Cayman Islands
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6770
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98-1586159
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(State or other jurisdiction of
incorporation or organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification Number) |
Raaj S. Narayan, Esq.
Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 (212)
403-1000
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Jacqueline Studer, Esq.
Chief Legal Officer Akili Interactive Labs, Inc. 125 Broad Street, Fifth Floor Boston, Massachusetts 02110 (617)
313-8853
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Daniel J. Espinoza, Esq.
Arthur R. McGivern, Esq.
Sarah Ashfaq, Esq.
Goodwin Procter LLP
100 Northern Avenue Boston, Massachusetts 02210 (617)
570-1000
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Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer
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☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
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Prior to the consummation of the Merger described herein, the registrant intends to effect a deregistration under the Cayman Islands Companies Act (2020 Revision) and a domestication under Section 388 of the Delaware General Corporation Law, pursuant to which the registrant’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware. All securities being registered will be issued by Social Capital Suvretta Holdings Corp. I (after its domestication as a corporation incorporated in the State of Delaware), the continuing entity following the Domestication, which will be renamed “Akili, Inc.”
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each share of Akili common stock will be canceled and converted into the right to receive a number of shares of Akili, Inc. common stock equal to the quotient obtained by dividing (i) the Aggregate Merger Consideration by (ii) the aggregate fully diluted number of shares of Akili common stock issued and outstanding immediately prior to the Merger as calculated pursuant to the Merger Agreement (such quotient, the “Merger Consideration Per Fully Diluted Share”);
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each share of Akili Series
A-1
Preferred Stock, Akili Series
A-2
Preferred Stock, Akili Series B Preferred Stock, Akili Series C Preferred Stock and Akili Series D Preferred Stock (collectively, the “Akili preferred stock”) will be canceled, converted into shares of Akili common stock and converted into the right to receive a pro rata portion of the Aggregate Merger Consideration, after giving effect to the appropriate conversion ratios; and
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if not previously paid, any dividend accrued on the Akili Series D Preferred Stock for a partial period will convert or be paid, as applicable, in additional shares of Akili Series D Perferred Stock at the Akili Series D Preferred Stock purchase price upon the consummation of the Merger. Dividends accrue on the Akili Series D Preferred at an annual rate of 10% and are to be paid annually in additional shares of Akili Series D Preferred Stock at the Series D Preferred Stock purchase price.
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each share of Akili common stock will be canceled and converted into the right to receive a number of shares of Akili, Inc. common stock equal to the quotient obtained by dividing (i) the Aggregate Merger Consideration by (ii) the aggregate fully diluted number of shares of Akili common stock issued and outstanding immediately prior to the Merger as calculated pursuant to the Merger Agreement (such quotient, the “Merger Consideration Per Fully Diluted Share”);
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each share of Akili Series
A-1
Preferred Stock, Akili Series
A-2
Preferred Stock, Akili Series B Preferred Stock, Akili Series C Preferred Stock and Akili Series D Preferred Stock (collectively, the “Akili preferred stock”) will be canceled, converted into shares of Akili common stock and converted
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into the right to receive a pro rata portion of the Aggregate Merger Consideration, after giving effect to the appropriate conversion ratios; and
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if not previously paid, any dividend accrued on the Akili Series D Preferred Stock for a partial period will convert or be paid, as applicable, in additional shares of Akili Series D Perferred Stock at the Akili Series D Preferred Stock purchase price upon the consummation of the Merger. Dividends accrue on the Akili Series D Preferred at an annual rate of 10% and are to be paid annually in additional shares of Akili Series D Preferred Stock at the Series D Preferred Stock purchase price.
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Proposal No. 1—The Business Combination Proposal—
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Proposal No. 2—The Domestication Proposal—
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Organizational Documents Proposals—
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(A)
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Proposal No. 3—Organizational Documents Proposal A—
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(B)
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Proposal No. 4—Organizational Documents Proposal B—
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(C)
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Proposal No. 5—Organizational Documents Proposal C—
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Proposal No. 6—The Director Appointment Proposal—
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Proposal No. 7—The Stock Issuance Proposal—
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Proposal No. 8—The Incentive Plan Proposal—
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Proposal No. 9—The ESPP Proposal—
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Proposal No. 10—The Auditor Ratification Proposal—
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Proposal No. 11—The Adjournment Proposal—
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(i)
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hold public shares;
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(ii)
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submit a written request to Continental Stock Transfer & Trust Company (“Continental”), SCS’s transfer agent, that Akili, Inc. redeem all or a portion of your public shares for cash;
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(iii)
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deliver your share certificates (if any) and any other redemption forms to Continental, SCS’s transfer agent, physically or electronically through The Depository Trust Company (“DTC”); and
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(iv)
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provide the full name and shares of the beneficial holder.
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“2011 Plan” are to Akili Interactive Labs, Inc. Amended and Restated 2011 Stock Incentive Plan, as amended from time to time;
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“2022 Incentive Plan” or “2022 Plan” are to the 2022 Stock Option and Incentive Plan for Akili, Inc. (following the Domestication) attached to this proxy statement/prospectus as Annex G;
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“2022 ESPP” are to the 2022 Employee Stock Purchase Plan for Akili Interactive Labs, Inc. (following the Domestication) attached to this proxy statement/prospectus as Annex H;
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“Akili common stock” are to common stock, par value $0.00001 per share, of Akili;
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“Akili Options” are to options to purchase shares of Akili common stock;
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“Akili, Inc.” are to SCS after the Domestication and its name change from Social Capital Suvretta Corp. I;
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“Akili, Inc. common stock” are to common stock, par value $0.0001 per share, of Akili, Inc.;
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“Akili, Inc. Options” are to options to purchase shares of Akili, Inc. common stock;
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“Akili, Inc. Restricted Stock” are to restricted shares of Akili, Inc. common stock;
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“Akili Stockholders” are to the stockholders of Akili, holders of Akili Options and holders of warrants to acquire Akili common stock, in each case prior to the Business Combination;
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“ASC” are to Accounting Standards Codification;
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“Available Cash” are to the amount calculated by adding the Trust Amount and the PIPE Investment Amount;
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“Black-Scholes Model” are to the Black-Scholes Option Pricing Model;
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“Business Combination” are to the Domestication together with the Merger;
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“CARES Act” are to the Coronavirus Aid, Relief and Economic Security Act;
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“Cayman Constitutional Documents” are to SCS’s amended and restated memorandum and articles of association, as amended from time to time;
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“Cayman Islands Companies Act” are to the Cayman Islands Companies Act (As Revised);
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“Closing” are to the closing of the Business Combination;
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“Company,” “we,” “us” and “our” are to SCS prior to its domestication as a corporation in the State of Delaware and to Akili, Inc. after its domestication as a corporation incorporated in the State of Delaware, including after its change of name to Akili, Inc.;
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“Condition Precedent Approvals” are to approval at the extraordinary general meeting of each of the Condition Precedent Proposals;
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“Condition Precedent Proposals” are to the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposals, the Director Appointment Proposal, the Stock Issuance Proposal, the Incentive Plan Proposal and the ESPP Proposal, collectively;
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“Continental” are to Continental Stock Transfer & Trust Company;
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“COVID-19”
are to the novel coronavirus pandemic;
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“DGCL” are to the General Corporation Law of the State of Delaware;
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“Domestication” are to the domestication of Social Capital Suvretta Holdings Corp. I as a corporation incorporated in the State of Delaware;
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“Exchange Act” are to the Securities Exchange Act of 1934, as amended;
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“Federal Reserve” are to the Board of Govenors of the Federal Reserve System;
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“founder shares” are to the SCS Class B ordinary shares purchased by the Sponsor in a private placement prior to the initial public offering, and the SCS Class A ordinary shares that will be issued upon the conversion thereof;
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“GAAP” are to accounting principles generally accepted in the United States of America;
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“HSR Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;
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“initial public offering” are to SCS’s initial public offering that was consummated on July 2, 2021;
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“IPO registration statement” are to the Registration Statements on Form
S-1
(333-256723
and
333-257543)
filed by SCS in connection with its initial public offering, which became effective on June 29, 2021 and June 30, 2021, respectively;
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“IRS” are to the U.S. Internal Revenue Service;
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“JOBS Act” are to the Jumpstart Our Business Startups Act of 2012;
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“LIBOR” are to the London Inter-Bank Offered Rate;
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“Merger” are to the merger of Merger Sub with and into Akili, with Akili surviving the merger as a wholly owned subsidiary of Akili, Inc.;
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“Merger Sub” are to a Delaware corporation and subsidiary of SCS;
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“Minimum Cash Condition” are to the Trust Amount and the PIPE Investment Amount, in the aggregate, being equal to or greater than $150 million;
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“Nasdaq” are to the Nasdaq Capital Market;
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“ordinary shares” are to the SCS Class A ordinary shares and the SCS Class B ordinary shares, collectively;
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“Person” are to any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, governmental authority or instrumentality or other entity of any kind;
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“PIPE Investment” are to the purchase of shares of Akili, Inc. common stock pursuant to the Subscription Agreements;
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“PIPE Investment Amount” are to the aggregate gross purchase price received by SCS prior to or substantially concurrently with Closing for the shares in the PIPE Investment;
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“PIPE Investors” are to those certain investors participating in the PIPE Investment pursuant to the Subscription Agreements;
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“private placement shares” are to the Class A ordinary shares issued to Sponsor in a private placement that was consummated concurrently with the closing of the initial public offering and the shares of common stock of Akili, Inc. issued as a matter of law upon the conversion thereof at the time of the Domestication;
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“pro forma” are to giving pro forma effect to the Business Combination;
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“Proposed Bylaws” are to the proposed bylaws of Akili, Inc. upon the effective date of the Domestication attached to this proxy statement/prospectus as Annex K;
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“Proposed Certificate of Incorporation” are to the proposed certificate of incorporation of Akili, Inc. upon the effective date of the Domestication attached to this proxy statement/prospectus as Annex J;
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“Proposed Organizational Documents” are to the Proposed Certificate of Incorporation and the Proposed Bylaws;
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“public shareholders” are to holders of public shares, whether acquired in SCS’s initial public offering or acquired in the secondary market;
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“public shares” are to the SCS Class A ordinary shares that were offered and sold by SCS in its initial public offering and registered pursuant to the IPO registration statement or the shares of Akili, Inc. common stock issued as a matter of law upon the conversion thereof at the time of the Domestication, as the context requires;
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“redemption” are to each redemption of public shares for cash pursuant to the Cayman Constitutional Documents;
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“Registration Rights Agreement” are to the Amended and Restated Registration Rights Agreement to be entered into at the Closing, by and among Akili, Inc. (following the Domestication), the Sponsor, certain affiliates of the Sponsor, certain directors and advisors of SCS and certain former stockholders of Akili;
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“Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002;
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“SCS” are to Social Capital Suvretta Holdings Corp. I, prior to its domestication as a corporation in the State of Delaware;
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“SCS Class A ordinary shares” are to SCS’s Class A ordinary shares, par value $0.0001 per share;
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“SCS Class B ordinary shares” are to SCS’s Class B ordinary shares, par value $0.0001 per share;
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“SEC” are to the United States Securities and Exchange Commission;
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“Securities Act” are to the Securities Act of 1933, as amended;
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“SPE” are to special-purpose entity;
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“Sponsor” are to SCS Sponsor I LLC, a Cayman Islands limited liability company, the sponsor of SCS;
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“Sponsor Related PIPE Investor” are to a PIPE Investor that is an affiliate of the Sponsor (together with its permitted transferees);
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“Sponsor Support Agreement” are to that certain Sponsor Support Agreement, dated January 26, 2022, by and among the Sponsor, SCS, each director of SCS and Akili, as amended and modified from time to time;
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“Subscription Agreements” are to the subscription agreements pursuant to which the PIPE Investment will be consummated;
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“Third-Party PIPE Investment” are to any PIPE Investment made by a Third-Party PIPE Investor;
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“Third-Party PIPE Investment Amount” are to the aggregate gross purchase price received by SCS prior to or substantially concurrently with Closing for the shares in the Third-Party PIPE Investment;
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“Third-Party PIPE Investor” are to any PIPE Investor who is not a Sponsor Related PIPE Investor;
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“trust account” are to the trust account established at the consummation of SCS’s initial public offering and maintained by Continental, acting as trustee;
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“Trust Agreement” are to the Investment Management Trust Agreement, dated June 29, 2021, by and between SCS and Continental, as trustee;
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“Trust Amount” are to the amount of cash available in the trust account, after deducting the amount required to satisfy SCS’s obligations to its shareholders (if any) that exercise their rights to redeem their public shares pursuant to the Cayman Constitutional Documents (but prior to the payment of any
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(i) deferred underwriting commissions being held in the trust account and (ii) transaction expenses of Akili or SCS); and
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“VIEs” are to variable interest entities.
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our ability to complete the Business Combination with Akili or, if we do not consummate such Business Combination, any other initial business combination;
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satisfaction or waiver of the conditions to the Business Combination including, among others: (i) obtaining the approval of the Business Combination and related agreements and transactions by the respective shareholders of SCS and Akili; (ii) effectiveness of the registration statement on Form
S-4
of which this proxy statement/prospectus forms a part; (iii) expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, as amended; (iv) receipt of approval for listing on Nasdaq, the shares of Akili, Inc. common stock to be issued in connection with the Merger; (v) that we have at least $5,000,001 of net tangible assets upon Closing; (vi) the satisfaction of the Minimum Cash Condition; (vii) that the size and composition of the Board shall be as contemplated in the Merger Agreement; (viii) the completion of the Domestication as contemplated by the Merger Agreement; and (ix) the absence of any injunctions;
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the occurrence of any event, change or other circumstances, including the outcome of any legal proceedings that may be instituted against SCS and/or Akili following the announcement of the Merger Agreement and/or the transactions contemplated therein, that could give rise to the termination of the Merger Agreement;
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the prospective financial information with respect to, and market opportunity of, Akili, Inc.;
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the ability to obtain and/or maintain the listing of Akili, Inc. common stock on Nasdaq, and the potential liquidity and trading of such securities;
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the risk that the proposed Business Combination disrupts current plans and operations of Akili as a result of the announcement and consummation of the proposed Business Combination;
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the ability to recognize the anticipated benefits of the proposed Business Combination, which may be affected by, among other things, competition, and the ability of the Akili, Inc. to grow and manage growth profitably and retain its key employees;
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costs related to the proposed Business Combination;
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Akili’s success in retaining or recruiting its officers, key employees or directors following the completion of the Business Combination;
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Akili’s officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business;
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SCS’s officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business;
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The ability to achieve and maintain market acceptance and adoption of Akili’s EndeavorRx and other prescription digital therapeutics by patients and physicians;
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Akili’s ability to obtain or maintain adequate insurance coverage and reimbursement for EndeavorRx and its other products;
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Akili’s ability to accurately forecast demand for EndeavorRx and its other products;
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Akili’s ability to maintain access for EndeavorRx and its other products via the Apple Store and the Google Play Store;
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Akili’s ability to achieve or maintain profitability;
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Akili’s ability to maintain or obtain patent protection and/or the patent rights relating to EndeavorRx and its other product candidates and Akili’s ability to prevent third parties from competing against Akili;
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Akili’s ability to successfully commercialize EndeavorRx and its other products;
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Akili’s ability to obtain and maintain regulatory approval for EndeavorRx and its other product candidates, in the U.S. and in foreign markets, and any related restrictions or limitations of an approved product candidate;
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Akili’s ability to obtain funding for its operations, including funding necessary to complete further development of EndeavorRx and further development, approval and, if approved, commercialization of Akili’s other product candidates;
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Akili’s ability to identify,
in-license
or acquire additional technology or product candidates;
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Akili’s ability to successfully protect against security breaches and other disruptions to Akili’s information technology structure;
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the impact of applicable laws and regulations, whether in the United States or foreign jurisdictions, and any changes thereof;
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Akili’s ability to successfully compete against other companies developing similar products to Akili’s current and future product offerings;
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Akili’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
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Akili’s financial performance and ability to respond to general economic conditions;
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the effect of
COVID-19
on the foregoing, including our ability to consummate the Business Combination due to the continuing uncertainty resulting from the
COVID-19
pandemic; and
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other factors detailed under the section entitled “
Risk Factors
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Q:
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Why am I receiving this proxy statement/prospectus?
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A: |
SCS shareholders are being asked to consider and vote upon, among other proposals, a proposal to approve and adopt the Merger Agreement and approve the Business Combination. The Merger Agreement provides for, among other things, the merger of Merger Sub with and into Akili, with Akili surviving the merger as a wholly owned subsidiary of Akili, Inc., in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus. See the section entitled “
Business Combination Proposal
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What proposals are shareholders of SCS being asked to vote upon?
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At the extraordinary general meeting, SCS is asking holders of ordinary shares to consider and vote upon:
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a proposal to approve by ordinary resolution and adopt the Merger Agreement;
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a proposal to approve by special resolution the Domestication;
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the following three separate proposals to approve by special resolution the following material differences between the Cayman Constitutional Documents and the Proposed Organizational Documents:
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to authorize the change in the authorized share capital of SCS from (i) 500,000,000 SCS Class A ordinary shares, 50,000,000 SCS Class B ordinary shares and 5,000,000 preference shares, par value $0.0001 per share, to (ii) shares of Akili, Inc. common stock, and shares of Akili, Inc. preferred stock;
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to authorize the board of directors of Akili, Inc. (the “Board”) to issue any or all shares of Akili, Inc. preferred stock in one or more classes or series, with such terms and conditions as may be expressly determined by the Board and as may be permitted by the DGCL; and
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to authorize all other changes in connection with the replacement of the Cayman Constitutional Documents with the Proposed Certificate of Incorporation and Proposed Bylaws as part of the Domestication, including, (1) changing the corporate name from “Social Capital Suvretta Holdings Corp. I” to “Akili, Inc.,” (2) making Akili, Inc.’s corporate existence perpetual, (3) adopting Delaware as the exclusive forum for certain stockholder litigation and the United States Federal District Courts as the exclusive forum for litigation arising out of the Securities Act, (4) being subject to the provisions of Section 203 of DGCL and (5) removing certain provisions related to SCS’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which SCS’s board of directors believes is necessary to adequately address the needs of Akili, Inc. after the Business Combination;
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a proposal to approve by ordinary resolution the appointment to a staggered board of nine directors, who, upon consummation of the Business Combination, will be the directors of Akili, Inc.;
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a proposal to approve by ordinary resolution, for purposes of complying with applicable listing rules of Nasdaq, the issuance of (a) shares of Akili, Inc. common stock to the PIPE Investors, including the Sponsor Related PIPE Investors, pursuant to the PIPE Investment and (b) shares of Akili, Inc. common stock to the Akili Stockholders pursuant to the Merger Agreement;
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a proposal to approve by ordinary resolution the 2022 Plan;
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a proposal to approve by ordinary resolution the 2022 ESPP;
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a proposal to approve by ordinary resolution the appointment of Marcum LLP as the independent registered public accoutnants of SCS to audit and report upon SCS’s consolidated financial statements for the year ending December 31, 2022; and
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a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting.
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Q:
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Are the proposals conditioned on one another?
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Yes. The Business Combination is conditioned on the approval of each of the Condition Precedent Proposals at the extraordinary general meeting. Unless waived by the parties to the Merger Agreement, each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Auditor Ratification Proposal and Adjournment Proposal are not conditioned upon the approval of any other proposal.
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Q:
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Why is SCS proposing the Business Combination?
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SCS was organized to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination, with one or more businesses or entities.
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Q:
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What will Akili Stockholders receive in return for SCS’s acquisition of all of the issued and outstanding equity interests of Akili?
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A: |
At the effective time of the Merger, among other things, (i) each share of Akili common stock and preferred stock outstanding as of immediately prior to the effective time of the Merger will be converted into Akili,
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Inc. common stock as described further below, (ii) each Akili common stock warrant outstanding as of immediately prior to the effective time of the Merger (other than warrants that will be deemed automatically exercised in accordance with their terms) will be converted into a warrant to purchase shares of Akili, Inc. common stock, and the exercise price thereof shall be adjusted, in each case, as set forth in the applicable Akili common stock warrant and described herein and (iii) each option to purchase shares of Akili common stock (an “Akili Option”) outstanding as of immediately prior to the effective time of the Merger will be converted into an option to purchase shares of Akili, Inc. common stock (an “Akili, Inc. Option”) (and the exercise price thereof shall be adjusted) as described herein, with clauses (i) through (iii) representing an aggregate of 60,000,000 shares of Akili, Inc. common stock (the “Aggregate Merger Consideration”), and a
pre-transaction
equity value of Akili of $600 million (the “Base Purchase Price”). The portion of the Aggregate Merger Consideration reserved for the conversion of the Akili Options and Akili warrants is calculated using the treasury stock method so that all Akili Options and Akili warrants are deemed
net-settled
(although Akili, Inc. Options and Akili, Inc. warrants may by their terms be cash-settled, resulting in additional dilution). For further details, see “
Business Combination Proposal—The Merger Agreement—Consideration—Aggregate Merger Consideration
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Q:
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What equity stake will current SCS shareholders and Akili Stockholders hold in Akili, Inc. immediately after the consummation of the Business Combination?
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A: |
As of the date of this proxy statement/prospectus, there are 31,890,000 ordinary shares issued and outstanding, which include the 6,250,000 founder shares held by the Sponsor (together with SCS’s independent directors), the 640,000 private placement shares held by the Sponsor and 25,000,000 public shares. It is anticipated that, following the Business Combination, (i) SCS’s public shareholders are expected to own approximately 25% of outstanding Akili, Inc. common stock, (ii) Akili stockholders are expected to own approximately 55% of outstanding Akili, Inc. common stock (including shares purchased by certain existing Akili stockholders in the PIPE Investment), (iii) the Sponsor and related parties (including the Sponsor Related PIPE Investors) are expected to collectively own approximately 20% of outstanding Akili, Inc. common stock, and (iv) the Third-Party PIPE Investors (excluding existing Akili stockholders purchasing shares in the PIPE Investment) are expected to own approximately 1% of outstanding Akili, Inc. common stock. These percentages (i) assume that no public shareholders exercise their redemption rights in connection with the Business Combination, (ii) assume that Akili Options and Akili common stock warrants shall be treated as set forth in the Merger Agreement and as further described herein, (iii) assume that Akili, Inc. issues shares of Akili, Inc. common stock as the Aggregate Merger Consideration pursuant to the Merger Agreement, which in the aggregate equals 60,000,000 shares of Akili, Inc. common stock (assuming that all Akili, Inc. Options and Akili, Inc. warrants are
net-settled),
(iv) assume that Akili, Inc. issues 16,200,000 shares of Akili, Inc. common stock to the PIPE Investors pursuant to the PIPE Investment and (v) exclude the Earnout Shares. If the actual facts are different from these assumptions, the percentage ownership retained by SCS’s existing shareholders in the combined company will be different.
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Share Ownership in Akili, Inc.
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No Redemptions
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Maximum Redemptions
(1)
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Number of
Shares |
Percentage of
Outstanding |
Number of
Shares |
Percentage of
Outstanding |
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Akili stockholders
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62,060,000 |
(2)
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57.4 | % | 62,060,000 |
(2)
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74.7 | % | ||||||||
SCS public shareholders
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25,000,000 | 23.1 | % | — | 0.0 | % | ||||||||||
Sponsor and related party
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20,430,000 | 18.9 | % | 20,430,000 | 24.6 | % | ||||||||||
Third-party PIPE investors
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600,000 | 0.6 | % | 600,000 | 0.7 | % | ||||||||||
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Total
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108,090,000 | 100.0 | % | 83,090,000 | 100.0 | % |
(1) |
Assumes redemptions of 25,000,000 of Class A public shares of SCS in connection with the Business Combination.
