the reporting period. Actual results could differ from those estimates.
Deferred Offering Costs
Deferred
offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that are directly
related to the IPO and that will be charged to stockholders’ equity upon the completion of the IPO. Offering costs amounting
to $10,108,281 were charged to shareholders’ equity upon
the completion of the IPO (see Note 1).
As of September 30, 2020, there was $125,000 of costs, classified as deferred offering
costs, in the accompanying unaudited condensed balance sheet.
Concentration of Credit Risk
Financial instruments that potentially
subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may
exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts and management
believes the Company is not exposed to significant risks on such accounts.
Fair Value of Financial Instruments
The fair value of the Company’s assets
and liabilities approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term
nature.
Net Loss Per Share
Net loss per share is computed by dividing
net loss by the weighted average number of common stock outstanding during the period, excluding common stock subject to forfeiture.
Weighted average shares were reduced for the effect of an aggregate of 656,250 shares, after giving retroactive effect to the share
dividend described in Note 8, that are subject to forfeiture if the over-allotment option is not exercised by the underwriters
(see Note 7). On December 30, 2020, the underwriters fully exercised the over-allotment option. As of September 30, 2020, the Company
did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares and then
share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the periods presented.
Income Taxes
The Company follows the asset and liability
method of accounting for income taxes under FASB ASC 740, “Income Taxes”. Deferred tax assets and liabilities are recognized
for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included
the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.
ASC 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken
in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination
by taxing authorities. There were no unrecognized tax benefits as of September 30, 2020. The Company’s management determined
that the United States is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties for
the period from August 7, 2020 (inception) through September 30, 2020. The Company is currently not aware of any issues under review
that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax
examinations by major taxing authorities since inception.
The provision for income taxes was deemed
to be immaterial for the period ending September 30, 2020.
Recent Accounting Pronouncements
Management does not believe that any recently
issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial
statements.
Note
3 — Initial Public Offering
Pursuant to the IPO, the Company sold 17,500,000
Units, (at a price of $10.00 per Unit. Each Unit consists of one share of Common Stock, par value $0.0001 per share one redeemable
warrant (each, a “Public Warrant”) and one right. Each right entitles the holder thereof to receive one-twentieth (1/20)
of a share of common stock upon consummation of our Initial Business Combination. Each Public Warrant entitles the holder to purchase
one-half (1/2) of a share of Common Stock at a price of $11.50 per whole share subject to adjustment as described in the prospectus.
The Company will not issue fractional shares. As a result, public stockholders must exercise public warrants in multiples of two
warrants. Each warrant will become exercisable on the later of one year after the closing of this offering or the consummation
of an Initial Business Combination, and will expire five years after the completion of the Initial Business Combination, or earlier
upon redemption or liquidation.
Note 4 — Private Placement
Simultaneously with the closing of the
IPO, the Sponsor purchased an aggregate of 18,000,000 warrants at a price of $0.50 per warrant ($9,000,000 in the aggregate),
each exercisable to purchase one-half of a share common stock at a price of $11.50 per whole share, in a private placement that
closed simultaneously with the closing of this offering. A portion of the purchase price of the private placement warrants was
added to the proceeds from this offering to be held in the Trust Account.
Note 5 — Related Party Transactions
Founder Shares
On August 28, 2020, the Sponsor paid $25,000,
or approximately $0.007 per share, to cover certain offering costs in consideration for 3,593,750 shares of common stock, par
value $0.0001 (the “Founder Shares”). On December 3, 2020, the Company declared a share dividend of $0.36 for each
outstanding share, resulting in 4,887,500 shares outstanding, and on December 22, 2020, the Company declared a share dividend
of $0.03 resulting in 5,031,250 shares which includes an aggregate of up to 656,250 shares that are subject to forfeiture to the
extent that the underwriters’ over-allotment option is not exercised in full or in part, and up to an aggregate of 1,006,250
shares of common stock (or 875,000 shares of common stock to the extent that the underwriters’ over-allotment is not exercised,
pro rata) that are subject to forfeiture to the extent that rights are exercised upon consummation of an Initial Business Combination
(see Note 8). The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the underwriters
so that the Founder Shares will represent 20.0% of the Company’s issued and outstanding stock after the IPO. If the Company
increases or decreases the size of the offering, the Company will affect a share capitalization or share contribution back to
capital, as applicable, immediately prior to the consummation of the IPO in such amount as to maintain the Founder Share ownership
of the Company’s stockholders prior to the IPO at 20.0% of the Company’s issued and outstanding common stock upon
the consummation of the IPO. In connection with the underwriters’ full exercise of their over-allotment option on December
30, 2020, the 656,250 founder shares were no longer subject to forfeiture.
On the date of the offering, the founder
shares were placed into an escrow account maintained by Continental Stock Transfer & Trust Company acting as escrow agent.
