Proposed Business Combination
On September 30, 2020, we entered into an Agreement and Plan of Merger, by and among the Company, Rx Merger Sub, Inc., a
Delaware corporation (Merger Sub), and Hims, Inc., a Delaware corporation (Hims). The Merger Agreement provides for, among other things, the merger of Merger Sub with and into Hims, with Hims continuing as the surviving
company, as further described in Note 1 to the financial statement included in Item 1 of this Quarterly Report on Form 10-Q. The proposed transaction is expected to close in the fourth quarter of 2020,
following the receipt of the required approval by the Companys shareholders and the fulfillment of other customary closing conditions.
Results
of Operations
Our entire activity since inception through September 30, 2020 related to our formation, the
preparation for the initial public offering, and since the closing of the initial public offering, the search for a prospective initial business combination. We have neither engaged in any operations nor generated any revenues to date. We will
not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash
equivalents. We expect to 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.
For the three months ended September 30, 2020, we had a net loss of approximately $2.2 million, which consisted of
approximately $81,000 in gain on investments (net), dividends and interest, held in the trust account, offset by approximately $2.3 million in general and administrative expenses.
For the three months ended September 30, 2019, we had net income of approximately $436,000, which consisted of
approximately $886,000 in gain on investments (net), dividends and interest, held in the Trust Account, offset by approximately $450,000 in general and administrative costs.
For the nine months ended September 30, 2020, we had a net loss of approximately $1.0 million, which consisted of
approximately $1.7 million in gain on investments (net), dividends and interest, held in the trust account, offset by approximately $2.7 million in general and administrative expenses
For the period from April 9, 2019 (inception) through September 30, 2019, we had net income of approximately
$419,000, which consisted of approximately $886,000 in gain on investments (net), dividends and interest, held in the Trust Account, offset by approximately $467,000 in general and administrative costs.
Going Concern
Our
unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal
course of business. As of September 30, 2020, we had approximately $1.3 million in our operating bank account, negative working capital of approximately $1.7 million, and approximately $3.2 million of interest income available in
the trust account for Regulatory Withdrawals (subject to an annual limit of $325,000) and for our tax obligations, if any. We will use these funds 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, and structure,
negotiate and complete a business combination.
Our liquidity needs to date have been satisfied prior to the completion of
the initial public offering through receipt of a $25,000 capital contribution from our sponsor in exchange for the issuance of the Founder Shares to our sponsor, the advancement of funds by our sponsor of approximately $62,000 to us to cover
for offering costs in connection with the initial public offering, and the proceeds from the consummation of the private placement not held in the trust account. On November 18, 2019, we repaid the advance in full to our sponsor. In
addition, in order to finance transaction costs in connection with a business combination, our sponsor or an affiliate of our sponsor, or our officers and directors may, but are not obligated to, provide us working capital loans. As of
September 30, 2020, there were no amounts outstanding under any working capital loan.
We continue to evaluate 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 our financial position, results of our 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.
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