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(2) |
Includes 56,137,514 shares expected to be issued to existing Akili common and preferred shareholders and 5,922,486 shares of Akili common stock underlying options and warrants that are included as part of the consideration. All awards issued are assumed to be issued assuming treasury stock method.
|
Q:
|
How has the announcement of the Business Combination affected the trading price of the SCS Class A ordinary shares?
|
A: |
On January 25, 2022, the trading date before the public announcement of the Business Combination, SCS’s Class A ordinary shares closed at $9.62. On , 2022, the most recent practicable date prior to the date of this proxy statement/prospectus, the Company’s Class A ordinary shares closed at $ .
|
Q:
|
Will the Company obtain new financing in connection with the Business Combination?
|
A: |
Yes. The PIPE Investors have agreed to purchase in the aggregate approximately 16,200,000 shares of Akili, Inc. common stock, for approximately $162,000,000 of gross proceeds, in the PIPE Investment, a portion of which is expected to be funded by the Sponsor Related PIPE Investors. The PIPE Investment is contingent upon, among other things, the closing of the Business Combination. See “
Business Combination Proposal—Related Agreements—PIPE Subscription Agreements
|
Q:
|
Why is SCS proposing the Domestication?
|
A: |
SCS’s board of directors believes that there are significant advantages to us that will arise as a result of a change of SCS’s domicile to Delaware. Further, SCS’s board of directors believes that any direct benefit that the DGCL provides to a corporation also indirectly benefits its stockholders, who are the owners of the corporation. SCS’s board of directors believes that there are several reasons why a reincorporation in Delaware is in the best interests of the Company and its shareholders, including (i) the prominence, predictability and flexibility of the DGCL, (ii) Delaware’s well-established principles of corporate governance and (iii) the increased ability for Delaware corporations to attract and retain qualified directors. Each of the foregoing are discussed in greater detail in the section entitled “
Domestication Proposal—Reasons for the Domestication
|
Q:
|
What amendments will be made to the current constitutional documents of SCS?
|
A: |
The consummation of the Business Combination is conditioned, among other things, on the Domestication. Accordingly, in addition to voting on the Business Combination, SCS’s shareholders are also being asked to consider and vote upon a proposal to approve the Domestication and replace SCS’s Cayman Constitutional Documents, in each case, under the Cayman Islands Companies Act, with the Proposed Organizational Documents, in each case, under the DGCL, which differ materially from the Cayman Constitutional Documents in the following respects:
|
Cayman Constitutional Documents
|
Proposed Organizational Documents
|
|||
Authorized Shares (Organizational Documents Proposal A) | The Cayman Constitutional Documents authorize 555,000,000 shares, consisting of 500,000,000 SCS Class A ordinary shares, 50,000,000 SCS Class B ordinary shares and 5,000,000 preference shares. | The Proposed Organizational Documents authorize shares, consisting of shares of Akili, Inc. common stock and shares of Akili, Inc. preferred stock. | ||
See paragraph 5 of the Existing Memorandum.
|
See Article IV of the Proposed Certificate of Incorporation
|
|||
Authorize the Board of Directors to Issue Preferred Stock Without Stockholder Consent (Organizational Documents Proposal B) | The Cayman Constitutional Documents authorize the issuance of 5,000,000 preference shares with such designation, rights and preferences as may be determined from time to time by SCS’s board of directors. Accordingly, SCS’s board of directors is empowered under the Cayman Constitutional Documents, without shareholder approval, to issue preference shares with dividend, liquidation, redemption, voting or other rights which could adversely affect the voting power or other rights of the holders of ordinary shares (except to the extent it may affect the ability of SCS to carry out a conversion of SCS Class B ordinary shares on the Closing Date, as contemplated by the Existing Articles). | The Proposed Organizational Documents authorize the Board to issue all or any shares of preferred stock in one or more series and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as the Board may determine. | ||
See paragraph 5 of the Existing Memorandum and Articles 3 and 17 of the Existing Articles.
|
See Article IV, subsection B of the Proposed Certificate of Incorporation.
|
Q:
|
How will the Domestication affect my ordinary shares?
|
A: |
As a result of and upon the effective time of the Domestication, (i) each of the then issued and outstanding SCS Class A ordinary shares will convert automatically, on a
one-for-one
one-for-one
Domestication Proposal
|
Q:
|
What are the U.S. federal income tax consequences of the Domestication?
|
A: |
As discussed more fully under “
U.S. Federal Income Tax Considerations
U.S. Federal Income Tax Considerations
|
• |
A U.S. Holder whose SCS Class A ordinary shares have a fair market value of less than $50,000 on the date of the Domestication will not recognize any gain or loss and will not be required to include any part of SCS’s earnings in income;
|
• |
A U.S. Holder whose SCS Class A ordinary shares have a fair market value of $50,000 or more and who, on the date of the Domestication, owns (actually or constructively) less than 10% of the total combined voting power of all classes of SCS stock entitled to vote and less than 10% of the total value of all classes of SCS stock will generally recognize gain (but not loss) on the exchange of SCS Class A ordinary shares for Akili, Inc. common stock pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holder may file an election to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367 of the Code) attributable to its SCS Class A ordinary shares provided certain other requirements are satisfied; and
|
• |
A U.S. Holder who, on the date of the Domestication, owns (actually or constructively) 10% or more of the total combined voting power of all classes of SCS stock entitled to vote or 10% or more of the total value of all classes of SCS stock will generally be required to include in income as a deemed dividend the all earnings and profits amount attributable to its SCS Class A ordinary shares.
|
Q:
|
Do I have redemption rights?
|
A: |
If you are a holder of public shares, you have the right to request that we redeem all or a portion of your public shares for cash provided that you follow the procedures and deadlines described elsewhere in this proxy statement/prospectus.
Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of any proposal, including the Business Combination
Proposal
How do I exercise my redemption rights?
|
Q:
|
How do I exercise my redemption rights?
|
A: |
If you are a public shareholder and wish to exercise your right to redeem the public shares, you must:
|
(i) |
hold public shares;
|
(ii) |
submit a written request to Continental, SCS’s transfer agent, that Akili, Inc. redeem all or a portion of your public shares for cash;
|
(iii) |
deliver your share certificates (if any) and any other redemption forms to Continental, SCS’s transfer agent, physically or electronically through The Depository Trust Company (“DTC”); and
|
(iv) |
provide the full name and shares of the beneficial holder.
|
Q:
|
What are the U.S. federal income tax consequences of exercising my redemption rights?
|
A: |
It is expected that a U.S. Holder (as defined in “
U.S. Federal Income Tax Considerations
U.S. Federal Income Tax Considerations
|
Q:
|
What happens to the funds deposited in the trust account after consummation of the Business Combination?
|
A: |
Following the closing of SCS’s initial public offering, an amount equal to $250.0 million ($10.00 per unit) was placed in the trust account. As of September 30, 2021, funds in the trust account totaled $250.0 million and were comprised entirely of U.S. government treasury obligations with a maturity of 185 days or less or of money market funds meeting certain conditions under Rule
2a-7
under the Investment Company Act of 1940, as amended (the “Investment Company Act”), which invest only in direct U.S. government treasury obligations. These funds will remain in the trust account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (1) the completion of a business combination (including the Closing), (2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the Cayman Constitutional Documents (i) to modify the substance or timing of SCS’s obligation to redeem 100% of the public shares if it does not complete a business combination by July 2, 2023 or (ii) with respect to any other material provisions relating to shareholders’ rights or
pre-business
combination activity and (3) the redemption of all of the public shares if SCS is unable to complete a business combination by July 2, 2023 (or if such date is further extended at a duly called extraordinary general meeting, such later date), subject to applicable law.
|
Q:
|
What happens if a substantial number of the public shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights?
|
A: |
Our public shareholders are not required to vote in respect of the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the trust account and the number of public shareholders are reduced as a result of redemptions by public shareholders.
|
Q:
|
What conditions must be satisfied to complete the Business Combination?
|
A: |
The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of SCS and Akili, (ii) effectiveness of the registration statement of which this proxy statement/prospectus forms a part of, (iii) expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, as amended, (iv) receipt of approval for listing on Nasdaq, the shares of Akili, Inc. common stock to be issued in connection with the Merger, (v) that we have at least
|
$5,000,001 of net tangible assets upon Closing, (vi) the Minimum Cash Condition, (vii) the size and composition of the Board shall be as contemplated in the Merger Agreement, (viii) the completion of the Domestication as contemplated by the Merger Agreement; and (ix) the absence of any injunctions. |
Q:
|
When do you expect the Business Combination to be completed?
|
A: |
It is currently expected that the Business Combination will be consummated in
mid-2022.
This date depends, among other things, on the approval of the proposals to be put to SCS shareholders at the extraordinary general meeting. However, such meeting could be adjourned if the Adjournment Proposal is adopted by SCS’s shareholders at the extraordinary general meeting and SCS elects to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting. For a description of the conditions for the completion of the Business Combination, see “
Business Combination Proposal—The Merger Agreement
|
Q:
|
What happens if the Business Combination is not consummated?
|
A: |
SCS will not complete the Domestication to Delaware unless all other conditions to the consummation of the Business Combination have been satisfied or waived by the parties in accordance with the terms of the Merger Agreement. If SCS is not able to complete the Business Combination with Akili by July 2, 2023 and is not able to complete another business combination by such date, in each case, as such date may be extended pursuant to the Cayman Constitutional Documents, SCS will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible, but not more than 10 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 (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
|
Q:
|
Do I have appraisal rights in connection with the proposed Business Combination and the proposed Domestication?
|
A: |
SCS’s shareholders do not have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Act or under the DGCL.
|
Q:
|
What do I need to do now?
|
A: |
SCS urges you to read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety and to consider how the Business Combination will affect you as a shareholder. SCS’s shareholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card.
|
Q:
|
How do I vote?
|
A: |
If you are a holder of record of ordinary shares on the record date for the extraordinary general meeting, you may vote in person at the extraordinary general meeting or by submitting a proxy for the extraordinary
|
general meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying
pre-addressed
postage-paid envelope.
If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the extraordinary general meeting and vote in person, obtain a valid proxy from your broker, bank or nominee.
|
Q:
|
If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?
|
A: |
No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement/prospectus may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent, and you may need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker, bank or nominee as to how to vote your shares. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to
non-discretionary
matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe all the proposals presented to the shareholders will be considered
non-discretionary
and therefore your broker, bank, or nominee cannot vote your shares without your instruction. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares and you should instruct your broker to vote your shares in accordance with directions you provide. If you do not provide voting instructions to your broker on a particular proposal on which your broker does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker
non-vote”
to the extent your broker is able to vote on another proposal, otherwise your shares will not be counted as voted or present for the purposes of determining a quorum. Abstentions and broker
non-votes,
while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal.
|
Q:
|
When and where will the extraordinary general meeting be held?
|
A: |
The extraordinary general meeting will be held on , 2022, at [a.m./p.m.] at , or at such other time, on such other date and at such other place to which the meeting may be adjourned or postponed.
|
Q:
|
Who is entitled to vote at the extraordinary general meeting?
|
A: |
SCS has fixed , 2022 as the record date for the extraordinary general meeting. If you were a shareholder of SCS at the close of business on the record date, you are entitled to vote on matters that come before the extraordinary general meeting. However, a shareholder may only vote his or her shares if he or she is present in person or is represented by proxy at the extraordinary general meeting.
|
Q:
|
How many votes do I have?
|
A: |
SCS shareholders are entitled to one vote at the extraordinary general meeting for each ordinary share held of record as of the record date. As of the close of business on the record date for the extraordinary general meeting, there were 31,890,000 ordinary shares issued and outstanding, of which 25,000,000 were issued and outstanding public shares.
|
Q:
|
What constitutes a quorum?
|
A: |
A quorum of SCS shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if the holders of a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy. As of the record date for the extraordinary general meeting, 15,945,001 ordinary shares would be required to achieve a quorum. Except for the Director Appointment Proposal, which may only be voted by holders of SCS Class B ordinary shares, Class A ordinary shares and Class B ordinary shares are entitled to vote together as a single class on all matters to be considered at the extraordinary general meeting. Voting on all resolutions at the extraordinary general meeting will be conducted by way of a poll vote. Shareholders will have one vote for each ordinary share owned at the close of business on the record date.
|
Q:
|
What vote is required to approve each proposal at the extraordinary general meeting?
|
A: |
The following votes are required for each proposal at the extraordinary general meeting:
|
(i) |
Business Combination Proposal:
|
(ii) |
Domestication Proposal:
two-thirds
of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
|
(iii) |
Organizational Documents Proposals:
two-thirds
of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
|
(iv) |
Director Appointment Proposal:
|
(v) |
Stock Issuance Proposal:
|
(vi) |
Incentive Plan Proposal
:
|
(vii) |
ESPP Proposal
:
|
(viii) |
Auditor Ratification Proposal:
|
(ix) |
Adjournment Proposal:
|
Q:
|
What are the recommendations of SCS’s board of directors?
|
A: |
SCS’s board of directors believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of SCS’s shareholders and unanimously recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” each of the separate Organizational Documents Proposals, “FOR” the Director Appointment Proposal, “FOR” the Stock Issuance Proposal, “FOR” the Incentive Plan Proposal, “FOR” the ESPP Proposal, “FOR” the Auditor Ratification Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.
|
Q:
|
How does the Sponsor intend to vote their shares?
|
A: |
Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor has agreed to vote all the founder shares, the private placement shares and any public shares they may hold in favor of all the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, the Sponsor (together with SCS’s independent directors) owns 21.61% of the issued and outstanding ordinary shares.
|
Q:
|
What happens if I sell my SCS ordinary shares before the extraordinary general meeting?
|
A: |
The record date for the extraordinary general meeting is earlier than the date of the extraordinary general meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your public shares after the applicable record date, but before the extraordinary general meeting, unless you grant a proxy to the transferee, you will retain your right to vote at such general meeting but the transferee, and not you, will have the ability to redeem such shares.
|
Q:
|
May I change my vote after I have mailed my signed proxy card?
|
A: |
Yes. Shareholders may send a later-dated, signed proxy card to SCS’s Chief Financial Officer at SCS’s address set forth below so that it is received by SCS’s Chief Financial Officer prior to the vote at the extraordinary general meeting (which is scheduled to take place on , 2022) or attend the extraordinary general meeting in person and vote. Shareholders also may revoke their proxy by sending a notice of revocation to SCS’s Chief Financial Officer, which must be received by SCS’s Chief Financial Officer prior to the vote at the extraordinary general meeting. However, if your shares are held in “street name” by your broker, bank or another nominee, you must contact your broker, bank or other nominee to change your vote.
|
Q:
|
What happens if I fail to take any action with respect to the extraordinary general meeting?
|
A: |
If you fail to take any action with respect to the extraordinary general meeting and the Business Combination is approved by shareholders and the Business Combination is consummated, you will become a stockholder of Akili, Inc. If you fail to take any action with respect to the extraordinary general meeting and the Business Combination is not approved, you will remain a shareholder of SCS. However, if you fail to vote with respect to the extraordinary general meeting, you will nonetheless be able to elect to redeem your public shares in connection with the Business Combination.
|
Q:
|
What should I do with my share certificates?
|
A: |
Our shareholders who exercise their redemption rights must deliver (either physically or electronically) their share certificates to Continental, SCS’s transfer agent, prior to the extraordinary general meeting.
|
Q:
|
What should I do if I receive more than one set of voting materials?
|
A: |
Shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your ordinary shares.
|
Q:
|
Who will solicit and pay the cost of soliciting proxies for the extraordinary general meeting?
|
A: |
SCS will pay the cost of soliciting proxies for the extraordinary general meeting. SCS has engaged Morrow Sodali LLC (“Morrow”) to assist in the solicitation of proxies for the extraordinary general meeting. SCS has agreed to pay Morrow Sodali LLC a fee of $ , plus disbursements (to be paid with
non-trust
account funds). SCS will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of SCS Class A ordinary shares for their expenses in forwarding soliciting materials to beneficial owners of SCS Class A ordinary shares and in obtaining voting instructions from those owners. SCS’s directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.
|
Q:
|
Where can I find the voting results of the extraordinary general meeting?
|
A: |
The preliminary voting results will be expected to be announced at the extraordinary general meeting. SCS will publish final voting results of the extraordinary general meeting in a Current Report on Form
8-K
within four business days after the extraordinary general meeting.
|
Q:
|
Who can help answer my questions?
|
A: |
If you have questions about the Business Combination or if you need additional copies of the proxy statement/prospectus, any document incorporated by reference in this proxy statement/prospectus or the enclosed proxy card, you should contact:
|
• |
Targeted treatments that are personalized to patients’ needs
|
• |
Clinically validated therapeutics like drugs and medical devices.
|
• |
Therapeutics that are experienced as entertainment
|
• |
Patient focused and adaptive
|
* |
Estimated timeframes in figure above correspond to applicable milestone start times, and are subject to change.
|
• |
Establishing a commercial foothold in pediatric ADHD.
|
• |
Leveraging our initial success to expand into other ADHD populations.
|
• |
Applying our clinically-validated technology to other mental health and neurology conditions.
|
• |
Simultaneously pursuing new technologies designed to address other cognitive impairments.
|
• |
Further evolving the treatment paradigm by creating new methods of cognitive assessment.
|
(A) |
Organizational Documents Proposal A
|
(B) |
Organizational Documents Proposal B
|
(C) |
Organizational Documents Proposal C
|
• |
Akili’s Large Addressable Market.
|
• |
Akili’s Strong Clinical Validation.
The American Journal of Psychiatry
The Lancet Digital Health
Nature: Digital Medicine
|
• |
Akili’s Highly Attractive Business Model
|
• |
Akili’s Future Opportunities
|
• |
Experienced and Proven Management Team
Management of Akili, Inc. Following the Business Combination—Executive Officers
|
Share Ownership in Akili, Inc.
|
||||||||||||||||
No Redemptions
|
Maximum Redemptions
(1)
|
|||||||||||||||
Number of Shares
|
Percentage of
Outstanding |
Number of
Shares |
Percentage of
Outstanding |
|||||||||||||
Akili stockholders
|
62,060,000 |
(2)
|
57.4 | % | 62,060,000 |
(2)
|
74.7 | % | ||||||||
SCS public shareholders
|
25,000,000 | 23.1 | % | – | 0.0 | % | ||||||||||
Sponsor and related party
|
20,430,000 | 18.9 | % | 20,430,000 | 24.6 | % | ||||||||||
Third-party PIPE investors
|
600,000 | 0.6 | % | 600,000 | 0.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
108,090,000 | 100.0 | % | 83,090,000 | 100.0 | % |
(1) |
Assumes redemptions of 25,000,000 of Class A public shares of SCS in connection with the Business Combination.
|
(2) |
Includes 56,137,514 shares expected to be issued to existing Akili common and preferred shareholders and 5,922,486 shares of Akili common stock underlying options and warrants that are included as part of the consideration. All awards issued are assumed to be issued assuming treasury stock method.
|
• |
Business Combination Proposal:
|
ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
|
• |
Domestication Proposal:
two-thirds
majority of the holders of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
|
• |
Organizational Documents Proposals:
two-thirds
majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
|
• |
Director Appointment Proposal:
|
• |
Stock Issuance Proposal:
|
• |
Incentive Plan Proposal:
|
• |
ESPP Proposal
:
.
|
• |
Auditor Ratification Proposal:
|
• |
Adjournment Proposal:
|
• |
hold public shares;
|
• |
(i) submit a written request to Continental Stock Transfer & Trust Company (“Continental”), SCS’s transfer agent, that Akili, Inc. redeem all or a portion of your public shares for cash; (ii) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and
|
• |
deliver your share certificates (if any) and any other redemption forms to Continental, SCS’s transfer agent, physically or electronically through DTC.
|
• |
Prior to SCS’s initial public offering, the Sponsor purchased 5,750,000 SCS Class B ordinary shares for an aggregate purchase price of $25,000. In June 2021, the Sponsor transferred 30,000 SCS Class B ordinary shares to Vladimir Coric (an independent director of SCS, and with the Sponsor, “SCS’s initial shareholders”). On June 29, 2021, SCS effected a share capitalization with respect to the SCS Class B ordinary shares of 575,000 shares thereof, resulting in SCS’s initial shareholders holding an aggregate of 6,325,000 founder shares (up to 825,000 of which were subject to forfeiture depending on the extent to which the underwriter’s over-allotment option in the initial public offering was exercised), resulting in an effective purchase price per SCS Class B ordinary share of approximately $0.004. As a result of the underwriters’ election to partially exercise their over-allotment option, a total of 750,000 SCS Class B ordinary shares are no longer subject to forfeiture and 75,000 SCS Class B ordinary shares were forfeited, resulting in an aggregate of 6,250,000 SCS Class B ordinary shares outstanding. If SCS does not consummate a business combination by July 2, 2023 (or if such date is extended at a duly called extraordinary general meeting, such later date), it would cease all operations except for the purpose of winding up, redeeming all of the outstanding public shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under the Cayman Islands Companies Act to provide for claims of creditors and the requirements of other applicable law.
In such event, the 6,250,000 SCS Class
B ordinary shares collectively owned by SCS’s initial shareholders would be worthless because following the redemption of the public shares, SCS would likely have few, if any, net assets and because the Sponsor and SCS’s directors and officers have agreed to waive their respective rights to
liquidating distributions from the trust account in respect of any SCS Class
A ordinary shares and SCS Class
B ordinary shares held by it or them, as applicable, if SCS fails to complete a business combination within the required period. Additionally, in such event, the 640,000 private placement shares purchased by the Sponsor simultaneously with the consummation of SCS’s initial public offering for an aggregate purchase price of $6,400,000, will also expire worthless.
|
• |
As described above, in June 2021, the Sponsor transferred 30,000 SCS Class B ordinary shares to Vladimir Coric, which shares would be worthless if SCS does not consummate a business combination by July 2, 2023 (or if such date is extended at a duly called extraordinary general meeting, such later date). The 30,000 shares of Akili, Inc. common stock into which the 30,000 SCS Class B ordinary shares held by Mr. Coric will automatically convert in connection with the Merger (including after giving effect to the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $ million based upon the closing price of $ per public share on Nasdaq on , 2022, the most recent practicable date prior to the date of this proxy statement/prospectus.
|
• |
On September 24, 2021, SCS entered into a director restricted stock unit award agreement (the “Director RSU Award”), with Mr. Sundaram, providing for the grant of 30,000 restricted stock units to Mr. Sundaram, which grant is contingent on both the consummation of an initial business combination with SCS and a shareholder approved equity plan. The Director RSU Award will vest at the Closing but will not settle into shares of Akili, Inc. common stock until a date, selected by Akili, Inc., that occurs between the Closing and March 15 of the year following the Closing. The 30,000 shares of Akili, Inc. common stock underlying the Director RSU, if unrestricted and freely tradable, would have had an aggregate market value of $ million based upon the closing price of $ per public share on Nasdaq on , 2022, the most recent practicable date prior to the date of this proxy statement/prospectus.
|
• |
The Sponsor (including its representatives and affiliates) and SCS’s directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to SCS. For example, Mr. Palihapitiya and Mr. Mehta, each of whom serves as an officer and director of SCS and may be considered an affiliate of the Sponsor, are also affiliated with Social Capital Suvretta Holdings Corp. II (“DNAB”), Social Capital Suvretta Holdings Corp. III (“DNAC”) and Social Capital Suvretta Holdings Corp. IV (“DNAD”), all of which are blank check companies incorporated as Cayman Islands exempted companies for the purpose of effecting their respective initial business combinations. Mr. Palihapitiya is the Chief Executive Officer and Chairman of the Board of Directors of DNAB, DNAC and DNAD, Mr. Mehta is the President and a director of DNAB, DNAC and DNAD, and each of our other officers is also an officer of DNAB, DNAC and DNAD, and each owes fiduciary duties under Cayman Islands law to DNAB, DNAC and DNAD. Mr. Palihapitiya is also the Chief Executive Officer and Chairman of the Board of Directors of Social Capital Hedosophia Holdings Corp. IV (“IPOD”) and Social Capital Hedosophia Holdings Corp. VI (“IPOF”) and owes fiduciary duties under Cayman Islands law to IPOD and IPOF. The Sponsor and SCS’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to SCS completing its initial business combination. Moreover, certain of SCS’s directors and officers have time and attention requirements for investment funds of which affiliates of the Sponsor are the investment managers. SCS’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to SCS, and the other entities to which they owe certain fiduciary or contractual duties, including DNAB, DNAC and DNAD, IPOD and IPOF, as applicable. Accordingly, they may have had conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in SCS’s favor and such potential business opportunities may be presented to other entities prior to their presentation to SCS, subject to applicable fiduciary duties under Cayman Islands law. SCS’s Cayman Constitutional Documents provide that SCS renounces its interest in any corporate opportunity offered to any director or officer of SCS unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of SCS and it is an opportunity that SCS is able to complete on a reasonable basis.
|
• |
SCS’s existing directors and officers will be eligible for continued indemnification and continued coverage under SCS’s directors’ and officers’ liability insurance after the Merger and pursuant to the
|
Merger Agreement. The Sponsor, for which Mr. Palihapitiya and Mr. Mehta serve as managers and officers and in which they have an indirect ownership interest, will also be entitled to certain indemnification from SCS after the Merger pursuant to the Merger Agreement.
|
• |
The Sponsor Related PIPE Investors have subscribed for $135,400,000 of the PIPE Investment, for which they will receive up to 13,540,000 shares of Akili, Inc. common stock. The 13,540,000 shares of Akili, Inc. common stock which the Sponsor Related PIPE Investors have subscribed for in the PIPE Investment, if unrestricted and freely tradable, would have had an aggregate market value of $ million based upon the closing price of $ per public share on Nasdaq on , 2022, the most recent practicable date prior to the date of this proxy statement/prospectus. See “
Certain Relationships and Related Person Transactions—SCS—Subscription Agreements
|
• |
In the event that SCS fails to consummate a business combination within the prescribed time frame (pursuant to the Cayman Constitutional Documents), or upon the exercise of a redemption right in connection with the Business Combination, SCS will be required to provide for payment of claims of creditors that were not waived that may be brought against SCS within the ten years following such redemption. In order to protect the amounts held in SCS’s trust account, the Sponsor has agreed that it will be liable to SCS if and to the extent any claims by a third party (other than SCS’s independent auditors) for services rendered or products sold to SCS, or a prospective target business with which SCS has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case, net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under the indemnity of the underwriters of SCS’s initial public offering against certain liabilities, including liabilities under the Securities Act.
|
• |
SCS’s officers and directors, and their affiliates are entitled to reimbursement of
out-of-pocket
|
• |
Pursuant to the Registration Rights Agreement, the Sponsor and the Sponsor Related PIPE Investors will have customary registration rights, including shelf, demand and piggy-back rights, subject to cooperation and
cut-back
provisions, with respect to the shares of Akili, Inc. common stock held by such parties following the consummation of the Business Combination.
|
• |
Treatment of Akili Equity Awards in the Business Combination.