50% of these shares will not be transferred, assigned, sold or released from escrow until the earlier of (i) 6 months after the
date of the consummation of the Company’s Initial Business Combination or (ii) the date on which the closing price of
the Company’s shares of common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations
and recapitalizations) for any 20 trading days within any 30-trading day period commencing after its Initial Business Combination
and the remaining 50% of the founder shares will not be transferred, assigned, sold or released from escrow until 6 months after
the date of the consummation of the Company’s Initial Business Combination, or earlier, in either case, if, subsequent to
its Initial Business Combination, the Company consummates a subsequent liquidation, merger, stock exchange or other similar transaction
which results in all of its stockholders having the right to exchange their shares of common stock for cash, securities or other
property.
During the escrow period, the holders of
these shares will not be able to sell or transfer their securities except (1) to any persons (including their affiliates and
stockholders) participating in the private placement of the private warrants, officers, directors, stockholders, employees and
members of the Company’s sponsor and its affiliates, (2) amongst initial stockholders or their respective affiliates,
or to the Company’s officers, directors, advisors and employees, (3) if a holder is an entity, as a distribution to
its, partners, stockholders or members upon its liquidation, (4) by bona fide gift to a member of the holder’s immediate
family or to a trust, the beneficiary of which is a holder or a member of a holder’s immediate family, for estate planning
purposes, (5) by virtue of the laws of descent and distribution upon death, (6) pursuant to a qualified domestic relations
order, (7) by certain pledges to secure obligations incurred in connection with purchases of the Company’s securities,
(8) by private sales at prices no greater than the price at which the shares were originally purchased or (9) for the
cancellation of up to 656,250 shares of common stock subject to forfeiture to the extent that the underwriters’ over-allotment
is not exercised in full or in part or in connection with the consummation of the Company’s Initial Business Combination,
in each case (except for clause 9 or with the Company’s prior consent) where the transferee agrees to the terms of the escrow
agreement and the insider letter.
Promissory Note — Related Party
The Sponsor agreed to loan the Company
an aggregate of up to $300,000 to cover expenses related to the IPO pursuant to a promissory note (the “Note”). This
loan is non-interest bearing and payable on the earlier of March 31, 2021 or the completion of the IPO. The Company intends to
repay the promissory note from the proceeds of the Proposed Offering not being placed in the Trust Account. As of September 30,
2020, the Company has drawn down $100,000 under the promissory note.
Working Capital Loans
In addition, in order to finance transaction
costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s
officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”).
Each loan would be evidenced by a promissory note. The notes would be repaid upon consummation of the Company’s Initial Business
Combination, without interest. As of September 30, 2020, the Company had no borrowings under the Working Capital Loans.
Administrative Support Agreement
Commencing on the date of the final prospectus,
the Company has agreed to pay the Sponsor a total of $20,000 per month for office space, utilities and secretarial support. Upon
completion of the Initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly
fees.
Note 6 — Commitments & Contingencies
Registration Rights
The holders of the Company’s insider
shares issued and outstanding on the date of this prospectus, as well as the holders of the private warrants (and underlying securities)
will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of this offering.
The holders of a majority of these securities are entitled to make up to two demands that the Company registers such securities.
The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three
months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the
private warrants (and underlying securities) can elect to exercise these registration rights at any time after the Company consummates
a business combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration
statements filed subsequent to the Company’s consummation of a business combination. The Company will bear the expenses incurred
in connection with the filing of any such registration statements.
Underwriting Agreement
The
underwriter had a 45-day option beginning December 28, 2020 to purchase up to an additional 2,625,000 additional Units
to cover over-allotments. On December 30, 2020, the underwriters purchased 2,625,000 Over-Allotment Units fully exercising
the Over-Allotment Option. The Over-Allotment Units were sold at an offering price of $10.00 per Over-Allotment Unit, generating
additional gross proceeds of $26,250,000 to the Company. The underwriters
were paid an underwriting discount of $0.2 per unit, or $4.02 million upon the closing of the IPO and the full exercise of the
Over-Allotment Option. Additionally, a deferred underwriting discount
of $0.35 per unit, or $6.13 million in the aggregate (or $7.04 million in the aggregate if the underwriters’ over-allotment
option is exercised in full) will be 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.
Risks and Uncertainties
Management is currently evaluating the
impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have
a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the
specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Note 7 — Stockholder’s Equity
Preferred Stock — The
Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 and with such designations, voting
and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of September
30, 2020, there was no preferred stock issued or outstanding.
Common Stock — The
Company is authorized to issue 60,000,000 shares of common stock with a par value of $0.0001 per share. On December 22, 2020, the
Company amended its Certificate of Incorporation and increased its authorized shares to 60,000,000 shares of common stock. Holders
are entitled to one vote for each share of common stock. After giving retroactive effect to the share dividends described in Note
8, there were 5,031,250 common stock issued and outstanding as of September 30, 2020.
Warrants — The Public
Warrants will become exercisable on the later of one year after the closing of this offering or the consummation of an Initial
Business Combination, and will expire five years after the completion of an Initial Business Combination, or earlier upon redemption.