Business Combination Proposal—The Merger Agreement—Consideration—Treatment of Akili Options
|
• |
The amounts listed in the table below represent the number of stock options to be held by each executive officer and director of Akili immediately following consummation of the Business Combination. Stock options are stated as total outstanding stock options with the estimated
|
intrinsic value of each executive officer’s and director’s stock options calculated as to the total outstanding stock options for each individual award multiplied by the difference between (i) the $10 fair value of Akili common stock under the Merger Agreement and (ii) the stock option exercise price.
|
Name
(1)
|
Dollar Value ($)
|
Number of
Shares |
||||||
Walter E. Martucci, II
|
12,061,856 | 1,884,924 | ||||||
Santosh Shanbhag
|
2,907,936 | 497,395 | ||||||
Jacqueline Studer
|
2,258,250 | 389,114 | ||||||
Anil S. Jina
|
2,258,250 | 401,274 | ||||||
Robert Perez
|
7,225,898 | 1,129,041 | ||||||
Bharatt Chowrira
|
— | — | ||||||
Kenneth Ehlert
|
— | 81,066 | ||||||
James Gates
|
— | — | ||||||
Adam Gazzaley
|
579,040 | 86,856 | ||||||
Christine Lemke
|
486,396 | 81,066 | ||||||
John Spinale
|
268,672 | 33,584 |
(1) |
This table does not include any Earnout Shares that Akili’s officers and directors may have the right to receive.
|
• |
Director Compensation
non-employee
director compensation policy (“Director Compensation Policy”). We intend that the Director Compensation Policy will provide for compensation in the form of cash, equity awards or a combination of both. For more information on the Director Compensation Policy we intend to adopt, see the section entitled “—
Director Compensation
|
• |
2022 Plan
|
Sources
|
Uses
|
|||||||||
($ in millions)
|
||||||||||
Cash and investments held in trust
(1)
|
$ | 251 |
Cash on balance sheet
|
$ | 382 | |||||
PIPE Investment
(2)
|
$ | 162 |
Transaction fees and expenses
(3)
|
$ | 31 | |||||
Total Sources
|
$ | 413 |
Total Uses
|
$ | 413 |
(1) |
Calculated as of September 30, 2021
|
(2) |
Shares issued in the PIPE Investment are at a deemed value of $10.00 per share.
|
(3) |
Includes deferred underwriting commission of $7.7 million and estimated transaction expenses.
|
• |
Akili has a history of significant losses, anticipates losses increasing expenses in the future, and may not be able to achieve or maintain profitability.
|
• |
The failure of Akili’s prescription digital therapeutics to achieve and maintain market acceptance and adoption by patients and physicians could have a material adverse effect on Akili’s business, prospects, results of operation and financial condition.
|
• |
The market for prescription digital therapeutics is new, rapidly evolving, and increasingly competitive, as the healthcare industry in the United States is undergoing significant structural change, which makes it difficult to forecast demand for Akili’s products. As a result, all prospective financial information included herein are subject to change.
|
• |
Akili’s product and product candidates represent novel and innovative potential therapeutic areas, and negative perception of any product or product candidate that Akili develops could adversely affect its ability to conduct its business, obtain marketing authorizations or identify alternate regulatory pathways to market for such product candidate.
|
• |
Akili faces competition, and new products may emerge that provide different or better alternatives for treatment of the conditions that EndeavorRx or Akili’s future products, if granted marketing authorization, are authorized to treat.
|
• |
If Akili fails to achieve and maintain clearance, de novo classification or approval to market its product candidates, including EndeavorRx for expanded indications, or if Akili is delayed in obtaining such marketing authorizations, its business, prospects, results of operations and financial condition could be materially and adversely affected.
|
• |
Clinical trials of any of Akili’s products or product candidates may fail to produce results necessary to support marketing authorization.
|
• |
EndeavorRx is made available via the Apple App Store
®
and on Google PlayTM, and supported by third-party infrastructure. If Akili’s ability to access these markets or access necessary third-party infrastructure was stopped or otherwise restricted or limited, it could have a material adverse effect on Akili’s business, prospects, results of operations and financial condition.
|
• |
If Akili is not able to develop and release new products, or successful enhancements, new features and modifications to EndeavorRx or any future products, Akili’s business, prospects, results of operations and financial condition could be materially and adversely affected.
|
• |
Akili relies on a single third party digital pharmacy for the fulfillment of prescriptions. This reliance on a single third party increases the risk that Akili could have disruption in the fulfillment of prescriptions, which could have a material and adverse effect on Akili’s reputation, business, results of operations and financial condition.
|
• |
Akili operates in a highly regulated industry and are subject to a wide range of federal, state, and local laws, rules, and regulations, including FDA regulatory requirements and laws pertaining to fraud and abuse in healthcare, that affect nearly all aspects of Akili’s operations. Failure to comply with these laws, rules, and regulations, or to obtain and maintain required licenses, could subject Akili to enforcement actions, including substantial civil and criminal penalties, and might require Akili to recall or withdraw a product from the market or cease operations.
|
• |
Akili’s commercialization efforts to date have focused almost exclusively on the U.S. Akili’s ability to enter other foreign markets will depend, among other things, on its ability to navigate various regulatory regimes with which Akili does not have experience, which could delay or prevent the growth of its operations outside of the U.S.
|
• |
The insurance coverage and reimbursement status of products that recently obtained marketing authorization is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for EndeavorRx or any other of Akili’s product candidates, if granted marketing authorization, could limit Akili’s ability to market those products and materially and adversely affect its ability to generate revenue.
|
• |
Akili is subject to data privacy and security laws and regulations governing its collection, use, disclosure or storage of personally identifiable information, including protected health information and payment card data, which may impose restrictions on Akili and its operations. Any actual or perceived noncompliance with such laws and regulations may result in penalties, regulatory action, loss of business or unfavorable publicity.
|
• |
If Akili is unable to adequately protect and enforce its intellectual property and proprietary technology, obtain and maintain patent protection for its technology and products where appropriate or if the scope of the patent protection obtained is not sufficiently broad, or if Akili is unable to protect the confidentiality of its trade secrets and
know-how,
its competitors could develop and commercialize technology and products similar or identical to Akili’s products, and its ability to successfully commercialize its technology and products may be impaired.
|
• |
If Akili fails to comply with obligations in the agreements under which it collaborates with or license intellectual property rights from third parties, or otherwise experience disruptions to its business relationships with collaborators or licensors, Akili could lose rights that are important to its business.
|
• |
Akili will need substantial additional funding, and if it is unable to raise capital when needed or on terms favorable to Akili, Akili’s business, financial condition and results of operation could be materially and adversely affected.
|
• |
If a large number of SCS’s public shareholders exercise their redemption rights, the cash held by Akili after Closing may be less than anticipated and negatively impact our ability to invest in the development of our platform and fund our operating expenditures and capital expenditure requirements as planned.
|
• |
The amount of Akili’s future losses is uncertain and its quarterly and annual operating results may fluctuate significantly or fall below the expectations of investors or securities analysists, each of which may cause its stock price to fluctuate or decline.
|
• |
Since the Sponsor and SCS’s directors and executive officers have interests that are different, or in addition to (and which may conflict with), the interests of our shareholders, a conflict of interest may have existed in determining whether the Business Combination with Akili is appropriate as our initial business combination.
|
(in thousands, except share and per share data)
|
||||
Income Statement Data:
|
For the Period
from February 25, 2021 (Inception) Through September 30, 2021 |
|||
Revenue
|
$ | — | ||
Loss from operations
|
(269 | ) | ||
Interest income
|
3 | |||
Net loss
|
(266 | ) | ||
Basic and diluted weighted average shares outstanding, Class A ordinary shares
|
10,884,906 | |||
Basic and diluted net loss per share, Class A ordinary shares
|
(0.02 | ) | ||
Basic and diluted weighted average shares outstanding, Class B ordinary shares
|
5,818,396 | |||
Basic and diluted net loss per share, Class A ordinary shares
|
(0.02 | ) |
Balance Sheet Data:
|
As of
September 30,
2021 |
|||
Total current assets
|
$ | 1,417 | ||
Trust account
|
250,003 | |||
Total assets
|
251,420 | |||
Total liabilities
|
7,749 | |||
Value of ordinary shares subject to possible redemption
|
250,000 | |||
Permanent deficit
|
(6,332 | ) |
Nine Months
Ended September 30, |
Years Ended
December 31, |
|||||||||||||||
(dollars in thousands, except per share data) |
2021
|
2020
|
2020
|
2019
|
||||||||||||
Statement of Operations Data:
|
||||||||||||||||
Total revenue
|
$ | 377 | $ | 3,839 | $ | 3,939 | $ | 19,986 | ||||||||
Total cost and operating expenses
|
41,657 | 21,724 | 29,375 | 41,484 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations
|
(41,280 | ) | (17,885 | ) | (25,436 | ) | (21,498 | ) | ||||||||
Other income (expense):
|
||||||||||||||||
Other income
|
16 | 122 | 124 | 1,034 | ||||||||||||
Interest expense
|
(292 | ) | (257 | ) | (333 | ) | (157 | ) | ||||||||
Loss on extinguishment of debt
|
(181 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss before income taxes
|
$ | (41,737 | ) | $ | (18,020 | ) | $ | (25,645 | ) | $ | (20,621 | ) | ||||
Income tax expense
|
$ | — | $ | 2 | $ | 1 | $ | 13 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$ | (41,737 | ) | $ | (18,022 | ) | $ | (25,646 | ) | $ | (20,634 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Dividends on Series D convertible preferred stock
|
$ | (3,888 | ) | $ | — | $ | — | $ | — | |||||||
Redemption value of Series D convertible preferred stock
|
(57,263 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to common shareholders
|
$ | (102,888 | ) | $ | (18,022 | ) | $ | (25,646 | ) | $ | (20,634 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share—basic and diluted
|
$ | (88.75 | ) | $ | (15.61 | ) | $ | (22.20 | ) | $ | (17.90 | ) | ||||
|
|
|
|
|
|
|
|
September 30,
2021
|
December 31,
|
|||||||||||
(in thousands) |
2020
|
2019
|
||||||||||
Balance Sheet Data:
|
||||||||||||
Cash and cash equivalents
|
$ | 94,842 | $ | 18,528 | $ | 41,197 | ||||||
Working capital, net
(1)
|
89,766 | 15,230 | 35,541 | |||||||||
Total assets
|
97,987 | 20,181 | 43,538 | |||||||||
Total liabilities
|
14,097 | 8,197 | 8,900 | |||||||||
Redeemable convertible preferred stock
|
287,718 | 116,886 | 116,886 | |||||||||
Total stockholders’ equity (deficit)
|
(203,828 | ) | (104,902 | ) | (82,248 | ) | ||||||
Statement of Cash Flows Data:
|
||||||||||||
Net cash used in operating activities
|
$ | (35,933 | ) | $ | (24,551 | ) | $ | (29,381 | ) | |||
Net cash used in investing activities
|
(480 | ) | (116 | ) | (461 | ) | ||||||
Net cash provided by financing activities
|
112,727 | 1,998 | 4,938 |
(1) |
Working capital, net is defined as current assets less current liabilities.
|
• |
Assuming No Redemptions (Scenario 1)
|
• |
Assuming Maximum Redemptions (Scenario 2)
|
Combined Pro Forma
|
||||||||
Nine Months Ended September 30, 2021
|
||||||||
Assuming No
Redemptions |
Assuming Maximum
Redemptions |
|||||||
(in thousands, except share and per share amounts) | ||||||||
Selected Unaudited Pro Forma Combined Statement of Operations Data
|
||||||||
Loss from operations
|
$ | (42,595 | ) | $ | (42,394 | ) | ||
Net loss attributable to common stockholders, basic and diluted
|
$ | (104,203 | ) | $ | 104,001 | |||
Net loss per common share, basic and diluted
|
$ | (1.02 | ) | $ | (1.35 | ) | ||
Weighted-average common shares outstanding, basic and diluted
|
102,167,514 | 77,167,514 |
Combined Pro Forma
|
||||||||
Year Ended December 31, 2020
|
||||||||
Assuming No
Redemptions |
Assuming Maximum
Redemptions |
|||||||
(in thousands, except share and per share amounts) | ||||||||
Selected Unaudited Pro Forma Combined Statement of Operations Data
|
||||||||
Loss from operations
|
$ | (38,803 | ) | $ | (36,550 | ) | ||
Net loss attributable to common stockholders, basic and diluted
|
$ | (39,013 | ) | $ | (36,760 | ) | ||
Net loss per common share, basic and diluted
|
$ | (0.38 | ) | $ | (0.48 | ) | ||
Weighted-average common shares outstanding, basic and diluted
|
102,167,514 | 77,167,514 |
Combined Pro Forma
|
||||||||
September 30, 2021
|
||||||||
Assuming No
Redemptions |
Assuming
Maximum Redemptions |
|||||||
(in thousands) | ||||||||
Selected Unaudited Pro Forma Combined Balance Sheet Data
|
||||||||
Total assets
|
$ | 477,105 | $ | 229,305 | ||||
Total liabilities
|
$ | 87,588 | $ | 73,406 | ||||
Total stockholders’ equity
|
$ | 389,517 | $ | 155,900 |
• |
Assuming No Redemptions (Scenario 1)
:
|
• |
Assuming Maximum Redemptions (Scenario 2)
:
|
Nine Months Ended September 30, 2021
(1)
|
||||||||||||||||
Historical
Social Capital |
Historical
Akili
|
Pro Forma
Combined
(No Redemptions)
|
Pro Forma
Combined (Maximum Redemptions) |
|||||||||||||
Net loss attributable to common stockholders, basic and diluted
|
$ | (266 | ) | $ | (102,888 | ) | $ | (104,203 | ) | $ | (104,002 | ) | ||||
Stockholders’ equity (deficit)
|
$ | (6,332 | ) | $ | (203,828 | ) | $ | 389,517 | $ | 155,900 | ||||||
Shares subject to redemption
|
25,000,000 | — | — | — | ||||||||||||
Outstanding shares classified in permanent equity
|
6,890,000 | 1,265,239 | 102,167,514 | 77,167,514 | ||||||||||||
Weighted-average
erase common shares outstanding, basic and diluted
|
n/a | 1,159,297 | 102,167,514 | 77,167,514 | ||||||||||||
Weighted-average shares outstanding of Class A, basic and diluted
|
10,884,906 | n/a | n/a | n/a | ||||||||||||
Weighted-average shares outstanding of Class B, basic and diluted
|
5,818,396 | n/a | n/a | n/a | ||||||||||||
Book value per share
(2)
|
$ | (0.92 | ) | $ | (161.10 | ) | $ | 3.81 | $ | 2.01 | ||||||
Net loss per common share, basic and diluted
(3)
|
n/a | $(88.75) | $(1.02) | $(1.35) | ||||||||||||
Net loss per Class A share, basic and diluted
(3)
|
$ | (0.02 | ) | n/a | n/a | n/a | ||||||||||
Net loss per Class B share, basic and diluted
(3)
|
$ | (0.02 | ) | n/a | n/a | n/a |
(1) |
There was no cash dividends for either SCS or Akili in the period presented.
|
(2) |
Historical book value per share for SCS and Akili calculated as permanent equity divided by the total number of outstanding shares classified in permanent equity. Pro forma book value per share is calculated as pro forma total stockholders’ equity divided by the total shares of the Post-Combination Company immediately after the Transactions under each scenario.
|
(3) |
Calculated based on weighted-average shares outstanding.
|
• |
the failure of EndeavorRx to achieve wide acceptance among patients, self-insured employers, commercial and government payers, health plans, physicians and other government entities, and key opinion leaders in the treatment community;
|
• |
lack of additional evidence of peer-reviewed publication of clinical or real world evidence supporting the effectiveness, safety, cost-savings or other advantages of our products over competitive products or other currently available methodologies;
|
• |
perceived risks associated with the use of our product or similar products or technologies generally;
|
• |
our ability to maintain U.S. Food and Drug Administration, or FDA, marketing authorization and other marketing authorizations for EndeavorRx;
|
• |
our ability to secure and maintain other regulatory clearance, authorization or approval for EndeavorRx for expanded indications and our other product candidates;
|
• |
the introduction of competitive products and the rate of acceptance of those products as compared to our products; and
|
• |
results of clinical, real world and health economics and outcomes research studies relating to chronic condition products or similar competitive products.
|
• |
lack of availability of adequate third-party payer coverage or reimbursement;
|
• |
lack of experience with our products;
|
• |
our inability to convince key opinion leaders to recommend our products;
|
• |
perceived inadequacy of evidence supporting clinical benefits, safety or cost-effectiveness of our products;
|
• |
liability risks generally associated with the use of new products; and
|
• |
the training required to use new products.
|
• |
restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls;
|
• |
clinical trial holds;
|
• |
fines, warning letters or other regulatory enforcement action;
|
• |
refusal by the FDA or comparable foreign regulatory authorities to clear or approve pending submissions filed by us;
|
• |
product seizure or detention, or refusal to permit the import or export of products; and
|
• |
injunctions or the imposition of civil or criminal penalties.
|
• |
We may not be able to demonstrate to the FDA’s satisfaction that our product candidates meet the applicable regulatory standards for clearance, de novo classification, or approval, as applicable;
|
• |
The FDA may disagree that our clinical data supports the label and use that we are seeking; and
|
• |
The FDA may disagree that the data from our preclinical or pilot studies and clinical trials is sufficient to support marketing authorization.
|
• |
the possible breach of the manufacturing agreement by the third party; and
|
• |
the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.
|
• |
we may lose marketing authorization of such product;
|
• |
regulatory authorities may require additional warnings on the product’s label;
|
• |
we may be required to issue safety communications to patients or healthcare providers that outline the risks of such side effects;
|
• |
we could be sued and held liable for harm caused to patients; and
|
• |
our reputation may suffer.
|
• |
multiple, conflicting and changing laws and regulations such as tax laws, privacy and data protection laws and regulations, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses;
|
• |
requirements to maintain data and the processing of that data on servers located within the United States or in such countries;
|
• |
protecting and enforcing our intellectual property rights;
|
• |
converting our products as well as the accompanying instructional and marketing materials to conform to the language and customs of different countries;
|
• |
complexities associated with managing multiple payer reimbursement regimes, and government payers;
|
• |
competition from companies with significant market share in our market and with a better understanding of user preferences;
|
• |
financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the effect of local and regional financial pressures on demand and payment for our products and services and exposure to foreign currency exchange rate fluctuations;
|
• |
natural disasters, political and economic instability, including wars, terrorism, political unrest, outbreak of disease (including the recent coronavirus outbreak), boycotts, curtailment of trade, and other market restrictions; and
|
• |
regulatory and compliance risks that relate to maintaining accurate information and control over activities subject to regulation under the U.S. Foreign Corrupt Practices Act (the “FCPA”), and comparable laws and regulations in other countries.
|
• |
a covered benefit under its health plan;
|
• |
safe, effective and medically necessary;
|
• |
supported by robust clinical data from well-controlled clinical research;
|
• |
appropriate for the specific patient;
|
• |
cost-effective; and
|
• |
neither experimental nor investigational.
|
• |
the scope of rights granted under the license agreement and other interpretation-related issues;
|
• |
the extent to which our technology and processing infringe on intellectual property of the licensor that is not subject to the licensing agreement;
|
• |
the sublicensing of patent and other rights under our collaborative development relationships;
|
• |
our diligence obligations under the license agreement and what activities satisfy those diligence obligations;
|
• |
the inventorship and ownership of inventions and
know-how
resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and
|
• |
the priority of invention of patented technology.
|
• |
the scope of rights granted under the license agreement and other interpretation-related issues;
|
• |
amount of royalty payments under the license agreement;
|
• |
whether and to what extent our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;
|
• |
our right to sublicense patent and other rights to collaborators and other third parties;
|
• |
our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our products, and what activities satisfy those diligence obligations; and
|
• |
the ownership of inventions and
know-how
resulting from the joint creation or use of intellectual property by our licensors and us and our collaborators.
|
• |
the scope, progress, results and costs of researching and developing our current product candidates, as well as other additional product candidates we may develop and pursue in the future;
|
• |
the timing of, and the costs involved in, obtaining marketing authorization for our product candidates and any other additional product candidates we may develop and pursue in the future;
|
• |
the number of future product candidates that we may pursue and their development requirements;
|
• |
the costs of commercialization activities for our product candidates, including the costs and timing of establishing product sales, marketing, and distribution capabilities;
|
• |
revenue received from commercial sales of our current products and, subject to receipt of authorization, revenue, if any, received from commercial sales of our product candidates;
|
• |
the extent to which we
in-license
or acquires rights to other products, product candidates or technologies;
|
• |
our investment in our human capital required to grow the business and the associated costs as we expand our research and development and establishes a commercial infrastructure;
|
• |
the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights, including enforcing and defending intellectual property-related claims; and
|
• |
the cost of operating a public company.
|
• |
the timing and success or failure of clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners or as a result of
COVID-19;
|
• |
our ability to successfully recruit and retain subjects for clinical trials, and any delays caused by difficulties in such efforts, including as a result of
COVID-19;
|
• |
our ability to obtain marketing authorization for our product candidates and the timing and scope of any such marketing authorizations we may receive;
|
• |
the timing and cost of, and level of investment in, research and development activities relating to our product candidates, which may change from time to time;
|
• |
our ability to attract, hire and retain qualified personnel;
|
• |
expenditures that we will or may incur to develop additional product candidates;
|
• |
the level of demand for EndeavorRx and our other product candidates should such product candidates receive marketing authorizations, which may vary significantly;
|
• |
the risk/benefit profile, cost and reimbursement policies with respect to EndeavorRx and our other product candidates, if granted marketing authorization, and existing and potential future therapeutics that compete with our product candidates;
|
• |
the changing and volatile U.S. and global economic environments; and
|
• |
future accounting pronouncements or changes in our accounting policies.
|
• |
On March 2, 2021, the Sponsor paid $25,000 to cover certain offering and formation costs of SCS in consideration for which the Sponsor received 5,750,000 Class B ordinary shares. On June 29, 2021, the Company effected a share capitalization with respect to its Class B ordinary shares of 575,000 shares thereof, resulting in the Company’s initial shareholders holding an aggregate of 6,325,000 founder shares. All share and
per-share
amounts have been retroactively restated to reflect the share capitalization. The founder shares included an aggregate of up to 825,000 shares that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised. As a result of the underwriters’ election to partially exercise their over-allotment option, a total of 750,000 founder shares are no longer subject to forfeiture and 75,000 founder shares were forfeited, resulting in an aggregate of 6,250,000 founder shares outstanding. If SCS does not consummate a business combination by July 2, 2023 (or if such date is extended at a duly called extraordinary general meeting, such later date), it would cease all operations except for the purpose of winding up, redeeming all of the outstanding public shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under the Cayman Islands Companies Act to provide for claims of creditors and the requirements of other applicable law. In such event, the 6,250,000 SCS Class B ordinary shares collectively owned by SCS’s initial shareholders would be worthless because following the redemption of the public shares, SCS would likely have few, if any, net assets and because the Sponsor and SCS’s directors and officers have
|
agreed to waive their respective rights to liquidating distributions from the trust account in respect of any SCS Class A ordinary shares and SCS Class B ordinary shares held by it or them, as applicable, if SCS fails to complete a business combination within the required period. Certain of SCS’s directors and executive officers, including Chamath Palihapitiya and Kishen Mehta, also have an economic interest in the 640,000 private placement shares purchased by the Sponsor simultaneously with the consummation of SCS’s initial public offering and in the 6,250,000 SCS Class B ordinary shares owned by the Sponsor. The 6,250,000 shares of Akili, Inc. common stock into which the 6,250,000 SCS Class B ordinary shares collectively held by the Sponsor, will automatically convert in connection with the Merger (including after giving effect to the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $ million based upon the closing price of $ per public share on Nasdaq on , 2022, the most recent practicable date prior to the date of this proxy statement/prospectus. However, given that such shares of Akili, Inc. common stock will be subject to certain restrictions, including those described above, SCS believes such shares have less value.
|
• |
The Sponsor (including its representatives and affiliates) and SCS’s directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to SCS. For example, Mr. Palihapitiya and Mr. Mehta, each of whom serves as an officer and director of SCS and may be considered an affiliate of the Sponsor, have also recently incorporated Social Capital Suvretta Holdings Corp. II (“DNAB”), Social Capital Suvretta Holdings Corp. III (“DNAC”) and Social Capital Suvretta Holdings Corp. IV (“DNAD”), all of which are blank check companies incorporated as Cayman Islands exempted companies for the purpose of effecting their respective initial business combinations. Mr. Palihapitiya is the Chief Executive Officer and Chairman of the Board of Directors of DNAB, DNAC and DNAD, Mr. Mehta is the President and a director of DNAB, DNAC and DNAD, and each of our other officers is also an officer of DNAB, DNAC and DNAD and owe fiduciary duties under Cayman Islands law to DNAB, DNAC and DNAD. The Sponsor and SCS’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to SCS completing its initial business combination. Moreover, certain of SCS’s directors and officers have time and attention requirements for investment funds of which affiliates of the Sponsor are the investment managers. SCS’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to SCS, and the other entities to which they owe certain fiduciary or contractual duties, including DNAB, DNAC and DNAD. Accordingly, they may have had conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in SCS’s favor and such potential business opportunities may be presented to other entities prior to their presentation to SCS, subject to applicable fiduciary duties under Cayman Islands law. SCS’s Cayman Constitutional Documents provide that SCS renounces its interest in any corporate opportunity offered to any director or officer of SCS unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of SCS and it is an opportunity that SCS is able to complete on a reasonable basis.
|
• |
SCS’s existing directors and officers will be eligible for continued indemnification and continued coverage under SCS’s directors’ and officers’ liability insurance after the Merger and pursuant to the Merger Agreement.
|
• |
The Sponsor Related PIPE Investors have subscribed for $135,400,00 of the PIPE Investment, for which they will receive up to 13,540,000 shares of Akili, Inc. common stock. The 135,400,000 shares of Akili, Inc. common stock which the Sponsor Related PIPE Investors have subscribed for in the PIPE Investment, if unrestricted and freely tradable, would have had an aggregate market value of $ million based upon the closing price of $ per public share on Nasdaq on , 2022, the most recent practicable date prior to the date of this proxy statement/prospectus. See “
Certain Relationships and Related Person Transactions—SCS—Subscription Agreements.
|
• |
In the event that SCS fails to consummate a business combination within the prescribed time frame (pursuant to the Cayman Constitutional Documents), or upon the exercise of a redemption right in connection with the Business Combination, SCS will be required to provide for payment of claims of creditors that were not waived that may be brought against SCS within the ten years following such redemption. In order to protect the amounts held in SCS’s trust account, the Sponsor has agreed that it will be liable to SCS if and to the extent any claims by a third party (other than SCS’s independent auditors) for services rendered or products sold to SCS, or a prospective target business with which SCS has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case, net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under the indemnity of the underwriters of SCS’s initial public offering against certain liabilities, including liabilities under the Securities Act.
|
• |
SCS’s officers and directors, and their affiliates are entitled to reimbursement of
out-of-pocket
|
• |
Pursuant to the Registration Rights Agreement, the Sponsor and the Sponsor Related PIPE Investors will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of Akili, Inc. common stock held by such parties following the consummation of the Business Combination.
|
• |
its employees may experience uncertainty about their future roles, which might adversely affect Akili, Inc.’s ability to retain and hire key personnel and other employees;
|
• |
members, business partners, customers, and other parties with which Akili, Inc. maintains business relationships may experience uncertainty about its future and seek alternative relationships with third parties, seek to alter their business relationships with Akili or fail to
re-enroll
or extend an existing relationship with Akili; and
|
• |
Akili has expended and Akili will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the proposed Business Combination.
|
• |
a limited availability of market quotations for Akili, Inc.’s securities;
|
• |
reduced liquidity for Akili, Inc.’s securities;
|
• |
a determination that Akili, Inc. common stock is a “penny stock” which will require brokers trading in Akili, Inc. common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for Akili, Inc.’s securities;
|
• |
a limited amount of news and analyst coverage; and
|
• |
a decreased ability to issue additional securities or obtain additional financing in the future.
|
• |
the ability of the board of directors of Akili, Inc. to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
|
• |
the division of the board of directors into three classes of directors, with each class serving a staggered three-year term, and this classified board provision could have the effect of making the replacement of incumbent directors more time consuming and difficult;
|
• |
the proposed certificate of incorporation will prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
|
• |
the limitation of the liability of, and the indemnification of, the directors and officers of Akili, Inc.;
|
• |
the ability of the board of directors of Akili, Inc. to amend the bylaws, which may allow the board of directors of Akili, Inc. to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and
|
• |
advance notice procedures with which stockholders must comply to nominate candidates to the board of directors of Akili, Inc. or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the board of directors of Akili, Inc. and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of Akili, Inc.
|
• |
changes in the industries in which we and our customers operate;
|
• |
developments involving our competitors;
|
• |
changes in laws and regulations affecting our business;
|
• |
variations in our operating performance and the performance of our competitors in general;
|
• |
actual or anticipated fluctuations in our quarterly or annual operating results;
|
• |
publication of research reports by securities analysts about our or our competitors or our industry;
|
• |
the public’s reaction to our press releases, our other public announcements and our filings with the SEC;
|
• |
actions by stockholders, including the sale by the Third-Party PIPE Investors of any of their shares of our common stock;
|
• |
additions and departures of key personnel;
|
• |
commencement of, or involvement in, litigation involving Akili, Inc.;
|
• |
changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;
|
• |
the volume of shares of our common stock available for public sale; and
|
• |
general economic and political conditions, such as the effects of the
COVID-19
pandemic, recessions, interest rates, local and national elections, fuel prices, international currency fluctuations, corruption, political instability and acts of war or terrorism.
|
• |
consider and vote upon a proposal to approve by ordinary resolution and adopt the Merger Agreement attached to this proxy statement/prospectus statement as Annex A, pursuant to which, among other things, following the Domestication of SCS to Delaware, the Merger of Merger Sub with and into Akili, with Akili surviving the merger as a wholly-owned subsidiary of Akili, Inc. in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus (the “Business Combination Proposal”);
|
• |
consider and vote upon a proposal to approve by special resolution, assuming the Business Combination Proposal is approved and adopted, the change of SCS’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication Proposal”);
|
• |
consider and vote upon the following three separate proposals (collectively, the “Organizational Documents Proposals”) to approve by special resolution, assuming the Business Combination Proposal and the Domestication Proposal are approved and adopted, the following material differences between the Cayman Constitutional Documents and the Proposed Organizational Documents:
|
• |
to authorize the change in the authorized share capital of SCS from 500,000,000 Class A ordinary shares, par value $0.0001 per share (the “SCS Class A ordinary shares”), 50,000,000 Class B ordinary shares, par value $0.0001 per share (the “SCS Class B ordinary shares” and, together with the SCS Class A ordinary shares, the “ordinary shares”), and 5,000,000 preference shares, par value $0.0001 per share (the “SCS preference shares”), to shares of common stock, par value $0.0001 per share, of Akili, Inc. (the “Akili, Inc. common stock”) and shares of preferred stock, par value $0.0001 per share, of Akili, Inc. (the “Akili, Inc. preferred stock”) (“Organizational Documents Proposal A”);
|
• |
to authorize the board of directors of Akili, Inc. to issue any or all shares of Akili, Inc. preferred stock in one or more classes or series, with such terms and conditions as may be expressly determined by Akili, Inc.’s board of directors and as may be permitted by the DGCL (“Organizational Documents Proposal B”);
|
• |
to authorize all other changes in connection with the replacement of Cayman Constitutional Documents with the Proposed Certificate of Incorporation and Proposed Bylaws in connection with the consummation of the Business Combination (copies of which are attached to this proxy
|
statement/prospectus as Annex J and Annex K, respectively), including (1) changing the corporate name from “Social Capital Suvretta Holdings Corp. I” to “Akili Interactive Labs, Inc.,” (2) making Akili, Inc.’s corporate existence perpetual, (3) adopting Delaware as the exclusive forum for certain stockholder litigation and the United States Federal District Courts as the exclusive forum for litigation arising out of the Securities Act, (4) being subject to the provisions of Section 203 of DGCL and (5) removing certain provisions related to SCS’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which SCS’s board of directors believes is necessary to adequately address the needs of Akili, Inc. after the Business Combination (“Organizational Documents Proposal C”);
|
• |
consider and vote upon a proposal to approve by ordinary resolution of the holders of the SCS Class B ordinary shares, to appoint to a staggered board nine directors who, upon consummation of the Business Combination, will be the directors of Akili, Inc. (the “Director Appointment Proposal”);
|
• |
consider and vote upon a proposal to approve by ordinary resolution for purposes of complying with the applicable provisions of Nasdaq Listing Rule 5635, the issuance of Akili, Inc. common stock to (a) the PIPE Investors, including the Sponsor Related PIPE Investors, pursuant to the PIPE Investment and (b) the Akili Stockholders pursuant to the Merger Agreement (the “Stock Issuance Proposal”);
|
• |
consider and vote upon a proposal to approve by ordinary resolution, the 2022 Plan (the “Incentive Plan Proposal”);
|
• |
consider and vote upon a proposal to approve by ordinary resolution, the 2022 ESPP (the “ESPP Proposal”);
|
• |
consider and vote upon a proposal to approve by ordinary resolution, the ratification of the appointment of Marcum LLP as the independent registered public accountants of SCS to audit and report upon SCS’s consolidated financial statements for the fiscal year ending December 31, 2022 (the “Auditor Ratification Proposal”); and
|
• |
consider and vote upon a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more Condition Precedent Proposals at the extraordinary general meeting (the “Adjournment Proposal”).
|
• |
You can vote by signing and returning the enclosed proxy card. If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted as recommended by SCS’s board “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” each of the separate Organizational Documents Proposals, “FOR” the Director Appointment Proposal, “FOR” the Stock Issuance Proposal, “FOR” the Incentive Plan Proposal, “FOR” the ESPP Plan, “FOR” the Auditor Ratification Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting. Votes received after a matter has been voted upon at the extraordinary general meeting will not be counted.
|
• |
You can attend the extraordinary general meeting and vote in person. You will receive a ballot when you arrive. However, if your shares are held in the name of your broker, bank or another nominee, you must get a valid legal proxy from the broker, bank or other nominee. That is the only way SCS can be sure that the broker, bank or nominee has not already voted your shares.
|
• |
you may send another proxy card with a later date;
|
• |
you may notify SCS’s Chief Financial Officer in writing before the extraordinary general meeting that you have revoked your proxy; or
|
• |
you may attend the extraordinary general meeting, revoke your proxy, and vote online, as indicated above.
|
(i) |
hold public shares;
|
(ii) |
submit a written request to Continental, SCS’s transfer agent, that Akili, Inc. redeem all or a portion of your public shares for cash;
|
(iii) |
deliver your share certificates (if any) and any other redemption forms to Continental, SCS’s transfer agent, physically or electronically through DTC; and
|
(iv) |
provide the full name and shares of the beneficial holder.
|
• |
each share of Akili common stock will be canceled and converted into the right to receive a number of shares of Akili, Inc. common stock equal to the quotient obtained by dividing (i) the Aggregate Merger Consideration by (ii) the aggregate fully diluted number of shares of Akili common stock issued and outstanding immediately prior to the Merger as calculated pursuant to the Merger Agreement (such quotient, the “Merger Consideration Per Fully Diluted Share”);
|
• |
each share of Akili Series
A-1
Preferred Stock, Akili Series
A-2
Preferred Stock, Akili Series B Preferred Stock, Akili Series C Preferred Stock and Akili Series D Preferred Stock (collectively, the “Akili preferred stock”) will be canceled and converted into the right to receive a number of shares of Akili, Inc. common stock equal to the product obtained by multiplying the Merger Consideration Per Fully Diluted Share by the number of shares of Akili common stock held by the holder thereof with respect to such preferred stockas of immediately prior to the Merger (after giving effect to the conversion of all Akili preferred stock into Akili common stock in accordance with the Amended and Restated Certificate of Incorporation of Akili, dated as of May 25, 2021) with fractional shares rounded down to the nearest whole share; and
|
• |
all Akili Options outstanding as of immediately prior to the Merger will be converted into Akili, Inc. Options and the exercise price thereof shall be adjusted. See “
—Treatment of Akili Options
—Treatment of Akili Warrants
|
a) |
when the volume weighted average price of Akili, Inc. common stock has exceeded $15.00 for 20 trading days within any 30 consecutive trading day period prior to the fifth anniversary of the Closing Date, a
one-time
release of
one-third
of the Earnout Shares;
|
b) |
when the volume weighted average price of Akili, Inc. common stock has exceeded $20.00 for 20 trading days within any 30 consecutive trading day period prior to the fifth anniversary of the Closing Date, a
one-time
release of
one-third
of the Earnout Shares; and
|
c) |
when the volume weighted average price of Akili, Inc. common stock has exceeded $30.00 for 20 trading days within any 30 consecutive trading day period prior to the fifth anniversary of the Closing Date, a
one-time
release of
one-third
of the Earnout Shares (each of the events in clauses (a)—(c) above, a “Triggering Event”).
|
a) |
any change in applicable laws or GAAP or any interpretation thereof following the date of the Merger Agreement;
|
b) |
any change in interest rates or economic, political, business or financial market conditions generally;
|
c) |
the taking of any action required by the Merger Agreement;
|
d) |
any natural disaster (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions or similar occurrences) or change in climate;
|
e) |
any epidemic, pandemic or other disease outbreak (including
COVID-19
and any
COVID-19
Measures);
|
f) |
any acts of terrorism or war, the outbreak or escalation of hostilities, geopolitical conditions, local, national or international political conditions;
|
g) |
any failure of Akili to meet any projections or forecasts (provided that this clause would not prevent a determination that any Event not otherwise excluded from the definition of Akili Material Adverse Effect underlying such failure to meet projections or forecasts has resulted in a Akili Material Adverse Effect);
|
h) |
any Events generally applicable to the industries or markets in which Akili and its subsidiaries operate (including increases in the cost of products, services, supplies, materials or other goods or services purchased from third party suppliers);
|
i) |
the announcement of the Merger Agreement and consummation of the transactions contemplated thereby, including any termination of, reduction in or similar adverse impact on relationships, contractual or otherwise, with any landlords, customers, suppliers, distributors, partners or employees of Akili and its subsidiaries (it being understood that this clause will be disregarded for purposes of the representation and warranty in Section 4.4 of the Merger Agreement and the corresponding condition to Closing);
|
j) |
any matter set forth on Akili’s disclosure letter;
|
k) |
any Events to the extent actually known by certain individuals identified in SCS’s disclosure letter on or prior to the date of the Merger Agreement; or
|
l) |
any action taken by, or at the request of, SCS or Merger Sub.
|
• |
change or amend the governing documents of Akili or any of Akili’s subsidiaries or form or cause to be formed any new subsidiary of Akili;
|
• |
make or declare any dividend or distribution to stockholders of Akili or make any other distributions in respect of any of Akili’s capital stock or equity interests, except dividends and distributions by a wholly-owned Subsidiary of Akili to Akili or another wholly-owned subsidiary of Akili;
|
• |
split, combine, reclassify, recapitalize or otherwise amend any terms of any shares or series of Akili’s or any of its subsidiaries’ capital stock or equity interests, except for any such transaction by a wholly owned subsidiary of Akili that remains a wholly owned subsidiary of Akili after consummation of such transaction;
|
• |
purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock, membership interests or other equity interests of Akili or its subsidiaries, except for (i) the acquisition by Akili or any of its subsidiaries of any shares of capital stock, membership interests or other equity interests of Akili or its subsidiaries in connection with the forfeiture or cancellation of such interests without payment of any consideration by Akili or its subsidiaries, (ii) the withholding of shares of Akili Common Stock to satisfy tax obligations with respect to Akili Options or (iii) transactions between Akili and any wholly-owned subsidiary of Akili or between wholly owned subsidiaries of Akili;
|
• |
enter into, modify in any material respect or terminate (other than expiration in accordance with its terms) any material contracts or any real property lease, other than in the ordinary course of business consistent with past practice;
|
• |
sell, assign, transfer, convey, lease or otherwise dispose of any material tangible assets or properties of Akili or its subsidiaries, except for (i) dispositions of obsolete or worthless equipment (ii) transactions among Akili and its wholly owned subsidiaries or among its wholly owned subsidiaries and (iii) transactions in the ordinary course of business consistent with past practice;
|
• |
acquire any ownership interest in any real property, other than in the ordinary course of business;
|
• |
except as required by an existing benefit plan, or certain contractual obligations, (i) grant any severance, retention, change in control or termination or similar pay, except in connection with the promotion, hiring or termination of employment of any employee with an annual base compensation of less than $200,000 in the ordinary course of business consistent with past practice, (ii) make any material change in the key management structure of Akili or any of Akili’s subsidiaries or hire, promote, demote or terminate the employment of employees of Akili or any of Akili’s subsidiaries with an annual base compensation of $200,000 or above, other than terminations for cause or due to death or disability, (iii) terminate, adopt, enter into or materially amend any benefit plan, (iv) materially increase the cash compensation or bonus opportunity of any employee, officer, director or other individual service provider, except in the ordinary course of business consistent with past practice, (v) establish any trust or take any other action to secure the payment of any compensation payable by Akili or any of Akili’s subsidiaries or (vi) take any action to amend or waive any performance or vesting criteria or to accelerate the time of payment of vesting of any compensation or benefit payable by Akili or any of Akili’s subsidiaries, except in the ordinary course of business consistent with past practice;
|
• |
acquire by merger or consolidation with, or merge or consolidate with, or purchase substantially all or a material portion of the assets of, any corporation, partnership, association, joint venture or other business organization or division thereof, other than any such transaction (i) in which the aggregate
|
consideration does not exceed, individually or in the aggregate, $10,000,000 and (ii) that is not reasonably expected to, individually or in the aggregate, materially impair the ability of Akili to perform its obligations under the Merger Agreement;
|
• |
make any material loans or material advances to any person, except for (i) advances to employees, officers or independent contractors of Akili or any of Akili’s subsidiaries for indemnification, attorneys’ fees, travel and other expenses incurred in the ordinary course of business consistent with past practice, (ii) loans or advances among Akili and its wholly owned subsidiaries or among the wholly-owned subsidiaries and (iii) extended payment terms for customers in the ordinary course of business;
|
• |
(i) make, change or revoke any material tax election, (ii) amend, modify or otherwise change any filed material tax return, (iii) adopt or request permission of any taxing authority to change any accounting method for tax purposes or change any tax accounting period in respect of material taxes, (iv) enter into any “closing agreement” as described in Section 7121 of the Code (or any similar provision of state, local or foreign law) with any governmental authority, (v) seek or apply for any tax ruling, (vi) settle any claim or assessment in respect of any material taxes, (vii) knowingly surrender or allow to expire any right to claim a refund of any material taxes or (viii) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of any material taxes or in respect to any material tax attribute that would give rise to any claim or assessment of taxes;
|
• |
take or knowingly fail to take any action, where such action or failure to act could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations;
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• |
(i) incur or assume any indebtedness or guarantee any indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of Akili or any of Akili’s subsidiaries or guaranty any debt securities of another person, other than any indebtedness or guarantee (A) incurred in the ordinary course of business pursuant to interest rate protection agreements and currency obligation swaps, hedges or similar arrangements, or letters of credit, bank guarantees, bankers’ acceptances and other similar instruments entered into in connection with leased real property, or (B) incurred between Akili and any of its wholly owned subsidiaries or between any of such wholly-owned subsidiaries; or (ii) discharge any secured or unsecured obligation or liability (whether accrued, absolute, contingent or otherwise) which individually or in the aggregate exceed $1,000,000, except as otherwise contemplated by the Merger Agreement or as such obligations become due;
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• |
issue any additional shares of Akili Capital Stock or securities exercisable for or convertible into Akili Capital Stock, or grant any additional equity or equity-based compensation (including Akili Options), other than (i) shares of Akili common stock issuable upon exercise of Akili Options outstanding on the date of the Merger Agreement in accordance with their terms as in effect as of the date of the Merger Agreement, or the exercise of warrants to purchase Akili Capital Stock or the conversion of any Akili Capital Stock in accordance with its terms as in effect as of the date of the Merger Agreement, in each case, that are outstanding as of the date of the Merger Agreement;
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• |
adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of Akili or its subsidiaries (other than the Merger);
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• |
waive, release, settle, compromise or otherwise resolve any inquiry, investigation, claim, action, litigation or other legal proceedings, except where such waivers, releases, settlements or compromises involve only the payment of monetary damages in an amount less than $1,000,000 individually and in the aggregate;
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• |
grant to, or agree to grant to, any person a license, covenant not to sue or other right under any intellectual property that is material to Akili and its subsidiaries, or sell, transfer, assign or otherwise dispose of, abandon or permit to lapse any rights to any such intellectual property (other than
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nonexclusive licenses entered into in the ordinary course of business), except for the expiration of Akili’s registered intellectual property in accordance with the applicable statutory term (or in the case of domain names, applicable registration period);
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• |
disclose or agree to disclose to any person (other than SCS or any of its representatives) any material trade secret or any other material confidential or proprietary information,
know-how
or process of Akili or any of its subsidiaries other than in the ordinary course of business or pursuant to written obligations to maintain the confidentiality thereof;
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• |
make or commit to make capital expenditures other than in an amount not in excess of the amount set forth in the Akili Disclosure Letter, in the aggregate;
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• |
enter into, modify, amend, renew or extend any collective bargaining agreement or similar labor agreement, other than as required by applicable law, or recognize or certify any labor union, labor organization, or group of employees of Akili or its subsidiaries as the bargaining representative for any employees of Akili or its subsidiaries;
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• |
waive the restrictive covenant obligations of any current or former employee of Akili or any of Akili’s subsidiaries;
|
• |
limit the right of Akili or any of Akili’s subsidiaries to engage in any line of business or in any geographic area, to develop, market or sell products or services, or to compete with any person, in each case, except where such limitation does not, and would not be reasonably likely to, individually or in the aggregate, materially and adversely affect, or materially disrupt, the operation of the businesses of Akili and its subsidiaries, taken as a whole, in the ordinary course of business consistent with past practice;
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• |
amend in a manner materially detrimental to Akili or any of Akili’s subsidiaries, terminate, permit to lapse or fail to use reasonable best efforts to maintain any material governmental approval or material permit required for the conduct of the business of Akili or any of Akili’s subsidiaries to be conducted in all material respects as conducted on the date of the Merger Agreement or as contemplated as of the date of the Merger Agreement; or
|
• |
enter into any agreement to do any of the above actions prohibited under the Merger Agreement.
|
• |
seek any approval from SCS’s shareholders to change, modify or amend the Trust Agreement or the governing documents of SCS or Merger Sub, except as contemplated by the transaction proposals;
|
• |
(x) make or declare any dividend or distribution to the shareholders of SCS or make any other distributions in respect of any of SCS’s or Merger Sub’s Capital Stock, share capital or equity interests, (y) split, combine, reclassify or, except as contemplated by the Condition Precedent Proposals, otherwise amend any terms of any shares or series of SCS’s or Merger Sub’s Capital Stock or equity interests or (z) purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock, share capital or membership interests, warrants or other equity interests of SCS or Merger Sub other than a redemption of shares of SCS Common Stock required to be made in connection with the Merger;
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• |
(i) make, change or revoke any material tax election, (ii) amend, modify or otherwise change any filed material tax return, (iii) adopt or request permission of any taxing authority to change any accounting method for tax purposes, (iv) enter into any “closing agreement” as described in Section 7121 of the Code (or any similar provision of state, local or foreign law) with any governmental authority, (v) settle any claim or assessment in respect of a material amount of taxes, (vi) knowingly surrender or allow to expire any right to claim a refund of a material amount of taxes or (vii) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of taxes or in respect to any material tax attribute that would give rise to any claim or assessment of taxes;
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• |
take or knowingly fail to take any action, where such action or failure to act could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations;
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• |
enter into, renew or amend in any material respect, any transaction or material contract with an affiliate of SCS or Merger Sub (including, for the avoidance of doubt, (x) the Sponsor and (y) any person in which the Sponsor has a direct or indirect legal, contractual or beneficial ownership interest of 5% or greater);
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• |
incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any indebtedness or otherwise incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any other material liabilities, debts or obligations other than (x) in support of the ordinary course operations of SCS, or incident to the consummation of the transactions contemplated by the Merger Agreement or any of the Ancillary Agreements (as defined below), which are not, individually or in the aggregate, material to SCS, (y) pursuant to any material contract set forth on the SCS disclosure letter or (z) incurred between SCS and Merger Sub;
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• |
waive, release, compromise, settle or satisfy any pending or threatened material claim (which shall include any pending or threatened action);
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• |
(i) issue any securities of SCS or any option, warrant, right or security (including debt securities) convertible, exchangeable or exercisable into, or for, securities of SCS, other than the issuance of the Aggregate Merger Consideration or in respect of the PIPE Investment substantially concurrently with the Closing, or (ii) grant any options, warrants or other equity-based awards with respect to securities of SCS not outstanding on the date of the Merger Agreement; or
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• |
enter into any agreement to do any of the above actions prohibited under the Merger Agreement.
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• |
prior to the Closing Date, obtain approval for and adopt an equity incentive plan in the form attached to the Merger Agreement (the “Incentive Equity Plan”), which Incentive Equity Plan will become effective upon the Closing Date with any changes or modifications thereto as Akili and SCS may mutually agree (such agreement not to be unreasonably withheld, conditioned or delayed by any of Akili or SCS, as applicable);
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• |
prior to the Closing Date, obtain approval for and adopt an employee stock purchase plan in the form attached to the Merger Agreement (the “ESPP”), which ESPP shall become effective upon the Closing Date with any changes or modifications thereto as Akili and SCS may mutually agree (such agreement not to be unreasonably withheld, conditioned or delayed by any of Akili or SCS, as applicable);
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• |
within two business days following the expiration of the
sixty-day
period after SCS has filed current Form 10 information with the SEC, file a registration statement on Form
S-8
(or other applicable form) with respect to the Akili, Inc. common stock issuable under the Incentive Equity Plan and ESPP and use reasonable efforts to maintain the effectiveness of such registration statement(s) (and the current status of the prospectus or prospectuses contained therein) for so long as awards granted thereunder remain outstanding;
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• |
take certain actions so that the Trust Amount will be released from the trust account and so that the trust account will terminate thereafter, in each case, pursuant to the terms and subject to the terms and conditions of the Trust Agreement;
|
• |
during the Interim Period, ensure that SCS remains listed as a public company on Nasdaq and prepare and submit to Nasdaq a listing application in connection with the transactions contemplated by the Merger Agreement, and use its reasonable best efforts to cause: (a) such listing application to have been approved by Nasdaq: (b) SCS to satisfy all applicable continuing listing requirements of Nasdaq; and (c) the securities covered by this registration statement to be approved for listing on NASDAQ with the trading ticker “AKLI,” in each case, as promptly as reasonably practicable after the date of the Merger Agreement;
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• |
during the Interim Period, not, and cause its subsidiaries not to, and instruct its and their representatives not to, initiate any negotiations or enter into any agreements for certain alternative transactions and to terminate any such negotiations ongoing as of the date of the Merger Agreement;
|
• |
subject to the terms of SCS’s governing documents, take all such action within its power as may be necessary or appropriate such that immediately following the effective time of the Merger:
|
• |
the board of directors of SCS shall consist of three classes, each holding three-year terms, with the term of the first class of directors expiring at the first annual meeting of stockholders of SCS following the Closing, the term of the second class of directors expiring at the second annual meeting of stockholders of SCS following the Closing and the term of the third class of directors expiring at the third annual meeting of stockholders of SCS following the Closing (such third class, “Class III”); and
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• |
the board of directors shall consist of a number of directors determined by the board of directors of Akili, a majority of whom shall be “independent” directors for the purposes of Nasdaq rules, and shall include one (1) independent director nominated by the Sponsor, who shall be Chamath Palihapitiya (who shall serve as chairman of the board of directors of Akili, Inc.) or another individual to be nominated by the Sponsor (provided that any such other individual shall be subject to the prior approval of the Company, such approval not to be unreasonably withheld, conditioned or delayed, and shall be qualified to serve on the audit committee of the board of directors of Akili, Inc. as an “audit committee financial expert” (as defined under applicable SEC rules)), and which independent director nominated by the Sponsor shall serve in Class III; subject to approval of SCS’s shareholders, cause the Domestication to become effective prior to the effective time of the Merger (see “
Domestication Proposal
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• |
after the effective time of the Merger, indemnify and hold harmless (i) each present and former director and officer of Akili and each of its subsidiaries and (ii) the Sponsor, each present and former director, officer and affiliate of the Sponsor, SCS and each of their respective subsidiaries against any costs, expenses, damages or liabilities incurred in connection with any legal proceeding, to the fullest extent that would have been permitted under applicable law and the applicable governing documents to indemnify such person, subject to the right to indemnification in favor of each of the Sponsor and each
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present and former director, officer and affiliate of Sponsor, being subject to the same limitations as if such person were an officer or director of Akili, Inc. as of the applicable time;
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• |
maintain, and cause its subsidiaries to maintain for a period of not less than six years from the effective time of the Merger (i) provisions in its governing documents and those of its subsidiaries concerning the indemnification and exoneration of its subsidiaries and their subsidiaries’ former and current officers, directors and employees and agents, no less favorable than as contemplated by the applicable governing documents of Akili immediately prior to the effective time of the Merger and (ii) a directors’ and officers’ liability insurance policy covering those persons who are currently covered by SCS’s, Akili’s or their respective subsidiaries’ directors’ and officers’ liability insurance policies on terms not less favorable than the terms of such current insurance coverage;
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• |
on the Closing Date, enter into customary indemnification agreements reasonably satisfactory to each of Akili and SCS with the post-Closing directors and officers of Akili, Inc., which indemnification agreements will continue to be effective following the Closing;
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• |
from the date of the Merger Agreement through the effective time of the Merger, keep current and timely file all reports required to be filed or furnished with the SEC and otherwise comply in all material respects with its reporting obligations under applicable law;
|
• |
except as otherwise approved by Akili (which approval shall not be unreasonably withheld, conditioned or delayed) SCS shall not (other than changes that are solely ministerial and other de minimis changes) permit any amendment or modification to be made to, permit any waiver (in whole or in part) of, or provide consent to modify (including consent to terminate), any provision or remedy under, or any replacements of, any of the Subscription Agreements, in each case, other than any assignment or transfer expressly permitted thereby (without any further amendment, modification or waiver to such permitted assignment or transfer provision) and so long as the initial party to such Subscription Agreement remains bound by its obligations with respect thereto in the event that the transferee or assignee, as applicable, does not comply with its obligations to consummate the purchase of shares of Akili, Inc. common stock contemplated thereby;
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• |
use its reasonable best efforts to take, or to cause to be taken, all actions required, necessary or that it deems to be proper or advisable to consummate the transaction contemplated by the Subscription Agreements on the terms described therein, including using its reasonable best efforts to enforce its rights under the Subscription Agreements to cause the PIPE Investors to pay to (or as directed by) SCS the applicable purchase price under each PIPE Investor’s applicable Subscription Agreement in accordance with its terms; and
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• |
during the interim period, use its reasonable best efforts to keep Akili reasonably informed with respect to the PIPE investment and consider in good faith any feedback from Akili with respect to such matters, including that SCS shall give Akili prompt written notice: (i) of any requested amendment to any Subscription Agreement; (ii) of any breach or default to the knowledge of SCS (or any event or circumstance that, to the knowledge of SCS, with or without notice, lapse of time or both, would give rise to any breach or default) by any party to any Subscription Agreement known to SCS; (iii) of the receipt of any written notice or other written communication from any party to any Subscription Agreement with respect to any actual, or to the knowledge of SCS, potential, threatened or claimed expiration, lapse, withdrawal, breach, default, termination or repudiation by any party to any Subscription Agreement or any provisions of any Subscription Agreement; and (iv) if SCS does not expect to receive all or any portion of the applicable purchase price under any Subscription Agreement in accordance with its terms.