The Company may call the Public Warrants
for redemption:
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in whole and not in part;
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at a price of $0.01 per warrant;
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upon not less than 30 days’ prior written
notice of redemption (the “30-day redemption period”) to each warrant holder; and
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if, and only if, there is a current registration statement
in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30-day
trading period referred to above and continuing each day thereafter until the date of redemption.
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If the Company calls the warrants for redemption
as described above, its management will have the option to require all holders that wish to exercise warrants to do so on a “cashless
basis.” In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of
common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying
the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined
below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of
the Company’s common stock for the 10 trading days ending on the third trading day prior to the date on which the notice
of redemption is sent to the holders of warrants. Whether the Company will exercise our option to require all holders to exercise
their warrants on a “cashless basis” will depend on a variety of factors including the price of our common shares at
the time the warrants are called for redemption, its cash needs at such time and concerns regarding dilutive share issuances.
If (x) the Company issues additional
shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of its Initial Business
Combination at an issue price or effective issue price of less than $9.50 per share of common stock (with such issue price or effective
issue price to be determined in good faith by its board of directors, and in the case of any such issuance to its sponsor, initial
stockholders or their affiliates, without taking into account any founders’ shares held by them prior to such issuance),
(y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon,
available for the funding of our Initial Business Combination on the date of the consummation of our Initial Business Combination
(net of redemptions), and (z) the Market Value is below $9.50 per share, the exercise price of the warrants will be adjusted
(to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the price at which the Company
issues the additional shares of common stock or equity-linked securities and the $16.50 per share redemption trigger price described
above will be adjusted (to the nearest cent) to be equal to 165% of the Market Value. The warrants may be exercised upon surrender
of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the
reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price,
by certified or official bank check payable to the Company, for the number of warrants being exercised. The warrant holders do
not have the rights or privileges of holders of shares of common stock and any voting rights until they exercise their warrants
and receive shares of common stock. After the issuance of shares of common stock upon exercise of the warrants, each holder will
be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
Rights —
Except in cases where the Company is not
the surviving company in a business combination, each holder of a right will automatically receive one-twentieth (1/20) of a share
of common stock upon consummation of our Initial Business Combination. In the event the Company will not be the surviving company
upon completion of our Initial Business Combination, each holder of a right will be required to affirmatively convert his, her
or its rights in order to receive the one-twentieth (1/20) of a share underlying each right upon consummation of the business combination.
The Company cannot issue fractional shares in connection with an exchange of rights. Fractional shares will either be rounded down
to the nearest whole share or otherwise addressed in accordance with the applicable provisions of the Delaware General Corporation
Law. As a result, holders must hold rights in multiples of 20 in order to receive shares for all rights upon closing of a business
combination. If the Company is unable to complete an Initial Business Combination within the required time period and the Company
redeems the public shares for the funds held in the trust account, holders of rights will not receive any of such funds for their
rights and the rights will expire worthless.
Note 8 — Subsequent Events
The notes to the financial statements include
a discussion of material events, if any, which have occurred subsequent to (referred to as “subsequent events”) the
date these financial statements were issued. Management has evaluated the subsequent events through this date and has concluded
that no other material subsequent events have occurred that require additional adjustment or disclosure in the financial statements.
On December 3, 2020, the Company declared
a share dividend of $0.36 for each outstanding share, resulting in 4,887,500 shares outstanding, and on December 22, 2020 the
Company declared a share dividend of $0.03, resulting in 5,031,250 shares outstanding. All shares and associated amounts have
been retroactively restated.
The Sponsor agreed to loan the Company
an aggregate of up to $300,000 to cover expenses related to the IPO pursuant to a promissory note, dated August 8, 2020 (the “Note”).
The Note was amended and restated on December 18, 2020 to increase the amount of the loan to $500,000.
On December 22, 2020, the Company amended
its Certificate of Incorporation and increased its authorized shares to 60,000,000 shares of common stock.
On December 28, 2020, the Company consummated
the IPO of 17,500,000 Units at $10.00 per Unit, generating gross proceeds of $175,000,000. Each Unit consists of one share of common
stock, par value $0.0001, one warrant to purchase one-half of one share of common stock, and one right to receive one-twentieth
(1/20) of a share of common stock upon the consummation of an Initial Business Combination.
In connection with the IPO, the underwriters
were granted a 45-day option from the date of the prospectus (the “Over-Allotment Option”) to purchase up to 2,625,000
additional units to cover over-allotments (the “Over-Allotment Units”), if any. On December 30, 2020, the underwriters
purchased 2,625,000 Over-Allotment Units fully exercising the Over-Allotment Option. The Over-Allotment Units were sold at an offering
price of $10.00 per Over-Allotment Unit, generating additional gross proceeds of $26,250,000 to the Company.
Simultaneously with the closing of the
IPO, the Company consummated a private placement with Viveon Health LLC, its sponsor, of 18,000,000 warrants (the “Private
Warrants”), at a price of $0.50 per Private Warrant, exercisable to purchase 9,000,000 shares of Common Stock, generating
total proceeds of $9,000,000.