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• |
subject to confidentiality obligations that may be applicable to information furnished to Akili or any of its subsidiaries by third parties and except for any information that is subject to attorney-client privilege, and to the extent permitted by applicable law (including any applicable
COVID-19
Measures), afford SCS and its accountants, counsel and other representatives reasonable access during the Interim Period to their properties, books, contracts, commitments, tax returns, records and appropriate officers and employees and furnish such representatives with all financial and operating data and other information concerning the affairs of Akili and its subsidiaries that are in the possession of Akili or its subsidiaries as such representatives may reasonably request;
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as soon as reasonably practicable following the date of the Merger Agreement. Akili shall deliver to SCS (i) the unaudited condensed consolidated balance sheet and statements of operations and comprehensive loss, cash flows and stockholders’ equity of Akili and its subsidiaries as of and for the nine-month periods ended September 30, 2021 and 2020, (ii) the audited consolidated balance sheets and statements of operations and comprehensive loss, cash flows and stockholders’ equity of Akili and its subsidiaries as of and for the twelve (12) month period ended December 31, 2021, together with the auditor’s reports thereon and (iii) for any quarterly period ending at least 45 days prior to the Closing Date, the unaudited consolidated balance sheets and statements of operations and comprehensive loss, cash flows and stockholders’ equity of Akili and its subsidiaries as of and for such quarter, in each case, which comply in all material respects with the applicable accounting requirements and with the rules and regulations of the SEC, the Exchange Act and the Securities Act applicable to a registrant;
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• |
at or prior to Closing, terminate and settle all Affiliate Agreements (as defined in the Merger Agreement) set forth in the applicable section of Akili’s disclosure letter without further liability to SCS, Akili or any of its subsidiaries; and
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• |
during the Interim Period, not, and to use reasonable best efforts to cause its representatives to not, (i) initiate any negotiations with any person with respect to certain alternative transactions, (ii) enter into an agreement with respect to any such alternative transactions or proposed transactions, (iii) grant any waiver, amendment or release under any confidentiality agreement or the anti-takeover laws of any state, in each case, in connection with an alternative transaction or (iv) otherwise knowingly facilitate any inquiries, proposals, discussions, or negotiations or any effort or attempt by any person to make a proposal with respect to any such alternative transaction.
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• |
Each of SCS and Akili will (and, to the extent required, will cause its affiliates to) comply promptly, but in no event later than ten business days after the date of the Merger Agreement, with the notification and reporting requirements of the HSR Act and (ii) as soon as practicable, make such other filings with any foreign governmental authorities as may be required under any applicable similar foreign law.
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• |
Each of SCS and Akili will substantially comply with any information or document requests with respect to antitrust matters as contemplated by the Merger Agreement.
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• |
Each of SCS and Akili will (x) request early termination (if available) of any waiting period or periods under the HSR Act and exercise its reasonable best efforts to (i) obtain termination or expiration of the waiting period under the HSR Act and (ii) prevent the entry, in any legal proceeding brought by an antitrust authority or any other person, of any governmental order which would prohibit, make unlawful or delay the consummation of the transactions contemplated by the Merger Agreement and (y) take certain other actions to cooperate to avoid any governmental order from an antitrust authority
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that would delay, enjoin, prevent, restrain or otherwise prohibit the consummation of the Merger, including sharing relevant information with the other parties thereto for such purposes (subject to, as applicable, a requirement to obtain Akili’s prior written consent with respect to certain such actions identified above as contemplated by the Merger Agreement).
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• |
SCS and Akili will jointly prepare and SCS will file with the SEC the proxy statement/registration statement in connection with the registration under the Securities Act of (i) the shares of Akili, Inc. common stock to be issued in connection with the Domestication and (ii) the shares of Akili, Inc. common stock that constitute the Aggregate Merger Consideration and the Earnout Shares.
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• |
Each of SCS and Akili will use its reasonable best efforts to cause the proxy statement/registration statement to comply with the rules and regulations promulgated by the SEC, to have the Registration Statement (as defined below) declared effective under the Securities Act as promptly as practicable after such filing and to keep the Registration Statement effective as long as is necessary to consummate the transactions contemplated by the Merger Agreement and otherwise ensure that the information contained therein contains no untrue statement of material fact or material omission.
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SCS will, as promptly as practicable after the registration statement is declared effective under the Securities Act, (i) disseminate the proxy statement to shareholders of SCS, (ii) give notice, convene and hold a meeting of the shareholders to vote on the Condition Precedent Proposals, in each case in accordance with its governing documents then in effect and the Nasdaq Listing Rules for a date no later than 30 business days following the date the registration statement is declared effective, (iii) solicit proxies from the holders of public shares of SCS to vote in favor of each of the Condition Precedent Proposals, and (iv) provide its shareholders (including the holders of SCS Class A ordinary shares) with the opportunity to elect to effect a Redemption.
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• |
Akili will use its reasonable best efforts to obtain the requisite stockholder approval necessary to consummate the Merger Agreement and the transactions contemplated thereby, including the Merger (the “Akili Stockholder Approvals”), by written consent of collective holders of shares of Akili Capital Stock sufficient to obtain Akili Stockholder Approval promptly following the time at which the registration statement shall have been declared effective under the Securities Act and delivered or otherwise made available to stockholders, and in any event within one business day after the registration statement shall have been declared effective.
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• |
SCS and Akili will each, and will each cause their respective subsidiaries to use reasonable best efforts to obtain all material consents and approvals of third parties that any of SCS, Akili, or their respective affiliates are required to obtain in order to consummate the Merger.
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Each of Akili and SCS will, prior to the Closing, use all reasonable efforts to approve in advance in accordance with the applicable requirements of Rule
16b-3
promulgated under the Exchange Act, any dispositions of the Akili capital stock (including derivative securities with respect to the Akili capital stock) or Akili, Inc. common stock and acquisitions of Akili, Inc. common stock (including derivative securities with respect to Akili, Inc. common stock) resulting from the transactions contemplated by the Merger Agreement by each officer or director of SCS or Akili who is subject to Section 16 of the Exchange Act (or who will become subject to Section 16 of the Exchange Act) as a result of the transactions contemplated by the Merger Agreement.
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Each of Akili and SCS will, and will cause their respective subsidiaries and its and their controlled affiliates and representatives to, prior to the Closing, reasonably cooperate in a timely manner in connection with any additional financing arrangement the parties mutually agree to seek in connection with the transactions contemplated by the Merger Agreement.
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• |
Until the earlier of the Closing or termination of the Merger Agreement, each of SCS and Akili will notify the other promptly after learning of any shareholder demand (or threat thereof) or other shareholder claim, action, suit, audit, examination, arbitration, mediation, inquiry, legal proceeding, or investigation, whether or not before any governmental authority (including derivative claims), relating
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to the Merger Agreement, or any of the transactions contemplated thereby (collectively, “Transaction Litigation”) commenced or to the knowledge of SCS or Akili, as applicable, threatened in writing against (x) in the case of SCS, SCS, any of SCS’s controlled affiliates or any of their respective officers, directors, employees or shareholders (in their capacity as such) or (y) in the case of Akili, Akili, any of Akili’s Subsidiaries or controlled affiliates or any of their respective officers, directors, employees or shareholders (in their capacity as such). SCS and Akili have also agreed to (i) keep the other reasonably informed regarding any Transaction Litigation, (ii) give the other the opportunity to, at its own cost and expense, participate in the defense, settlement and compromise of any such Transaction Litigation and reasonably cooperate with the other in connection with the defense, settlement and compromise of any such Transaction Litigation, (iii) consider in good faith the other’s advice with respect to any such Transaction Litigation and (iv) reasonably cooperate with each other with respect to any Transaction Litigation; provided, however, that in no event will (x) Akili, any of Akili’s affiliates or any of their respective officers, directors, employees or shareholders settle or compromise any Transaction Litigation without the prior written consent of SCS (not to be unreasonably withheld, conditioned or delayed) or (y) SCS, any of SCS’s affiliates or any of their respective officers, directors, employees or shareholders settle or compromise any Transaction Litigation without Akili’s prior written consent (not to be unreasonably withheld, conditioned or delayed).
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• |
the approval of the Condition Precedent Proposals by SCS’s shareholders will have been obtained (the “SCS Shareholder Approval”);
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• |
the Akili Stockholder Approvals will have been obtained;
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• |
the waiting period or periods under the HSR Act applicable to the transactions contemplated by the Merger Agreement, or the (i) Earnout Escrow Agreement, (ii) the
Lock-Up
Agreement, (iii) the Sponsor Support Agreement, and (iv) Company Holders Support Agreement (clauses (i)—(iv), collectively, the “Ancillary Agreements”) will have expired or been terminated;
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• |
there will not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award (entered by or with any federal, state, provincial, municipal, local or foreign government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court or tribunal (a “Governmental Order”), in each case, to the extent such governmental authority has jurisdiction over the parties to the Merger Agreement and the transactions contemplated thereby), statute, rule or regulation enjoining or prohibiting the consummation of the Merger;
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• |
SCS will have at least $5,000,001 of net tangible assets (as determined in accordance with Rule
3a51-1(g)(1)
of the Exchange Act) after giving effect to the PIPE Investment and satisfaction of SCS’s obligations to its shareholders (if any) that exercise their rights to redeem their public shares pursuant to the Cayman Constitutional Documents;
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• |
as of immediately following the effective time of the Merger, the Board of Directors of Akili, Inc. shall consist of the number of directors, and be otherwise constituted in accordance with the Merger Agreement (assuming that each such director then satisfies the applicable Nasdaq requirements and is willing to serve); provided that Akili will have performed the covenants of Akili in the Merger Agreement with respect to nomination of directors;
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the shares of Akili, Inc. common stock to be issued in connection with the Domestication and Merger will have been approved for listing by Nasdaq (subject to official notice of issuance) and, as of immediately following the effective time of the Merger, SCS shall be in compliance, in all material respects, with applicable continuing listing requirements of Nasdaq, and SCS shall not have received any notice of
non-compliance
therewith from Nasdaq that has not been cured or would not be cured at or immediately following the effective time of the Merger; and
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• |
the registration statement of which this proxy statement/prospectus forms a part (the “Registration Statement”) will have become effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement will have been issued and no proceedings for that purpose will have been initiated or threatened by the SEC and not withdrawn.
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• |
(i) each of the fundamental representations and warranties of Akili contained in the Merger Agreement (disregarding any qualifications and exceptions contained therein relating to materiality, material adverse effect or any similar qualification or exception) will be true and correct in all material respects as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all material respects at and as of such earlier date and (ii) each of the representations and warranties of Akili contained in the Merger Agreement other than the fundamental representations and warranties (disregarding any qualifications and exceptions contained therein relating to materiality, material adverse effect or any similar qualification or exception) will be true and correct as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct at and as of such date, except for, in the case of this clause (ii), inaccuracies or omissions that would not, individually or in the aggregate, reasonably be expected to have a Akili Material Adverse Effect; and
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• |
each of the covenants of Akili to be performed as of or prior to the Closing will have been performed in all material respects.
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• |
(i) the representations and warranties of SCS contained in the Merger Agreement relating to the capitalization of SCS (disregarding any qualifications and exceptions contained therein relating to materiality, material adverse effect or any similar qualification or exception) will be true and correct in all material respects as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all material respects at and as of such date and (ii) each of the other representations and warranties of SCS contained in the Merger Agreement (disregarding any qualifications and exceptions contained therein relating to materiality, material adverse effect or any similar qualification or exception) will be true and correct, in each case as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct at and as of such date, except for, in the case of this clause (ii), inaccuracies or omissions that would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on SCS’s ability to consummate the transactions contemplated by the Merger Agreement;
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• |
each of the covenants of SCS to be performed as of or prior to the Closing will have been performed in all material respects;
|
• |
SCS will have filed a certificate of incorporation with the Secretary of State of Delaware and adopted bylaws in substantially the forms attached to the Merger Agreement;
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• |
the Domestication will have been completed as contemplated by the Merger Agreement and a time-stamped copy of the certificate issued by the Delaware Secretary of State in relation thereto will have been delivered to Akili (for additional information, see “
Domestication Proposal
|
• |
the Minimum Cash Condition. For more information, see “—
The Merger Agreement— Consideration—Closing Conditions
Minimum Cash Condition
above.
|
• |
by written consent of Akili and SCS;
|
• |
by Akili or SCS if any Governmental Order has become final and nonappealable which has the effect of making consummation of the Merger illegal or otherwise preventing or prohibiting consummation of the Merger;
|
• |
by Akili if the SCS Shareholder Approval has not been obtained by reason of the failure to obtain the required vote at a meeting of SCS’s shareholders duly convened therefor or at any adjournment thereof;
|
• |
by Akili if there has been a modification in recommendation of the board of directors of SCS with respect to any of the Condition Precedent Proposals;
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• |
prior to the Closing, by written notice to Akili from SCS in the event of certain uncured breaches on the part of Akili or if the Closing has not occurred on or before September 26, 2022, (such date, the “Agreement End Date”), unless SCS is in material breach of the Merger Agreement;
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• |
by SCS, if Akili shall not have obtained the requisite approval from its stockholders of the Merger Agreement and the transactions contemplated within two business days after the Registration Statement is declared effective under the Securities Act and delivered or otherwise made available to Akili’s stockholders; or
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• |
prior to the Closing, by written notice to SCS from Akili in the event of certain uncured breaches on the part of SCS or Merger Sub or if the Closing has not occurred on or before the Agreement End Date, unless Akili is in material breach of the Merger Agreement.
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(i) |
are in the biotechnology industry and can benefit from the extensive networks and insights SCS has built (SCS also expected to evaluate targets in related industries that can leverage advancements in biotechnology to improve outcomes for patients);
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(ii) |
are ready to operate in the scrutiny of public markets, with strong management, corporate governance and reporting policies in place;
|
(iii) |
have a profile that will be attractive to investors in public companies and are likely to be supported by investors in the public markets after the business combination;
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(iv) |
are at an inflection point, such as those requiring additional expertise, resources or capital;
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(v) |
exhibit unrecognized value or other characteristics that we believe have been misevaluated by the market based on our company-specific analysis and due diligence review; and
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(vi) |
will offer attractive risk-adjusted equity returns for our shareholders. Financial returns will be evaluated based on, among other factors, the potential for achieving clinical and commercial success and for creating value through business development initiatives.
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• |
Akili and the Business Combination.
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• |
Akili’s Large Addressable Market.
|
in cognition are associated with many different chronic diseases and acute illnesses, impacting approximately 85 million people in the United States. The U.S. ADHD market alone is approximately $10 billion annually. Recognition of cognitive issues across ailments is at an
all-time
high, and the SCS board believes that digital therapeutic solutions are beginning to disrupt more traditional pharmaceutical treatments in this large and growing patient population. The SCS board of directors believes that Akili, with EndeavorRX, its
first-of-its-kind,
FDA-cleared
and
CE-marked
prescription digital therapeutic for pediatric ADHD, is uniquely positioned to be a leading digital therapeutic platform that combines science and technology to address cognitive impairments in patients across various indications through a scalable, consumer-driven model.
|
• |
Akili’s Strong Clinical Validation.
The American Journal of Psychiatry
The Lancet Digital Health
Nature: Digital Medicine
|
• |
Akili’s Highly Attractive Business Model
|
• |
Akili’s Future Opportunities
go-to-market
8-12
years old in the second half of 2022, and
age-expansion
studies are currently underway to explore bringing Akili’s digital therapeutic solutions to ADHD patients in the
3-7
year old,
13-17
year old and adult categories. Beyond ADHD, Akili’s SSME technology, which underpins its EndeavorRX product, is currently in clinical trials in three other disease areas: post-operative cognitive dysfunction, chemotherapy induced cognitive impairment and cognitive dysfunction following
COVID-19
infection. Further, Akili has developed a pipeline of digital therapeutic product candidates which, together with SSME, will be focused on additional indications, including multiple sclerosis, major depressive disorder and autism spectrum disorder, among others.
|
• |
Experienced and Proven Management Team
co-founder
and Chief Executive Officer, Eddie Martucci, who previously helped launch PureTech Health’s digital health initiative. Akili’s management team also includes Chief Financial Officer Santosh Shanbhag, who has over 20 years of experience leading financial operations for U.S. and international organizations, including senior finance leadership roles at Vertex Pharmaceuticals, as well as other former officers and managers of Pfizer, GE Healthcare IT, LucasArts and Cubist. Under their leadership, Akili has pioneered a new digital approach to cognitive medicine. For additional information regarding Akili, Inc.’s executive officers, see the section entitled “
Management of Akili, Inc. Following the Business Combination
-
Executive Officers
|
• |
Best Available Opportunity.
|
• |
Continued Ownership by Existing Investors.
|
• |
Investment by Third Parties.
|
• |
Results of Due Diligence.
|
• |
extensive meetings and calls with Akili’s management team regarding its business, operations, technology, intellectual property and the proposed transaction; and
|
• |
review of materials related to Akili and its business made available by Akili, including financial statements, corporate documents, material contracts, clinical and scientific data, benefit plans, employee compensation and labor matters, intellectual property matters, information technology, privacy and personal data, litigation information, and other regulatory and compliance matters and other legal and business diligence.
|
• |
Terms of the Merger Agreement.
Business Combination Proposal
-
Related Agreements
|
• |
The Role of the Independent Directors
Business Combination Proposal
- Interests of SCS’s Directors and Executive Officers in the Business Combination
|
• |
Potential Inability to Complete the Merger.
|
• |
Akili’s Business Risks
.
COVID-19
pandemic and related macroeconomic uncertainty. The SCS board of directors considered that the failure of any of these activities to be completed successfully may decrease the actual benefits of the Business Combination and that SCS shareholders may not fully realize these benefits to the extent that they expected to retain the public shares following the completion of the Business Combination. For additional description of these risks, please see the section entitled “
Risk Factors
|
• |
Post-Business Combination Corporate Governance.
|
• |
Limitations of Review.
|
• |
No Survival of Remedies for Breach of Representations, Warranties or Covenants of Akili
.
|
• |
Litigation
.
|
• |
Fees and Expenses.
|
• |
Diversion of Management.
|
• |
Interests of SCS’s Directors and Executive Officers.
Business Combination Proposal
- Interests of SCS’s Directors and Executive Officers in the Business Combination
Business Combination Proposal
- Interests of SCS’s
|
Directors and Executive Officers in the Business Combination
|
• |
Prior to SCS’s initial public offering, the Sponsor purchased 5,750,000 SCS Class B ordinary shares for an aggregate purchase price of $25,000, or approximately $0.004 per share. In June 2021, the Sponsor transferred 30,000 SCS Class B ordinary shares to Vladimir Coric (an independent director of SCS, and with the Sponsor, “SCH’s initial shareholders”). On June 29, 2021, SCS effected a share capitalization with respect to the SCS Class B ordinary shares of 575,000 shares thereof, resulting in SCS’s initial shareholders holding an aggregate of 6,325,000 founder shares (up to 825,000 of which were subject to forfeiture depending on the extent to which the underwriter’s over-allotment option in the initial public offering was exercised), resulting in an effective purchase price per SCS Class B ordinary share of approximately $0.004. As a result of the underwriters’ election to partially exercise their over-allotment option, a total of 750,000 SCS Class B ordinary shares are no longer subject to forfeiture and 75,000 SCS Class B ordinary shares were forfeited, resulting in an aggregate of 6,250,000 SCS Class B ordinary shares outstanding. If SCS does not consummate a business combination by July 2, 2023 (or if such date is extended at a duly called extraordinary general meeting, such later date), it would cease all operations except for the purpose of winding up, redeeming all of
|
the outstanding public shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under the Cayman Islands Companies Act to provide for claims of creditors and the requirements of other applicable law.
In such event, the 6,250,000 SCS Class
B ordinary shares collectively owned by SCS’s initial shareholders would be worthless because following the redemption of the public shares, SCS would likely have few, if any, net assets and because the Sponsor and SCS’s directors and officers have agreed to waive their respective rights to liquidating distributions from the trust account in respect of any SCS Class
A ordinary shares and SCS Class
B ordinary shares held by it or them, as applicable, if SCS fails to complete a business combination within the required period. Additionally, in such event, the 640,000 private placement shares purchased by the Sponsor simultaneously with the consummation of SCS’s initial public offering for an aggregate purchase price of $6,400,000, will also expire worthless.
Lock-Up
Agreement, SCS believes such shares have less value. The 640,000 shares of Akili, Inc. common stock into which the 640,000 private placement shares held by the Sponsor will automatically convert in connection with the Merger (including after giving effect to the Domestication), if unrestricted and freely tradeable, would have had an aggregate market value of $ million based upon the closing price of $ per public share on Nasdaq on , 2022, the most recent practicable date prior to the date of this proxy statement/prospectus.
|
• |
As described above, in June 2021, the Sponsor transferred 30,000 SCS Class B ordinary shares to Vladimir Coric, which shares would be worthless if SCS does not consummate a business combination by July 2, 2023 (or if such date is extended at a duly called extraordinary general meeting, such later date). The 30,000 shares of Akili, Inc. common stock into which the 30,000 SCS Class B ordinary shares held by Mr. Coric will automatically convert in connection with the Merger (including after giving effect to the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $ million based upon the closing price of $ per public share on Nasdaq on , 2022, the most recent practicable date prior to the date of this proxy statement/prospectus. However, given that such 30,000 shares of Akili, Inc. common stock will be subject to certain transfer restrictions, including those described above pursuant to the
Lock-Up
Agreement, SCS believes such shares have less value.
|
• |
On September 24, 2021, SCS entered into a director restricted stock unit award agreement (the “Director RSU Award”), with Mr. Sundaram, providing for the grant of 30,000 restricted stock units to Mr. Sundaram, which grant is contingent on both the consummation of an initial business combination with SCS and a shareholder approved equity plan. The Director RSU Award will vest at the Closing but will not settle into shares of Akili, Inc. common stock until a date, selected by Akili, Inc., that occurs between the Closing and March 15 of the year following the Closing. The 30,000 shares of Akili, Inc. common stock underlying the Director RSU, if unrestricted and freely tradable, would have had an aggregate market value of $ million based upon the closing price of $ per public share on Nasdaq on , 2022, the most recent practicable date prior to the date of this proxy statement/prospectus.
|
• |
The Sponsor (including its representatives and affiliates) and SCS’s directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to SCS. For
|
example, Mr. Palihapitiya and Mr. Mehta, each of whom serves as an officer and director of SCS and may be considered an affiliate of the Sponsor, are also affiliated with DNAB, DNAC and DNAD, all of which are blank check companies incorporated as Cayman Islands exempted companies for the purpose of effecting their respective initial business combinations. Mr. Palihapitiya is the Chief Executive Officer and Chairman of the Board of Directors of DNAB, DNAC and DNAD, Mr. Mehta is the President and a director of DNAB, DNAC and DNAD, and each of our other officers is also an officer of DNAB, DNAC and DNAD, and each owes fiduciary duties under Cayman Islands law to DNAB, DNAC and DNAD. Mr. Palihapitiya is also the Chief Executive Officer and Chairman of the Board of Directors of Social Capital Hedosophia Holdings Corp. IV (“IPOD”) and Social Capital Hedosophia Holdings Corp. VI (“IPOF”) and owes fiduciary duties under Cayman Islands law to IPOD and IPOF. The Sponsor and SCS’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to SCS completing its initial business combination. Moreover, certain of SCS’s directors and officers have time and attention requirements for investment funds of which affiliates of the Sponsor are the investment managers. SCS’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to SCS, and the other entities to which they owe certain fiduciary or contractual duties, including DNAB, DNAC and DNAD, IPOD and IPOF, as applicable. Accordingly, they may have had conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in SCS’s favor and such potential business opportunities may be presented to other entities prior to their presentation to SCS, subject to applicable fiduciary duties under Cayman Islands law. SCS’s Cayman Constitutional Documents provide that SCS renounces its interest in any corporate opportunity offered to any director or officer of SCS unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of SCS and it is an opportunity that SCS is able to complete on a reasonable basis.
|
• |
SCS’s existing directors and officers will be eligible for continued indemnification and continued coverage under SCS’s directors’ and officers’ liability insurance after the Merger and pursuant to the Merger Agreement. The Sponsor, for which Mr. Palihapitiya and Mr. Mehta serve as managers and officers and in which they have an indirect ownership interest, will also be entitled to certain indemnification from SCS after the Merger pursuant to the Merger Agreement.
|
• |
The Sponsor Related PIPE Investors have subscribed for $135,400,000 of the PIPE Investment, for which they will receive up to 13,540,000 shares of Akili, Inc. common stock. The 13,540,000 shares of Akili, Inc. common stock which the Sponsor Related PIPE Investors have subscribed for in the PIPE Investment, if unrestricted and freely tradable, would have had an aggregate market value of $ million based upon the closing price of $ per public share on Nasdaq on , 2022, the most recent practicable date prior to the date of this proxy statement/prospectus. See “
Certain Relationships and Related Person Transactions—SCS—Subscription Agreements
|
• |
In the event that SCS fails to consummate a business combination within the prescribed time frame (pursuant to the Cayman Constitutional Documents), or upon the exercise of a redemption right in connection with the Business Combination, SCS will be required to provide for payment of claims of creditors that were not waived that may be brought against SCS within the ten years following such redemption. In order to protect the amounts held in SCS’s trust account, the Sponsor has agreed that it will be liable to SCS if and to the extent any claims by a third party (other than SCS’s independent auditors) for services rendered or products sold to SCS, or a prospective target business with which SCS has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case, net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under the indemnity of the underwriters of SCS’s initial public offering against certain liabilities, including liabilities under the Securities Act.
|
• |
SCS’s officers and directors, and their affiliates are entitled to reimbursement of
out-of-pocket
|
• |
Pursuant to the Registration Rights Agreement, the Sponsor and the Sponsor Related PIPE Investors will have customary registration rights, including shelf, demand and piggy-back rights, subject to cooperation and
cut-back
provisions, with respect to the shares of Akili, Inc. common stock held by such parties following the consummation of the Business Combination.
|
• |
Prominence, Predictability, and Flexibility of Delaware Law
|
Because of Delaware’s prominence as the state of incorporation for many major corporations, both the legislature and courts in Delaware have demonstrated the ability and a willingness to act quickly and effectively to meet changing business needs. The DGCL is frequently revised and updated to accommodate changing legal and business needs and is more comprehensive, widely used and interpreted than other state corporate laws. This favorable corporate and regulatory environment is attractive to businesses such as ours.
|
• |
Well-Established Principles of Corporate Governance
|
• |
Increased Ability to Attract and Retain Qualified Directors
|
The Cayman Constitutional
Documents |
The Proposed Organizational
Documents |
|||
Authorized Shares (Organizational Documents Proposal A)
|
The Cayman Constitutional Documents authorize 555,000,000 shares, consisting of 500,000,000 SCS Class A ordinary shares, 50,000,000 SCS Class B ordinary shares and 5,000,000 preference shares.
See paragraph 5 of the Existing Memorandum.
|
The Proposed Organizational Documents authorize shares, consisting of shares of Akili, Inc. common stock and shares of Akili, Inc. preferred stock.
See Article IV of the Proposed Certificate of Incorporation.
|
||
Authorize the Board of Directors to Issue Preferred Stock Without Stockholder Consent (Organizational Documents Proposal B)
|
The Cayman Constitutional Documents authorize the issuance of 5,000,000 preference shares with such designation, rights and preferences as may be determined from time to time by SCS’s board of directors. Accordingly, SCS’s board of directors is empowered | The Proposed Organizational Documents authorize the Board to issue all or any shares of preferred stock in one or more series and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative participating, optional or |
The Cayman Constitutional
Documents |
The Proposed Organizational
Documents |
|||
Takeovers by Interested Stockholders (Organizational Documents Proposal C)
|
The Cayman Constitutional Documents do not provide restrictions on takeovers of SCS by a related shareholder following a business combination. |
The Proposed Organizational Documents do not opt out of Section 203 of the DGCL, and therefore, Akili, Inc. will be subject to Section 203 of the DGCL relating to takeovers by interested stockholders.
Default rule under the DGCL.
|
||
Provisions Related to Status as Blank Check Company (Organizational Documents Proposal C)
|
The Cayman Constitutional Documents include various provisions related to SCS’s status as a blank check company prior to the consummation of a business combination.
See Article 49 of the Existing Articles.
|
The Proposed Organizational Documents do not include such provisions related to SCS’s status as a blank check company, which no longer will apply upon consummation of the Business Combination, as SCS will cease to be a blank check company at such time. |
• |
One of whom will be W. Edward Martucci, Ph.D., the Chief Executive Officer of Akili, and will be the Chief Executive Officer of Akili, Inc., who will be designated as a Class Director;
|
• |
One of whom will be Chamath Palihapitiya, the Chairman and Chief Executive Officer of SCS until the Closing, who will serve as the initial Chairman of Akili, Inc., and who will be designated as a Class Director;
|
• |
|
Name and Position
|
Dollar Value ($)
|
Number of
Shares |
||||||
Walter E. Martucci, II
|
— | — | ||||||
Chief Executive Officer
|
||||||||
Santosh Shanbhag
|
— | — | ||||||
Chief Financial Officer
|
||||||||
Jacqueline Studer
|
— | — | ||||||
Chief Legal Officer
|
||||||||
Anil S. Jina
|
— | — | ||||||
Chief Medical Offier
|
||||||||
All current directors who are not executive officers as a group
|
— | — | ||||||
All current executive officers as a group
|
— | — | ||||||
All employees, including all current officers who are not executive officers, as a group
|
— | — |
• |
financial institutions or financial services entities;
|
• |
broker-dealers;
|
• |
taxpayers that are subject to the
mark-to-market
|
• |
tax-exempt
entities;
|
• |
governments or agencies or instrumentalities thereof;
|
• |
insurance companies;
|
• |
mutual funds;
|
• |
individual retirement accounts and other
tax-deferred
accounts;
|
• |
regulated investment companies or real estate investment trusts;
|
• |
expatriates or former long-term residents of the United States;
|
• |
persons that actually or constructively own five percent or more of our voting shares or five percent or more of the total value of all classes of our shares;
|
• |
persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation;
|
• |
persons that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated or risk reduction transaction;
|
• |
persons required to accelerate the recognition of any item of gross income as a result of such income being recognized on an applicable financial statement;
|
• |
persons whose functional currency is not the U.S. dollar;
|
• |
controlled foreign corporations; or
|
• |
passive foreign investment companies.
|
• |
an individual citizen or resident of the United States,
|
• |
a corporation (or other entity or arrangement that is treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States or any state thereof or the District of Columbia,
|
• |
an estate whose income is subject to U.S. federal income tax regardless of its source, or
|
• |
a trust if (1) a U.S. court can exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place under applicable Treasury Regulations to be treated as a U.S. person.
|
(i) |
a statement that the Domestication is a Section 367(b) exchange (within the meaning of the applicable Treasury Regulations);
|
(ii) |
a complete description of the Domestication;
|
(iii) |
a description of any stock, securities or other consideration transferred or received in the Domestication;
|
(iv) |
a statement describing the amounts required to be taken into account for U.S. federal income tax purposes;
|
(v) |
a statement that the U.S. Holder is making the election that includes (A) a copy of the information that the U.S. Holder received from SCS establishing and substantiating the U.S. Holder’s all earnings and profits amount with respect to the U.S. Holder’s SCS Class A ordinary shares and (B) a representation that the U.S. Holder has notified SCS (or Akili, Inc.) that the U.S. Holder is making the election; and
|
(vi) |
certain other information required to be furnished with the U.S. Holder’s tax return or otherwise furnished pursuant to the Code or the Treasury Regulations.
|
(i) |
SCS were classified as a PFIC at any time during such U.S. Holder’s holding period in such SCS Class A ordinary shares; and
|
(ii) |
the U.S. Holder had not timely made (a) a QEF Election (as defined below) for the first taxable year in which the U.S. Holder owned such SCS Class A ordinary shares or in which SCS was a PFIC, whichever is later (or a QEF Election along with a purging election), or (b) a
mark-to-market
|
• |
the U.S. Holder’s gain will be allocated ratably over the U.S. Holder’s holding period for such U.S. Holder’s SCS Class A ordinary shares;
|
• |
the amount of gain allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain, or to the period in the U.S. Holder’s holding period before the first day of the first taxable year in which SCS was a PFIC, will be taxed as ordinary income;
|
• |
the amount of gain allocated to other taxable years (or portions thereof) of the U.S. Holder and included in such U.S. Holder’s holding period would be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and
|
• |
an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder in respect of the tax attributable to each such other taxable year of such U.S. Holder.
|
(i) |
such
non-U.S.
Holder is an individual who was present in the United States for 183 days or more in the taxable year of such disposition and certain other requirements are met, in which case any gain realized will generally be subject to a flat 30% U.S. federal income tax;
|
(ii) |
the gain is effectively connected with a trade or business of such
non-U.S.
Holder in the United States (and, if required by an applicable income tax treaty, attributable to a U.S. permanent establishment or fixed base maintained by such
non-U.S.
Holder), in which case such gain will be subject to U.S. federal income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to U.S. Holders, and any such gain of a
non-U.S.
Holder that is a corporation may be subject to an additional “branch profits tax” at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items; or
|
(iii) |
Akili, Inc. is or has been a U.S. real property holding corporation at any time during the shorter of the five-year period preceding such disposition and such
non-U.S.
Holder’s holding period and either (A) Akili, Inc.’s common stock has ceased to be regularly traded on an established securities market or (B) such
non-U.S.
Holder has owned or is deemed to have owned, at any time during the shorter of the five-year period preceding such disposition and such
non-U.S.
Holder’s holding period, more than 5% of outstanding Akili, Inc. common stock.
|
• |
the accompanying notes to the unaudited pro forma condensed combined financial statements;
|
• |
the historical unaudited condensed financial statements of SCS as of September 30, 2021 and for the period from February 25, 2021 (inception) through September 30, 2021 and the related notes included elsewhere in this proxy statement/prospectus;
|
• |
the historical unaudited condensed consolidated financial statements of Akili as of September 30, 2021 and for the nine months ended September 30, 2021 and the related notes included elsewhere in this proxy statement/prospectus;
|
• |
the historical audited consolidated financial statements of Akili as of December 31, 2020 and for the year ended December 31, 2020 and the related notes included elsewhere in this proxy statement/prospectus; and
|
• |
the sections entitled “
SCS’s Management’s Discussion and Analysis of Financial Condition and Results of Operations
Akili’s Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
• |
Assuming No Redemptions (Scenario 1):
|
• |
Assuming Maximum Redemptions (Scenario 2):
|
• |
each SCS Class A ordinary share and each SCS Class B ordinary share issued and outstanding immediately prior to the effective time of Domestication will be converted into one share of Akili, Inc. common stock;
|
• |
each share of Akili common stock and preferred stock outstanding as of immediately prior to the effective time of the Merger will be converted into a right to receive shares of Akili, Inc. common stock;
|
• |
all Akili Options outstanding as of immediately prior to the effective time of the Merger will be converted into an option to purchase shares of Akili, Inc. common stock (and the exercise price thereof will be adjusted);
|
• |
all Akili warrants (other than those that are deemed automatically exercised as a result of the Business Combination) will be converted into a warrant to purchase shares of Akili, Inc. common stock, and the exercise price thereof shall be adjusted, in each case, as set forth in the applicable Akili common stock warrant agreement; and
|
• |
SCS will be renamed “Akili, Inc.”.
|
(in thousands, except share and per share amounts)
|
Purchase price
|
Shares Issued
|
||||||
Share consideration to Akili
(a)(b)(c)
|
$ | 600,000 | 60,000,000 |
(a) |
The value of common stock issued to Akili included in the consideration is reflected at $10.00 per share as defined in the Merger Agreement.
|
(b) |
The total 60,000,000 consideration shares to be issued for all outstanding Akili common and preferred stock includes unexercised vested stock options of 2,662,428, unvested stock options of 3,112,347 and warrants to purchase 155,937 shares of Akili, Inc. Common Stock, conveted using the treasury stock method.
|
(c) |
Amount excludes 1,668,735 of unissued options of Akili and the issuance of 9,715,893 Earnout Shares, assuming no redemptions, and 7,840,893 Earnout Shares, assuming maximum redemptions, to certain eligible Akili equity holders as a result of Akili, Inc. satisfying certain conditions described above within the Earnout Period.
|
Assuming No
Redemption |
Assuming
Maximum Redemption |
|||||||||||||||
(in thousands, except share and per share amounts)
|
Shares
|
%
|
Shares
|
%
|
||||||||||||
SCS Public Stockholders
|
25,000,000 | 24.5 | % | — | 0 | % | ||||||||||
SCS Sponsor and Independent Director
|
6,890,000 | 6.7 | % | 6,890,000 | 8.9 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SCS
|
31,890,000 | 31.2 | % | 6,890,000 | 8.9 | % | ||||||||||
Akili Stockholders
(a)
|
54,077,514 | 52.9 | % | 54,077,514 | 70.1 | % | ||||||||||
PIPE Investors
|
16,200,000 | 15.9 | % | 16,200,000 | 21.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Shares at Closing (excluding certain Akili shares)
|
|
102,167,514
|
|
|
100
|
%
|
|
77,167,514
|
|
|
100
|
%
|
||||
Akili—Remaining Consideration Shares
(a)(b)
|
5,922,486 | 5,922,486 | ||||||||||||||
|
|
|
|
|||||||||||||
Total Shares at Closing (including certain Akili shares)
|
|
108,090,000
|
|
|
83,090,000
|
|
||||||||||
|
|
|
|
(a) |
Total consideration issued to Akili is $600.0 million or 60,000,000 shares ($10 per share price with no fractional shares). The total shares issued includes Akili common and preferred stock plus stock options and warrants to purchase common stock, converted using the treasury stock method. Accordingly, the consideration shares outstanding in the above table have been adjusted to exclude the portion of consideration shares that will be unissued at Closing. The Akili - Remaining Consideration Shares reflect a conversion ratio of 1.16.
|
(b) |
Amount excludes the issuance of 9,715,893 Earnout Shares, assuming no redemptions, and 7,840,893 Earnout Shares, assuming max redemptions, to certain eligible Akili equity holders as a result of Akili, Inc. satisfying certain performance conditions described above with the Earnout Period.
|
Historical
|
Scenario 1
Assuming No
Redemptions into Cash
|
Scenario 2
Assuming Maximum
Redemptions into Cash |
||||||||||||||||||||||||||||||
Social
Capital
(1)
|
Akili
|
Transaction
Accounting Adjustments |
Pro Forma
Statement of Operations |
Transaction
Accounting Adjustments |
Pro Forma
Statement of Operations |
|||||||||||||||||||||||||||
Revenue
|
$ | — | $ | 377 | $ | — | $ | 377 | $ | — | $ | 377 | ||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||||||||||
Cost of revenue
|
— | 243 | — | 243 | — | 243 | ||||||||||||||||||||||||||
Research and development
|
— | 12,739 | 334 | 4(c) | 13,073 | (65 | ) | 4(d) | 13,008 | |||||||||||||||||||||||
General and administrative
|
— | 28,675 | 712 | 4(c) | 29,656 | (137 | ) | 4(d) | 29,519 | |||||||||||||||||||||||
269 | 4(b) | |||||||||||||||||||||||||||||||
Operating and formation costs
|
269 | — | (269 | ) | 4(b) | — | — | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total operating expenses
|
269 | 41,657 | 1,046 | 42,972 | (202 | ) | 42,770 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Loss from operations
|
(269 | ) | (41,280 | ) | (1,046 | ) | (42,595 | ) | (202 | ) | (42,393 | ) | ||||||||||||||||||||
Interest earned on marketable securities held in Trust Account
|
3 | — | (3 | ) | 4(a) | — | — | — | ||||||||||||||||||||||||
Loss on extinguishment of debt
|
— | (181 | ) | — | (181 | ) | — | (181 | ) | |||||||||||||||||||||||
Interest expense
|
— | (292 | ) | — | (292 | ) | — | (292 | ) | |||||||||||||||||||||||
Other income
|
— | 16 | — | 16 | — | 16 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Loss before provision for income taxes
|
(266 | ) | (41,737 | ) | (1,049 | ) | (43,052 | ) | (202 | ) | (42,850 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Provision for income taxes
|
— | — | — | — | — | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net loss and comprehensive loss
|
(266 | ) | (41,737 | ) | (1,049 | ) | (43,052 | ) | (202 | ) | (42,850 | ) | ||||||||||||||||||||
Dividends on Series D convertible preferred stock
|
— | (3,888 | ) | — | (3,888 | ) | — | (3,888 | ) | |||||||||||||||||||||||
Accretion of Series D convertible preferred stock
|
— | (57,263 | ) | — | (57,263 | ) | — | (57,263 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net loss attributable to common stockholders, basic and diluted
|
$ | (266 | ) | $ | (102,888 | ) | $ | (1,049 | ) | $ | (104,203 | ) | $ | (202 | ) | $ | (104,001 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net loss per share, basic and diluted
|
— | $ | (88.75 | ) | $ | (1.02 | ) | $ | (1.35 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Weighted-average common shares outstanding:
|
||||||||||||||||||||||||||||||||
Basic and diluted
|
— | 1,159,297 | 102,167,514 | 77,167,514 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(1) |
For the period from February 25, 2021 (date of inception) to September 30, 2021.
|
Historical
|
Scenario 1
Assuming No
Redemptions into Cash
|
Scenario 2
Assuming Maximum
Redemptions into Cash |
||||||||||||||||||||||||||
Akili
|
Transaction
Accounting Adjustments |
Pro Forma
Statement of Operations |
Transaction
Accounting Adjustments |
Pro Forma
Statement of Operations |
||||||||||||||||||||||||
Revenue
|
$ | 3,939 | $ | — | $ | 3,939 | $ | — | $ | 3,939 | ||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||||||
Cost of revenue
|
416 | — | 416 | — | 416 | |||||||||||||||||||||||
Research and development
|
15,418 | 3,369 | 5(a) | 18,787 | (650 | ) | 5(b) | 18,137 | ||||||||||||||||||||
General and administrative
|
13,541 | 7,179 | 5(a) | 23,539 | (1,385 | ) | 5(b) | 21,936 | ||||||||||||||||||||
2,819 | 5(c) | (217 | ) | 5(d) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total operating expenses
|
29,375 | 13,367 | 42,742 | (2,253 | ) | 40,489 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Loss from operations
|
(25,436 | ) | (13,367 | ) | (38,803 | ) | 2,253 | (36,550 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Other income
|
124 | — | 124 | — | 124 | |||||||||||||||||||||||
Interest expense
|
(333 | ) | — | (333 | ) | — | (333 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Loss before provision for income taxes
|
(25,645 | ) | (13,367 | ) | (39,012 | ) | 2,253 | (36,759 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Provision for income taxes
|
1 | — | 1 | — | 1 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net loss
|
$ | (25,646 | ) | $ | (13,367 | ) | $ | (39,013 | ) | $ | 2,253 | $ | (36,760 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net loss per share, basic and diluted
|
$ | (22.20 | ) | $ | (0.38 | ) | $ | (0.48 | ) | |||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||
Weighted-average common shares outstanding: Basic and diluted
|
1,155,319 | 102,167,514 | 77,167,514 | |||||||||||||||||||||||||
|
|
|
|
|
|
1.
|
Basis of Pro Forma Presentation
|
2.
|
Accounting Policies
|
3.
|
Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet
|
a. |
To reflect the release of cash from the trust account to cash and cash equivalents, assuming no SCS public shareholders exercise their right to have their SCS Class A ordinary shares redeemed for their pro rata share of the trust account.
|
b. |
To reflect the conversion of SCS’s Class A ordinary shares and Class B ordinary shares in SCS’s Class A common stock and Class B common stock upon Domestication
|
c. |
To reflect the conversion of SCS’s 6,250,000 shares of Class B common stock into shares of Class A common stock concurrent with the Closing.
|
d. |
To reflect the payment of SCS’s total estimated advisory, legal, accounting and auditing fees and other professional fees of $8.9 million that are deemed to be direct and incremental costs of the Business Combination. The payment of $8.9 million of costs directly attributable to the Business Combination have been recorded as a reduction to additional
paid-in
capital of $8.9 million.
|
e. |
To reflect the settlement of $7.7 million of deferred underwriters’ fees incurred during SCS’s initial public offering that are payable upon completion of the Business Combination.
|
f. |
To reflect the reclassification of SCS Class A ordinary shares subject to redemption of $250 million to Akili, Inc. common stock of $3 thousand and additional paid in capital of $250 million, in Scenario 1, which assumes no SCS public shareholders exercise their redemption rights.
|
g. |
To reflect the payment of Akili’s total estimated advisory, legal, accounting and auditing fees and other professional fees of $11.3 million that are deemed to be direct and incremental costs of the Business Combination. The payment of $11.3 million of costs directly attributable to the Business Combination have been recorded as a reduction to additional
paid-in
capital of $11.3 million.
|
h. |
To reflect the conversion of Akili Convertible Preferred Stock of $287.7 million into Akili common stock of $5 thousand and additional paid in capital of $287.7 million.
|
i. |
To reflect the recapitalization of Akili through the contribution of all outstanding common stock of Akili to SCS and the issuance of 54,077,514 shares of Akili, Inc. common stock and the elimination of the accumulated deficit of SCS, the accounting acquiree. As a result of the recapitalization, Akili common stock of $5 thousand and SCS’s accumulated deficit of $6.3 million were derecognized. The shares of Akili, Inc. common stock issued in exchange for Akili’s capital were recorded as an increase to common stock of $5 thousand and a decrease to additional
paid-in
capital of $6.3 million.
|
j. |
To reflect the issuance of an aggregate of 16,200,000 shares of Akili, Inc. common stock in the PIPE Investment at a price of $10.00 per share, for an aggregate purchase price of $162.0 million.
|
k. |
To reflect, in Scenario 2, the assumption that SCS’s public shareholders exercise their redemption rights with respect to a maximum of 25,000,000 SCS Class A ordinary shares prior to the consummation of the Business Combination at a redemption price of approximately $10.00 per share, or $250.0 million in cash. The $250.0 million or 25,000,000 SCS Class A ordinary shares represent the maximum possible contractual redemption amount which assuming the completion of the PIPE Investment, would still provide SCS with an amount of cash at the closing of the Business Combination of no less than $150 million pursuant to the minimum cash condition in the Merger Agreement.
|
l. |
Represents payment of the estimated PIPE Financing transactions costs. The unaudited pro forma condensed combined balance sheet reflects these costs as a reduction of cash, with a corresponding decrease in additional
paid-in
capital.
|
m. |
To adjust the estimated transaction costs related to the redemption of the SCS Class A shares with respect to a maximum redemption of 25,000,000 SCS Class A ordinary shares in Scenario 2.
|
n. |
Represents payment of historical SCS accounts payable and accrued expenses upon Closing.
|
o. |
To reflect recognition of the approximately 8,391,880 Earnout Shares issuable to holders of Akili Common Stock which are not indexed to Akili, Inc.’s stock pursuant to ASC Subtopic
815-40
as of Closing. Therefore, such amount is classified as a liability and recognized at its preliminary estimated fair value. The earnout liability will be remeasured to its fair value at the end of each reporting period and subsequent changes in the fair value will be recognized in Akili, Inc.’s statement of operations within other income/expense. Refer to Note 6– Earnout Shares, for additional information.
|
p. |
To adjust the Earnout liability recorded in adjustment 3(o) above, to the lower preliminary estimated fair of $59.3 million, assuming max redemptions of Class A ordinary shares of SCS into cash. Refer to Note 6 – Earnout Shares, for additional information.
|
q. |
The Company has allocated $2.8 million of transaction costs, assuming no redemptions, to the liability classified Earnout Shares based on their relative fair value of these instruments as compared to the total Merger consideration. The portion of transaction costs allocated to these instruments is reflected as a reduction to cash and retained earnings. The costs are determined to relate to future share issuances and not to the initial recapitalization and therefore they are expensed at the Closing.
|
r. |
To adjust the estimated transaction costs allocated to the liability classified Earnout Shares, as discussed in adjustment 3(r), assuming a maximum redemption of 25,000,000 SCS Class A ordinary shares in Scenario 2.
|
4.
|
Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations for the Nine Months Ended September 30, 2021
|
a. |
To eliminate interest income earned on the Trust Account which will be released upon closing of the Business Combination.
|
b. |
To reclassify the historical formation costs of SCS to conform to Akili’s financial statement presentation.
|
c. |
To reflect the recognition of approximately $1.0 million of share-based compensation expense associated with the Earnout Shares issuable to Earnout Service Providers for the period ended September 30, 2021, of which $712 thousand and $334 thousand was recognized as selling, general, administrative expense and research and development expense, respectively, based on the holder’s employment classification. As the employee is required to be employed at the time the market condition for each Triggering Event is met, the requisite service period was determined to be the period between the close of the Business Combination and the estimated date at which the market condition for each Triggering Event is expected to be met. On a pro forma basis, as of September 30, 2021, there was no unrecognized compensation cost related to the Earnout Shares issuable to the option holders.
|
d. |
To reflect the lower share-based compensation expense of approximately $844 thousand, associated with the Earnout Shares issuable to Earnout Service Providers for the period ended September 30, 2021, assuming maximum redemptions of Class A ordinary shares of SCS into cash. Of the $844 thousand, approximately $575 thousand and $269 thousand was recognized as selling, general, administrative
|
expense and research and development expense, respectively, based on the holder’s employment classification. As the employee is required to be employed at the time the market condition for each Triggering Event is met, the requisite service period was determined to be the period between the close of the Business Combination and the estimated date at which the market condition for each Triggering Event is expected to be met. On a pro forma basis, as of September 30, 2021, there was no unrecognized compensation cost related to the Earnout Shares issuable to Earnout Service Providers, assuming maximum redemptions. |
5.
|
Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2020
|
a. |
To reflect the recognition of approximately $10.5 million of share-based compensation expense associated with the Earnout Shares issuable to Earnout Service Providers for the year ended December 31, 2020, of which $7.2 million and $3.3 million was recognized as selling, general, administrative expense and research and development expense, respectively, based on the holder’s employment classification. On a pro forma basis, as of December 31, 2020, there was approximately $1.0 million of total unrecognized compensation cost related to the Earnout Shares issuable to the option holders.
|
b. |
To reflect the lower share-based compensation expense of approximately $8.5 million, associated with the Earnout Shares issuable to Earnout Service Providers for the year ended December 31, 2020, assuming max redemptions of Class A ordinary shares of SCS into cash. Of the $8.5 million, approximately $5.8 million and $2.7 million was recognized as selling, general, administrative expense and research and development expense, respectively, based on the holder’s employment classification. On a pro forma basis, as of December 31, 2020, there was approximately $845 thousand of total unrecognized compensation cost related to the Earnout Shares issuable to the option holders, assuming max redemptions.
|
c. |
To reflect $2.8 million of transaction costs related to the liability classified Earnout Shares, assuming no redemptions, based on the relative fair value of these instruments as compared to the total Merger consideration. These costs are determined to relate to future share issuances and not to the initial recapitalization and therefore are expensed at the Closing Date.
|
d. |
To adjust the estimated transaction costs allocated to the liability classified Earnout Shares, as discussed in adjustment 5(c), assuming a maximum redemption of 25,000,000 SCS Class A ordinary shares in Scenario 2.
|
6.
|
Earnout Shares
|
• |
Triggering Event I is $15.00
|
• |
Triggering Event II is $20.00
|
• |
Triggering Event III is $30.00
|
7.
|
Net Loss Per Share
|
Year Ended December 31, 2020
|
Nine Months Ended September 30, 2021
|
|||||||||||||||
Scenario 1
(Assuming No Redemptions into Cash) |
Scenario 2
(Assuming Maximum Redemptions into Cash) |
Scenario 1
(Assuming No Redemptions into Cash) |
Scenario 2
(Assuming Maximum Redemptions into Cash) |
|||||||||||||
Pro forma net loss
|
$ | (39,013 | ) | $ | (36,760 | ) | $ | (104,203 | ) | $ | (104,001 | ) | ||||
Pro forma weighted average shares outstanding—basic and diluted
|
102,167,514 | 77,167,514 | 102,167,514 | 77,167,514 | ||||||||||||
Pro forma net loss per share-basic and diluted
|
$ | (0.38 | ) | $ | (0.48 | ) | $ | (1.02 | ) | $ | (1.35 | ) | ||||
Pro Forma weighted average shares calculation—basic and diluted
|
||||||||||||||||
SCS Sponsors and Independent Director
|
6,890,000 | 6,890,000 | 6,890,000 | 6,890,000 | ||||||||||||
SCS common stock subject to redemption
|
25,000,000 | — | 25,000,000 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SCS
|
31,890,000 | 6,890,000 | 31,890,000 | 6,890,000 | ||||||||||||
Issuance of SCS common stock in connection with closing of the PIPE Transaction
|
16,200,000 | 16,200,000 | 16,200,000 | 16,200,000 | ||||||||||||
Issuance of SCS common stock to Akili shareholders in connection with Business Combination
(a)(b)
|
54,077,514 | 54,077,514 | 54,077,514 | 54,077,514 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Pro forma weighted average shares outstanding—basic and diluted
(c)
|
102,167,514 | 77,167,514 | 102,167,514 | 77,167,514 | ||||||||||||
|
|
|
|
|
|
|
|
a. |
Excludes 5,922,486 Akili consideration shares that will be issued upon the occurrence of future events (i.e., exercise of stock options and warrants). Total consideration to be issued to Akili is $600.0 million or 60,000,000 shares ($10 per share price with no fractional shares issued). The total shares to be issued includes all issued and outstanding Akili common and preferred stock plus shares underlying stock options and warrants. Accordingly, the weighted average pro forma shares outstanding at Closing has been adjusted to exclude the portion of consideration shares that were unexercised at Closing.
|
b. |
Amount excludes the issuance of approximately 9,715,893 Earnout Shares, assuming no redemptions, and 7,840,893 Earnout Shares, assuming maximum redemptions, to certain eligible Akili equity holders as a result of Akili, Inc. satisfying certain conditions described above within the Earnout Period.
|
c. |
For the purposes of applying the if converted method for calculating diluted earnings per share, it was assumed that all Akili common stock options are exchanged for common stock. However, since this results in anti-dilution, the effect of such exchange was not included in the calculation of diluted loss per share. Shares underlying these instruments include 5,922,486 Akili consideration shares for unexercised stock options and warrants.
|
Name
|
Age
|
Position
|
||
Chamath Palihapitiya | 45 | Chief Executive Officer and Chairman of the Board of Directors | ||
Kishan (a/k/a Kishen) Mehta | 36 | President and Director | ||
Vladimir Coric | 51 | Director | ||
Senthil Sundaram | 43 | Director | ||
James Ryans | 46 | Chief Financial Officer |
• |
may significantly dilute the equity interest of investors, which dilution would increase if the anti-dilution provisions in the SCS Class B ordinary shares resulted in the issuance of SCS Class A ordinary shares on a greater than
one-to-one
|
• |
may subordinate the rights of holders of ordinary shares if preferred stock are issued with rights senior to those afforded our ordinary shares;
|
• |
could cause a change of control if a substantial number of our ordinary shares is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present directors and officers;
|
• |
may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and
|
• |
may adversely affect prevailing market prices for our ordinary shares.
|
• |
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
|
• |
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
|
• |
our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
|
• |
our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
|
• |
our inability to pay dividends on our ordinary shares;
|
• |
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
|
• |
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
|
• |
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
|
• |
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
|
• |
Targeted treatments that are personalized to patients’ needs
de-identified,
aggregate level view of each patient’s activity, informing our product development. The therapeutics’ mechanics, algorithms and designs are protected by patents, trade secrets and copyrights, combining protections typically seen in both the medicine and technology industries to create a robust intellectual property portfolio.
|
• |
Clinically validated therapeutics like drugs and medical devices
The American Journal of Psychiatry, The Lancet Digital Health and Nature: Digital Medicine
|
• |
Therapeutics that are experienced as entertainment
|
• |
Patient focused and adaptive
|
• |
pivotal study in adolescents with ADHD
|
• |
pivotal study in adults with ADHD
|
• |
Weill Cornell Medicine/NewYork-Presbyterian Hospital in acute cognitive dysfunction in
COVID-19
survivors
|
• |
Vanderbilt University Medical Center in acute cognitive dysfunction in
COVID-19
survivors
|
• |
pivotal study in pediatric ADHD in Japan by Shionogi & Co., Ltd (“Shionogi”)
|
• |
proof of concept study in early childhood
(3-8
year olds) ADHD by TALi Digital Limited (“TALi”)
|
• |
post-operative cognitive dysfunction by Vanderbilt University Medical Center
|
• |
chemotherapy-related cognitive impairment by the University of California San Francisco (“UCSF”)
|
• |
cognitive monitoring in a healthy aging population
|
• |
proof of concept and/or pivotal study in inattention in ASD
|
• |
pivotal study in cognitive dysfunction in MS
|
• |
pivotal study in cognitive dysfunction in MDD
|
Core Mechanic
|
Description
|
Targeted Physiology
|
||
SSME
|
Targets attentional control |
|
||
SNAV
|
Targets spatial navigation and episodic memory |
|
||
BBT
|
Targets attentional control, goal management and working memory |
|
• |
Navigation: Steering over gates and/or avoiding obstacles
|
• |
Targeting: Tap for targets and ignore
non-targets
|
• |
Multitasking: Simultaneous navigation and targeting
|
Disease Area
|
Total U.S. Population
with Disease Diagnosis
|
Initial Target Population Subset with
applicable cognitive impairment, as noted |
||
Attention-deficit/hyperactivity disorder (“ADHD”), all ages | 10.8M |
8.1M
(ADHD + inattention) |
||
Autism spectrum disorder (“ASD”) | 1.3M |
410k
(ASD + inattention) |
Disease Area
|
Total U.S. Population
with Disease Diagnosis
|
Initial Target Population Subset with
applicable cognitive impairment, as noted |
||
Multiple sclerosis (“MS”) | 900K |
180K
(MS + cognitive dysfunction) |
||
Major depressive disorder (“MDD”) | 19M |
2.1M
(MDD + cognitive dysfunction) |
||
Acute cognitive dysfunction | 81M |
3.3M
(COVID fog,
ICU-related,
TBI, cancer-related)
|
* |
Figures in table above are based on our management’s good faith estimates based on various publications, public health data and national health statistics including from the NIH and CDC.
|
* |
Estimated timeframes in figure above correspond to applicable milestone start times, and are subject to change. Please refer to the section entitled “
Risk Factors
Risks Related to Our Business and Industry—Enrollment and retention of patients in clinical trials is an expensive and time-
|
consuming process and could be made more difficult or rendered impossible by multiple factors outside of our control. If we experience delays or difficulties in the enrollment or retention of patients in clinical trials, our ability to obtain necessary marketing authorizations for our product candidates could be delayed or prevented
Risks Related to Our Products—Our current product candidates are in various stages of development. Our product candidates may fail in development or suffer delays that adversely affect their commercial viability. If we fail to maintain clearance, de novo classification or approval to market our product candidates, including EndeavorRx for expanded indications, or if we are delayed in obtaining such marketing authorizations, our business, prospects, results of operations and financial condition could be materially and adversely affected
|
The pivotal STARS-ADHD study was a multi-center, randomized, blinded, controlled trial in 348 children diagnosed with ADHD. EndeavorRx showed a statistically significant improvement compared to an educational-style video game control (p=0.006) on the predefined primary endpoint, a change in the Attention Performance Index (“API”) of TOVA. TOVA is a computerized test cleared by the FDA to assess attention deficits and evaluate the effects of interventions in ADHD; the API is a composite measure of attention functioning.
The mean (“SD”) change from baseline on the TOVA API was 0.93 in the EndeavorRx group and 0.03 in the control group. Forty-seven percent of children met the prespecified clinical responder analysis for TOVA API improvement, which was greater than control (47% vs 32%, p=0.0058). In addition to the improvement in the TOVA API, treatment with EndeavorRx resulted in significantly greater improvements across other objective TOVA attention-related measures (sustained attention,
|
|
The study demonstrated statistically significant improvement in the IRS from baseline after one month as well as to the end of the three-month trial in both the children
on-stimulants
and
off-stimulants
(both cohorts: p<0.001). The second period of EndeavorRx treatment resulted in further increases in efficacy on this primary outcome measure, beyond the effects already seen after the first period of treatment. The magnitude of improvement in IRS throughout the study was similar for children independent of their ADHD medication use. Responder rates for IRS (improvement of greater than 1 point or more on the IRS scale) were 41% and 55% at the end of the first period of treatment with EndeavorRx in the
off-stimulant
and
on-stimulant
groups respectively. This increased to 69% and 68% respectively by the end of the second period of treatment. The treatment was well-tolerated. There were no serious adverse events and the most common treatment-related adverse event reported was frustration.
|
|
• |
U.S. commercial launch of EndeavorRx in
8-12
year-old
patients with primarily inattentive or combined-type ADHD, who have a demonstrated attention issue: Expected H2 2022
|
• |
Initiation of TALi technology study in
3-8
year-old
children with ADHD: Expected H1 2022
|
• |
Initiation of Shionogi pivotal study in Japan: Expected H2 2022
|
• |
Pivotal trial data in adolescent ADHD patients: Expected H2 2023
|
• |
Pivotal trial data in adult ADHD patients: Expected H2 2023
|
The study was conducted at the Children’s Hospital of Philadelphia Center for Autism Research, which enrolled 19 children with autism, with an average age of 10 years old. Patients received either our investigational treatment or a placebo video game that used similar colors and graphic elements, but was based on a word challenge game rather than the active, multitasking components of the Akili investigational device. Patients were asked to play the game for 30 minutes a day, five days a week, for four weeks. |
|
|
This pilot study found that not only did the child participants like and engage with our investigational treatment, their attention on the TOVA test of attention improved similar to what was seen in our studies of children with only an ADHD diagnosis. The placebo game did not demonstrate improvement in the mean TOVA score. |
Our proof of concept study in MDD was a multi-center, randomized, controlled trial of our digital investigational therapeutic
AKL-T03
in 74 adult patients diagnosed with
mild-to-moderate
mild-to-moderate
|
||
were randomized 1:1 to our
AKL-T03
digital therapeutic or a control game. Both groups used the treatment/control at home, five days per week for 25 minutes per day, on a tablet device for six weeks. Following the treatment period, an
in-clinic
assessment was conducted to assess key outcomes. The primary outcome of the study assessed sustained attention as measured by TOVA, an
FDA-cleared
objective measure of attention.
In the study,
AKL-T03
showed a statistically significant improvement in sustained attention compared to control (p=0.002) on the predefined primary endpoint, as measured by the TOVA engagement with
AKL-T03
also
|
|
Clinical evidence in acute cognitive function
Evaluating the ability of our SSME technology to improve impairments related to acute cognitive dysfunction, we conducted a pilot study of 84 patients with TBI, including
60–85-year-old
The data from the study showed significant improvement in measures of attention (reaction time) and working memory, compared to controls.
|
|
|
|
|
We also conducted a pilot study in 54 healthy older adults in collaboration with Pfizer. The study showed the potential for SSME assessment to detect cognitive differences between amyloid positive and amyloid negative status in otherwise healthy individuals (graph on right). |
1) |
increasing awareness and activation of caregivers, and
|
2) |
directly educating and activating physicians, using a therapeutic sales model with telemedicine integration. Since obtaining FDA authorization for EndeavorRx, we have built an infrastructure that includes patient connectivity via telehealth, digital first fulfillment and additional scalable commercial capabilities. Our strategy is based on a digital first,
e-commerce
experience and our approach focuses on three main stakeholders: consumers, prescribing physicians and payers.
|
• |
Consumer-driven model:
|
• |
Active participation by a physician:
|
• |
Delivered as a comprehensive care program:
|
• |
Coverage by formulary decision-makers:
self-pay/reimbursement
model to enable growth in the short term with potential to track toward expanded access via insurance coverage over time.
|
• |
Power of data to inform and adapt:
|
• |
families with children not well-managed on ADHD drugs due to side effects or lack of efficacy,
|
• |
families choosing to not put their children on ADHD drugs, and
|
• |
families with children actively taking ADHD drugs but looking for additional options to add to their treatment.
|
1) |
We are building meaningful relationships with caregivers and patients, offering products they enjoy that help improve their health.
|
2) |
We are developing products that can span a person’s lifetime, from childhood through adulthood—supporting their cognitive health through chronic conditions, acute illness and aging.
|
3) |
Our products can be continually iterated for long-term engagement.
|
4) |
We have rich data infrastructure that can enable patients to engage with doctors in a new way.
|
5) |
We also have the ability to offer premium content and services, like our recently launched EndeavorRx Insight, a companion app for parents to participate in and support their child’s treatment journey. This has the potential to provide additional revenue streams alongside the treatment.
|
* |
Estimated timeframes in figure above correspond to applicable milestone start times, and are subject to change—please refer to the section entitled “
Risk Factors
Risks Related to Our Business and Industry—Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside of our control. If we experience delays or difficulties in the enrollment or retention of patients in clinical trials, our ability to obtain necessary marketing authorizations for our product candidates could be delayed or prevented
Risks Related to Our Products—Our current product candidates are in various stages of development. Our product candidates may fail in development or suffer delays that adversely affect their commercial viability. If we fail to maintain clearance, de novo classification or approval to market our product candidates, including EndeavorRx for expanded indications, or if we are delayed in obtaining such marketing authorizations, our business, prospects, results of operations and financial condition could be materially and adversely affected
|
** |
Population data in table above are estimates based on our management’s good faith estimates based on various publications, public health data, national health statistics including from the NIH and CDC and partner research data.
|
• |
An exclusive license from UCSF to a patent family directed to software and methods for enhancing cognition via a task performed in the presence of interferences (distractions and/or interrupters). Two U.S. patents, four Japanese patents and one Canadian patent have been allowed in this family, the patents expiring as early as 2031.
|
• |
An exclusive license from UCSF to a patent family directed to software and methods for enhancing cognition via a task with both a physical and cognitive component. One Japanese patent has been allowed in this family, expiring as early as 2035.
|
• |
A patent family directed to a personalized cognitive training regimen through difficulty progression. One U.S. patent, one Japanese patent and one South Korean patent have been allowed in this family and will expire as early as 2035.
|
• |
A patent family directed to processor-implemented systems and methods for measuring cognitive abilities. One U.S. patent has been allowed in this family and will expire as early as 2036.
|
• |
A patent family directed to signal detection metrics in adaptive response-deadline procedures. One Chinese patent has been allowed in this family and will expire as early as 2037.
|
• |
A patent family directed to audio-only interference training for cognitive disorder screening and treatment. One U.S. patent has been allowed in this family and will expire as early as 2039.
|
• |
A patent family directed to facial expression detection for screening and treatment of affective disorders. One U.S. patent has been allowed in this family and will expire as early as 2039.
|
• |
A patent family directed to a platform configured to render computerized emotional/affective elements for use as stimuli in computerized tasks. One South Korean patent has been allowed in this family and will expire as early as 2037.
|
• |
the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
|
• |
federal civil and criminal false claims laws, including the False Claims Act (“FCA”), which can be enforced through civil “qui tam” or “whistleblower” actions and civil monetary penalty laws, impose criminal and civil penalties against individuals or entities for, among other things, knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid or other federal health care programs that are false or fraudulent; knowingly making or causing a false statement material to a false or fraudulent claim or an obligation to pay money to the federal government; or knowingly concealing or knowingly and improperly avoiding or decreasing such an obligation. Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payers if they are deemed to “cause” the submission of false or fraudulent claims. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA. The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in the proceeds of any monetary recovery;
|
• |
the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payer (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating these statutes without actual knowledge of the statutes or specific intent to violate them in order to have committed a violation;
|
• |
the federal Physician Payment Sunshine Act, created under the ACA and its implementing regulations, which require manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the US Department of Health and
|
• |
Human Services (“HHS”) information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. Effective January 1, 2022, these reporting obligations will extend to include payments and transfers of value made to physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives during the previous year;
|
• |
federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs;
|
• |
federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and
|
• |
analogous state and foreign laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws which may apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payer, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to file reports with states regarding pricing and marketing information, such as the tracking and reporting
|
of gifts, compensations and other remuneration and items of value provided to healthcare professionals and entities; and state and local laws requiring the registration of pharmaceutical sales representatives.
|
• |
increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs from 15.1% to 23.1% of the average manufacturer price;
|
• |
required collection of rebates for drugs paid by Medicaid managed care organizations;
|
• |
required manufacturers to participate in a coverage gap discount program, under which they must agree to offer 70 percent
point-of-sale
|
• |
imposed a
non-deductible
annual fee on pharmaceutical manufacturers or importers who sell “branded prescription drugs” to specified federal government programs.
|
• |
On January 2, 2013, the U.S. American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers.
|
• |
On April 13, 2017, CMS published a final rule that gives states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces.
|
• |
On May 30, 2018, the Right to Try Act, was signed into law. The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase 1 clinical trial and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a pharmaceutical manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.
|
• |
On May 23, 2019, CMS published a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning January 1, 2020.
|
• |
On December 20, 2019, former President Trump signed into law the Further Consolidated Appropriations Act (H.R. 1865), which repealed the Cadillac tax, the health insurance provider tax and the medical device excise tax. It is impossible to determine whether similar taxes could be instated in the future.
|
• |
establishment registration and device listing;
|
• |
compliance with FDA’s QSR requirements;
|
• |
labeling regulations;
|
• |
medical device reporting regulations, which, for example, require that manufacturers report to the FDA if a device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur;
|
• |
voluntary and mandatory device recalls to address problems when a device is defective and/or could be a risk to health; and
|
• |
corrections and removal reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health.
|
• |
warning letters or untitled letters that require corrective action;
|
• |
fines, injunctions and civil penalties;
|
• |
recall or seizure of products;
|
• |
operating restrictions, partial suspension or total shutdown of production;
|
• |
withdrawing PMA approvals already granted; and;
|
• |
criminal prosecution.
|
• |
expenses incurred in connection with the development of our pipeline of products;
|
• |
personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation for employees engaged in R&D functions;
|
• |
cost of clinical trials
|
• |
cost of regulatory submissions, reviews, external consultants;
|
• |
expenses incurred in connection with the discovery and development of our products, including under agreements with third parties, such as consultants;
|
• |
expenses incurred under agreements with consultants who supplement our internal capabilities, including software development; and
|
• |
facilities, depreciation and other expenses, which include direct and allocated expenses, such as rent and maintenance of facilities, insurance and other operating costs.
|
• |
attention in ASD: pilot study completed and planning on an FDA
Q-submission
meeting in the second half of 2022 to discuss our next planned development phase;
|
• |
cognitive dysfunction in MS: POC completed and planning on an FDA
Q-submission
meeting in the first half of 2023 to discuss our next planned development phase; and
|
• |
cognitive dysfunction in MDD: POC completed and planning on an FDA
Q-submission
meeting in the second half of 2023 to discuss our next planned development phase.
|
(dollars in thousands, except percentages) |
Nine Months Ended
September 30, |
$
Change
|
%
Change
|
|||||||||||||
2021
|
2020
|
|||||||||||||||
Revenues
|
$ | 377 | $ | 3,839 | $ | (3,462 | ) | -90 | % | |||||||
Cost of revenues
|
243 | 451 | (208 | ) | -46 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net margin
|
134 | 3,388 | (3,254 | ) | -96 | % | ||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
12,739 | 11,548 | 1,191 | 10 | % | |||||||||||
Selling, general and administrative
|
28,675 | 9,725 | 18,950 | 195 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses
|
41,414 | 21,273 | 20,141 | 95 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss
|
(41,280
|
)
|
(17,885
|
)
|
(23,395
|
)
|
131
|
%
|
||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income (expense):
|
||||||||||||||||
Other income
|
16 | 122 | (106 | ) | -87 | % | ||||||||||
Interest expense
|
(292 | ) | (257 | ) | (35 | ) | 14 | % | ||||||||
Loss on extinguishment of debt
|
(181 | ) | — | (181 | ) | * | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other income (expense)
|
(457 | ) | (135 | ) | (322 | ) | 239 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes
|
(41,737
|
)
|
(18,020
|
)
|
(23,717
|
)
|
132
|
%
|
||||||||
Expense from income taxes
|
— | 2 | (2 | ) |
-100
|
% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$
|
(41,737
|
)
|
$
|
(18,022
|
)
|
$
|
(23,715
|
)
|
131.6
|
%
|
|||||
|
|
|
|
|
|
|
|
• |
an increase of $12.2 million in marketing and advertising costs;
|
• |
an increase of $2.9 million in consulting, legal, accounting and other professional service costs;
|
• |
an increase of $3.2 million in personnel-related costs, primarily due to
the build-out of
our HR, marketing and sales departments; and
|
• |
an increase of $0.5 million related to various other expenses such as software subscriptions and rent expense.
|
(dollars in thousands, except percentages) |
Year Ended
December 31, |
$
Change
|
%
Change
|
|||||||||||||
2020
|
2019
|
|||||||||||||||
Revenues
|
$ | 3,939 | $ | 19,986 | $ | (16,047 | ) | -80 | % | |||||||
Cost of revenues
|
416 | 1,342 | (926 | ) | -69 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net margin
|
3,523 | 18,644 | (15,121 | ) | -81 | % | ||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
15,418 | 21,265 | (5,847 | ) | -27 | % | ||||||||||
Selling, general and administrative
|
13,541 | 18,877 | (5,336 | ) | -28 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses
|
28,959 | 40,142 | (11,183 | ) | -28 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss
|
|
(25,436
|
)
|
|
(21,498
|
)
|
|
(3,938
|
)
|
|
18
|
%
|
||||
|
|
|
|
|
|
|
|
|||||||||
Other income (expense):
|
||||||||||||||||
Other income
|
124 | 1,034 | (910 | ) | -88 | % | ||||||||||
Interest expense
|
(333 | ) | (157 | ) | (176 | ) | 112 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other income (expense)
|
(209 | ) | 877 | (1,086 | ) | -124 | % | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes
|
(25,645
|
)
|
(20,621
|
)
|
(5,024
|
)
|
24
|
%
|
||||||||
Income tax expense
|
1 | 13 | (12 | ) | -92 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$
|
(25,646
|
)
|
$
|
(20,634
|
)
|
$
|
(5,012
|
)
|
24
|
%
|
|||||
|
|
|
|
|
|
|
|
• |
a decrease of $4.1 million in R&D expenses supporting an adjunct clinical trial for EndeavorRx which largely took place in 2019 and ended in the first half of 2020;
|
• |
a decrease of $0.6 million in personnel-related costs, primarily due to a reduction in headcount; and
|
• |
a decrease of $1.1 million in various other expenses, including a decrease in travel costs due to
COVID-19,
software subscriptions and facilities related expenses.
|
• |
Selling, general and administrative—
|
• |
a decrease of $3.1 million in marketing costs as the Company paused marketing spend during the first half of 2020 while waiting for regulatory feedback and assessing the business impact of
COVID-19;
|
• |
a decrease of $1.9 million in consulting, legal, accounting and other professional service costs;
|
• |
a decrease of $0.5 million in various other expenses, such as a decrease in travel costs due to
COVID-19;
and
|
• |
an increase of $0.2 million in personnel-related costs, primarily due to an increase in bonus expense. Bonus expenses were limited in 2019 while the Company assessed the business impact of
COVID-19
and awaited regulatory feedback.
|
• |
our revenue growth;
|
• |
the ability of our patients to obtain third-party payer reimbursement for our current product;
|
• |
the amount and timing of sales and other revenues from our product candidates, if approved, including the sales price and the availability of coverage and adequate third-party payer reimbursement;
|
• |
our sales and marketing activities;
|
• |
our R&D efforts;
|
• |
the emergence and effect of competing or complementary products;
|
• |
the outcome, timing and cost of meeting regulatory requirements established by the FDA, or comparable foreign regulatory authorities;
|
• |
the progress, timing, scope and costs of our preclinical studies, clinical trials, potential future clinical trials and other related activities;
|
• |
the costs of commercialization activities for any of our product candidates that receive marketing authorization, including the costs and timing of establishing product sales, marketing and hosting capabilities, or entering into strategic collaborations with third parties to leverage or access these capabilities;
|
• |
the cash requirements of any future discovery of product candidates;
|
• |
our ability to retain our current employees and the need to hire additional management and sales, technical and medical personnel;
|
• |
the extent to which we acquire or invest in business, products or technology; and
|
• |
the impact of
the COVID-19 pandemic.
|
Nine Months
Ended September |
Year Ended
December 31, |
|||||||||||||||
2021
|
2020
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||
Net cash used in operating activities
|
$ | (35,933 | ) | $ | (18,102 | ) | $ | (24,551 | ) | $ | (29,381 | ) | ||||
Net cash used in investing activities
|
(480 | ) | (103 | ) | (116 | ) | (461 | ) | ||||||||
Net cash provided by financing activities
|
112,727 | 1,998 | 1,998 | 4,938 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in cash
|
$ | 76,314 | $ | (16,207 | ) | $ | (22,669 | ) | $ | (24,904 | ) | |||||
|
|
|
|
|
|
|
|
• |
the prices at which we sold our preferred stock to outside investors in arms-length transactions;
|
• |
our results of operations, financial position, and capital resources;
|
• |
contemporaneous third-party valuations common stock;
|
• |
rights, preferences, and privileges of convertible preferred stock relative to common stock;
|
• |
the lack of marketability of common stock;
|
• |
stage and development of Akili’s business;
|
• |
the history and nature of our business, industry trends and competitive environment,
|
• |
general economic conditions; and
|
• |
the likelihood of achieving a liquidity event, such as an initial public offering or sale of Akili, given prevailing market conditions.
|
Name
|
Age
|
Title
|
||||
Executive Officers:
|
||||||
Eddie Martucci, Ph.D.
|
39 | Chief Executive Officer and Director | ||||
Santosh Shanbhag
|
45 | Chief Financial Officer | ||||
Anil Jina, MB, BCh, BAO
|
50 | Chief Medical Officer | ||||
Jacqueline Studer, J.D.
|
62 | Chief Legal Officer | ||||
Non-Executive
Directors:
|
||||||
Robert Perez
|
57 | Executive Chairman and Director | ||||
Bharatt Chowrira, J.D., Ph.D.
|
56 | Director | ||||
Kenneth Ehlert
|
52 | Director | ||||
James Gates, J.D.
|
65 | Director | ||||
Adam Gazzaley, M.D., Ph.D.
|
53 | Director | ||||
Christine Lemke
|
45 | Director | ||||
John Spinale
|
52 | Director |
• |
W. Edward Martucci, II, Ph.D., Chief Executive Officer;
|
• |
Jacqueline Studer, J.D., Chief Legal Officer; and
|
• |
Santosh Shanbhag, Chief Financial Officer.
|
Year
|
Salary
|
Option
Awards |
Non-Equity
Incentive Plan Compensation |
All Other
Compensation |
Total
|
|||||||||||||||||||
Name and Principal Position
|
($)
|
($)
(1)
|
($)
(2)
|
($)
(3)
|
($)
|
|||||||||||||||||||
W. Edward Martucci, II
|
2021 | 400,000 | 2,221,997 | 171,000 | 9,800 | 2,802,797 | ||||||||||||||||||
Chief Executive Officer
|
— | |||||||||||||||||||||||
Jacqueline Studer
|
2021 | 367,800 | 394,380 | 104,823 | 9,800 | 876,803 | ||||||||||||||||||
Chief Legal Officer
|
||||||||||||||||||||||||
Santosh Shanbhag
|
2021 | 343,419 | 379,024 | 97,874 | 9,800 | 830,118 | ||||||||||||||||||
Chief Financial Officer
|
(1) |
The amounts reported represent the aggregate grant date fair value of stock option awards granted to Akili’s named executive officers during the fiscal year ended December 31, 2021, computed in accordance with FASB ASC Topic 718. Such grant date fair values do not take into account any estimated forfeitures related to service-based vesting. A discussion of the assumptions used in determining grant date fair value may be found in Note to Akili’s financial statements for the year ended December 31, 2021, included elsewhere in this proxy statement/prospectus. These amounts also include the incremental fair value of certain modified stock options associated with a stock option repricing in 2021(determined as of such repricing date in accordance with FASB ASC 718). These amounts do not correspond to the actual value that may be recognized by the named executive officers upon exercise of the applicable award or sale of the underlying shares of stock.
|
(2) |
The amounts in the
“Non-Equity
Incentive Plan Compensation” column reflects the actual payout of the 2021 cash bonus, as describe in more details below.
|
(3) |
The amounts reported represent matching contributions contributed by the Company to each named executive’s account in the Company’s 401(k) plan.
|
Name
|
Base Salary
|
|||
W. Edward Martucci, II
|
$ | 400,000 | ||
Jacqueline Studer
|
$ | 380,000 | ||
Santosh Shanbhag
|
$ | 350,000 |
Name
|
Target Bonus
Percentage |
Actual Payout
|
||||||
W. Edward Martucci, II
|
45 | % | 171,000 | |||||
Jacqueline Studer
|
30 | % | 104,823 | |||||
Santosh Shanbhag
|
30 | % | 97,874 |
Option Awards
(1)
|
||||||||||||||||||||
Name
|
Number of
Securities Underlying Unexercised Options (#) Exercisable |
Number of
Securities Underlying Unexercised Options (#) Unexercisable |
Vesting
Commencement Date (“VCD”) |
Option
Exercise Price ($) |
Option
Expiration Date |
|||||||||||||||
W. Edward Martucci, II
|
75,271 |
(2)
|
— | 4/3/2015 | 2.38 | 8/26/2025 | ||||||||||||||
276,540 |
(3)
|
— | 5/6/2016 | 2.46 | 5/20/2026 | |||||||||||||||
470,112 |
(4)
|
156,705 |
(4)
|
4/2/2019 | 4.40 | 10/2/2028 | ||||||||||||||
9,375 |
(5)
|
5,625 |
(5)
|
3/15/2020 | 4.40 | 5/21/2030 | ||||||||||||||
2,500 |
(6)
|
2,500 |
(6)
|
11/18/2020 | 4.40 | 5/21/2030 | ||||||||||||||
90,416 |
(7)
|
529,584 |
(7)
|
6/25/2021 | 4.40 | 9/29/2031 | ||||||||||||||
Jacqueline Studer
|
125,000 |
(8)
|
75,000 |
(8)
|
3/26/2020 | 4.40 | 6/12/2029 | |||||||||||||
9,375 |
(5)
|
5,625 |
(5)
|
3/15/2020 | 4.40 | 5/21/2030 | ||||||||||||||
2,500 |
(6)
|
2,500 |
(6)
|
11/18/2020 | 4.40 | 5/21/2030 | ||||||||||||||
15,312 |
(7)
|
89,688 |
(7)
|
6/25/2021 | 4.40 | 9/29/2031 | ||||||||||||||
Santosh Shanbhag
|
189,687 |
(9)
|
113,813 |
(9)
|
3/12/2020 | 4.40 | 6/12/2029 | |||||||||||||
9,375 |
(5)
|
5,625 |
(5)
|
3/15/2020 | 4.40 | 5/21/2030 | ||||||||||||||
2,500 |
(6)
|
2,500 |
(6)
|
11/18/2020 | 4.40 | 5/21/2030 | ||||||||||||||
13,854 |
(7)
|
81,146 |
(7)
|
6/25/2021 | 4.40 | 9/29/2031 |
(1) |
Each equity award was granted under the Company’s Amended and Restated 2011 Stock Incentive Plan (the “2011 Plan”).
|
(2) |
Represents an option to purchase shares of Akili’s common stock granted on April 3, 2015. The shares underlying this option vested as follows: 50% of the shares vested on the vesting commencement date (the “VCD”) and 16.67% vested on each 12 month anniversary of the VCD, subject to continued service through the applicable vesting date.
|
(3) |
Represents an option to purchase shares of common stock granted on May 6, 2016. The shares underlying this option vest as follows: 28.6% of the shares vested on the VCD and 8.925% vests at the end of each 6 month period, subject to continued service through the applicable vesting date.
|
(4) |
Represents an option to purchase shares of common stock granted on April 2, 2019. The shares underlying this option vest as follows: 12.5% of the shares vested on the VCD and 12.5% vested at the end of each 6 month period, subject to continued service through the applicable vesting date.
|
(5) |
Represents an option to purchase shares of common stock granted on March 15, 2020. The shares underlying this option vest as follows: 25% of the shares vested on the VCD and 12.5% vests at the end of each 6 month period, subject to continued service through the applicable vesting date.
|
(6) |
Represents an option to purchase shares of common stock granted on November 18, 2020. The shares underlying this option vest as follows: 16.67% of the shares vested on the VCD and 16.67% vests at the end of each 6 month period, subject to continued service through the applicable vesting date.
|
(7) |
Represents an option to purchase shares of common stock granted on June 25, 2021. The shares underlying this option vest and become exercisable in 48 equal monthly installments over four years, subject to continued service through the applicable vesting date.
|
(8) |
Represents an option to purchase shares of common stock granted on March 26, 2020. The shares underlying this option vest as follows: 25% of the shares vested on the VCD and 12.5% vests at the end of each 6 month period, subject to continued service through the applicable vesting date.
|
(9) |
Represents an option to purchase shares of common stock granted on March 12, 2020. The shares underlying this option vest as follows: 25% of the shares vested on the VCD and 12.5% vested at the end of each 6 month period, subject to continued service through the applicable vesting date.
|
Name
|
Fees Earned
or Paid in Cash ($) |
Option
Awards ($)
(1)
|
All Other
Compensation ($) |
Total ($)
|
||||||||||||
Robert Perez
(2)
|
100,000 | 589,841 | — | 689,841 | ||||||||||||
Adam Gazzaley
(3)
|
— | 89,411 | 100,000 | 189,411 | ||||||||||||
Christine Lemke
(4)
|
13,125 | 237,623 | — | 250,748 | ||||||||||||
James Gates
(5)
|
— | — | — | — | ||||||||||||
John Spinale
(6)
|
— | — | — | — | ||||||||||||
Bharatt Chowrira
(7)
|
— | — | — | — | ||||||||||||
Ken Ehlert
(8)
|
3,646 | — | — | 3,646 |
(1) |
The amounts reported represent the aggregate grant date fair value of the stock option awards granted to Akili’s directors during 2021, calculated in accordance with FASB ASC Topic 718. Such grant date fair values do not take into account any estimated forfeitures related to service-based vesting. A discussion of the assumptions used in determining grant date fair value may be found in Note to Akili’s financial statements for the year ended December 31, 2021, included elsewhere in this proxy statement/prospectus. These amounts also include the incremental fair value of certain modified stock options associated with a stock option repricing in 2021(determined as of such repricing date in accordance with FASB ASC 718). The amounts reported in this column reflect the accounting cost for these stock option awards and do not correspond to the actual economic value that may be received by such directors upon the exercise of the stock option awards or any sale of the underlying shares.
|
(2) |
Mr. Perez has entered into an agreement with Akili, pursuant to which he is entitled to receive a fee of $8,333.33 per month for certain services provided to the Company. For more information, see “Certain Relationships and Related Person Transactions.” As of December 31, 2021, Mr. Perez held options to purchase an aggregate of 974,925 shares of our common stock.
|
(3) |
Dr. Gazzaly has entered into an advisor agreement with Akili, pursuant to which he is entitled to receive a consulting fee of $8,333.33 per month for certain services provided to the Company. For more information, see “Certain Relationships and Related Person Transactions.” As of December 31, 2021, Mr. Gazzaley held options to purchase an aggregate of 75,000 shares of our common stock.
|
(4) |
As of December 31, 2021, Ms. Lemke held options to purchase an aggregate of 70,000 shares of our common stock.
|
(5) |
As of December 31, 2021, Mr. Gates did not hold any outstanding equity awards.
|
(6) |
As of December 31, 2021, Mr. Spinale held options to purchase an aggregate of 29,000 shares of our common stock.
|
(7) |
As of December 31, 2021, Mr. Chowrira did not hold any outstanding equity awards.
|
(8) |
As of December 31, 2021, Mr. Ehlert did not hold any outstanding equity awards.
|
• |
each person who is known to be the beneficial owner of more than 5% of SCS ordinary shares and is expected to be the beneficial owner of more than 5% of shares of Akili, Inc. common stock post-Business Combination;
|
• |
each of SCS’s current executive officers and directors;
|
• |
each person who will become an executive officer or director of Akili, Inc. post-Business Combination; and
|
• |
all executive officers and directors of SCS as a group
pre-Business
Combination, and all executive officers and directors of Akili, Inc. as a group post-Business Combination.
|
(i) |
a “no redemptions” scenario where (i) no public shareholders exercise their redemption rights in connection with the Business Combination or our extension proposal and (ii) Akili, Inc. issues 63,793,177 shares of Akili, Inc. common stock, including the Earnout Shares;
|
(ii) |
a “redemptions” scenario where (i) all 25,000,000 of SCS’s outstanding public shares are redeemed in connection with the Business Combination and (ii) Akili, Inc. issues 61,918,177 shares of Akili, Inc. common stock, including the Earnout Shares.
|
Pre-Business
Combination and PIPE
Investment |
Post-Business Combination and PIPE
Investment |
|||||||||||||||||||||||||||||||
Number of
SCS Ordinary Shares
(2)
|
% of SCS
Class A Ordinary Shares** |
% of SCS
Class B Ordinary Shares |
% of
SCS Ordinary Shares |
Assuming
No Redemptions |
Assuming
Redemptions |
|||||||||||||||||||||||||||
Name and Address of
Beneficial Owner
(1)
|
Number of
Shares of Akili Common Stock |
%
|
Number of
Shares of Akili Common Stock |
%
|
||||||||||||||||||||||||||||
5%
Holders
|
||||||||||||||||||||||||||||||||
SCS Sponsor I LLC
(3)
|
6,860,000 | 21.5 | 99.5 | 21.5 | 6,860,000 | 6.1 | 6,860,000 | 8.1 | ||||||||||||||||||||||||
Citadel Advisors LLC and affiliates
(4)
|
2,126,853 | 8.3 | — | 6.7 | 2,126,853 | 1.9 | — |
(5)
|
— | |||||||||||||||||||||||
Adage Capital Partners, L.P. and affiliates
(6)
|
1,750,000 | 6.8 | — | 5.5 | 1,750,000 | 1.6 | — |
(5)
|
— | |||||||||||||||||||||||
Directors and Executive Officers
Pre-Business
Combination
|
||||||||||||||||||||||||||||||||
Chamath Palihapitiya
(3)(7)
|
6,860,000 | 21.5 | 99.5 | 21.5 | 16,860,000 | 15.1 | 16,860,000 | 19.8 | ||||||||||||||||||||||||
Kishan (a/k/a Kishen) Mehta
(3)
|
6,860,000 | 21.5 | 99.5 | 21.5 | 6,860,000 | 6.1 | 6,860,000 | 8.1 | ||||||||||||||||||||||||
James Ryans
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Vladimir Coric
|
30,000 | — | * | * | 30,000 | * | 30,000 | * | ||||||||||||||||||||||||
Senthil Sundaram
(8)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
All SCS directors and executive officers as a group (five individuals)
(7)
|
6,890,000 | 21.6 | 100 | 21.6 | 16,890,000 | 15.1 | 16,890,000 | 19.9 | ||||||||||||||||||||||||
Directors, Nominees and Executive Officers Post-Business Combination
|
||||||||||||||||||||||||||||||||
Chamath Palihapitiya
(3)
(7)
|
6,860,000 | 21.5 | 99.5 | 21.5 | 16,860,000 | 15.1 | 16,860,000 | 19.8 | ||||||||||||||||||||||||
Eddie Martucci
(9)
|
— | — | — | — | ||||||||||||||||||||||||||||
All Akili Inc. directors and executive officers as a group (9 individuals)
|
* |
Indicates beneficial ownership of less than 1%.
|
** |
Includes all SCS Class B ordinary shares convertible by such holder into SCS Class A ordinary shares.
|
(1) |
Unless otherwise noted, the business address of each of those listed in the table above
pre-Business
Combination is 2850 W. Horizon Ridge Parkway, Suite 200, Henderson, NV 89052 and post-Business Combination is 125 Broad Street, 5th Floor, Boston, MA 02110.
|
(2) |
Prior to the Closing, holders of record of SCS Class A ordinary shares and SCS Class B ordinary shares are entitled to one vote for each share held on all matters to be voted on by SCS shareholders and vote together as a single class, except as required by law; provided, that holders of SCS Class B ordinary shares have the right to elect all of SCS’s directors prior to the Closing, and holders of SCS’s Class A ordinary shares are not entitled to vote on the election of directors during such time. SCS Class B ordinary shares may be converted into SCS Class A ordinary shares at any time, at the option of the holder, on a one-for-one basis. As a result of and upon the effective time of the Domestication, (a) each of the then issued and outstanding SCS Class A ordinary shares will convert automatically, on a
one-for-one
|
Akili, Inc. common stock and (b) each of the then issued and outstanding SCS Class B ordinary shares will convert automatically, on a
one-for-one
|
(3) |
Messrs. Palihapitiya and Mehta may be deemed to beneficially own (within the meaning of Rule
13d-3
under the Exchange Act) securities held by SCS Sponsor I LLC by virtue of their shared control over SCS Sponsor I LLC.
|
(4) |
Represents 2,126,853 SCS Class A ordinary shares beneficially held by Citadel Advisors LLC (“Citadel Advisors”), Citadel Advisors Holdings LP (“CAH”), Citadel GP LLC (“CGP”), Citadel Securities LLC (“Citadel Securities”), Citadel Securities Group LP (“CALC4”), Citadel Securities GP LLC (“CSGP”) and Kenneth Griffin (“Mr. Griffin”), based solely on the Schedule 13G filed jointly by Citadel Advisors, CAH, CGP, Citadel Securities, CALC4, CSGP and Mr. Griffin with the SEC on January 26, 2022. The business address of each of Citadel Advisors, CAH, CGP, Citadel Securities, CALC4, CSGP and Mr. Griffin is 131 S. Dearborn Street, 32nd Floor, Chicago, Illinois 60603.
|
(5) |
In the redemption scenario, the number of outstanding public shares is reduced to zero, and, consequently, no public shares can be beneficially owned in such a scenario, notwithstanding the amount of SCS Class A ordinary shares beneficially owned prior to the consummation of the Business Combination.
|
(6) |
Represents 2,126,853 SCS Class A ordinary shares beneficially held by Adage Capital Partners, L.P. (“ACP”), Adage Capital Partners GP, L.L.C. (“ACPGP”), Adage Capital Advisors, L.L.C. (“ACA”), Robert Atchinson (“Mr. Atchinson”) and Phillip Gross (“Mr. Gross”), based solely on the Schedule 13G filed jointly by ACP, ACPGP, ACA, Mr. Atchinson and Mr. Gross with the SEC on July 2, 2021. The business address of each of ACP, ACPGP, ACA, Mr. Atchinson and Mr. Gross is 200 Clarendon Street, 52nd Floor, Boston, Massachusetts 02116.
|
(7) |
Post-Business Combination interest shown includes 10,000,000 Akili, Inc. Class A ordinary shares to be purchased by SC Master Holdings, LLC in the PIPE Investment. Mr. Palihapitiya may be deemed to beneficially own shares to be purchased by SC Master Holdings, LLC by virtue of his control over such entity.
|
(8) |
In September 2021, pursuant to a Director Restricted Stock Unit Award Agreement, dated September 24, 2021, between SCS and Mr. Sundaram, SCS granted 30,000 restricted stock units (“RSUs”) to Mr. Sundaram, which grant is contingent on both the consummation of SCS’s initial business combination and a shareholder approved equity plan. The RSUs will vest upon the consummation of the Business Combination and represent 30,000 SCS Class A ordinary shares that will settle on a date SCS selects determined in the sole discretion of SCS that shall occur between the vesting date and March 15 of the year following the year in which such Business Combination vesting occurs.
|
(9) |
Includes shares of Akili, Inc. common stock issuable upon the exercise of options exercisable as of or within 60 days of January 31, 2022.
|
Name
|
Akili Series D
Preferred Shares |
Total Purchase
Price |
||||||
TLS Beta Pte. Ltd.
(1)
|
2,966,706 | $ | 24,999,998.32 | |||||
Neuberger Berman Principal Strategies Prima Fund LP
(2)
|
1,201,813 | $ | 10,127,502.69 | |||||
Neuberger Berman Prima LP Fund LP
(2)
|
1,186,682 | $ | 9,999,995.95 | |||||
Neuberger Berman PRIMA
Co-Invest
Fund VI LP
(2)
|
578,211 | $ | 4,872,499.68 | |||||
JAZZ Human Performance Technology Fund, L.P.
(3)
|
534,007 | $ | 4,499,999.02 | |||||
JAZZ Human Performance Opportunity Fund, L.P.
(3)
|
356,005 | $ | 3,000,002.16 |
(1) |
TLS Beta Pte. Ltd. (Temasek) was a holder of more than 5% of Akili’s outstanding capital stock.
|
(2) |
Neuberger Berman Principal Strategies Prima Fund LP and its affiliated entities, Neuberger Berman Prima LP Fund LP and Neuberger Berman PRIMA
Co-Invest
Fund VI LP (collectively, Neuberger), was a holder of more than 5% of Akili’s outstanding capital stock.
|
(3) |
John Spinale is a member of the board of directors of Akili and an affiliate of JAZZ Human Performance Technology Fund, L.P. and JAZZ Human Performance Opportunity Fund, L.P.
|
Name
|
Akili Series D
Preferred Shares |
Total Purchase
Price |
||||||
TLS Beta Pte. Ltd.
(1)
|
3,526,383 | $ | 29,999,998.10 | |||||
JAZZ Human Performance Technology Fund, L.P.
(2)
|
587,731 | $ | 5,000,003.94 |
(1) |
Temasek was a holder of more than 5% of Akili’s outstanding capital stock.
|
(2) |
John Spinale is a member of the board of directors of Akili and an affiliate of JAZZ. JAZZ was a holder of more than 5% of Akili’s outstanding capital stock.
|
• |
The audit committee will review the material facts of all related person transactions.
|
• |
In reviewing any related person transaction, the audit committee will take into account, among other factors that it deems appropriate, whether the related person transaction is on terms no less favorable to Akili, Inc. than terms generally available in a transaction with an unaffiliated third-party under the same or similar circumstances and the extent of the related person’s interest in the transaction.
|
• |
In connection with its review of any related person transaction, Akili, Inc. will provide the audit committee with all material information regarding such related person transaction, the interest of the related person and any potential disclosure obligations of Akili, Inc. in connection with such related person transaction.
|
• |
If a related person transaction will be ongoing, the audit committee may establish guidelines for the management of Akili, Inc. to follow in its ongoing dealings with the related person.
|
Delaware
|
Cayman Islands
|
|||
Stockholder/Shareholder Approval of Business Combinations
|
Mergers generally require approval of a majority of all outstanding shares. Mergers in which less than 20% of the acquirer’s stock is issued generally do not require acquirer stockholder approval. Mergers in which one corporation owns 90% or more of a second corporation may be completed without the vote of the second corporation’s board of directors or stockholders. |
Mergers require a special resolution, and any other authorization as may be specified in the relevant articles of association. Parties holding certain security interests in the constituent companies must also consent.
All mergers (other than parent/subsidiary mergers) require shareholder approval—there is no exception for smaller mergers. Where a bidder has acquired 90% or more of the shares in a Cayman Islands company, it can compel the acquisition of the shares of the remaining shareholders and thereby become the sole shareholder. A Cayman Islands company may also be acquired through a “scheme of arrangement” sanctioned by a Cayman Islands court and approved by 50%+1 in number and 75% in value of shareholders in attendance and voting at a shareholders’ meeting.
|
||
Stockholder/Shareholder Votes for Routine Matters
|
Generally, approval of routine corporate matters that are put to a | Under the Cayman Islands Companies Act and SCS’s |
Delaware
|
Cayman Islands
|
|||
stockholder vote require the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter. | amended and restated memorandum and articles of association law, routine corporate matters may be approved by an ordinary resolution (being a resolution passed by a simple majority of the shareholders as being entitled to do so). | |||
Appraisal Rights
|
Generally, a stockholder of a publicly traded corporation does not have appraisal rights in connection with a merger. | Minority shareholders that dissent from a merger are entitled to be paid the fair market value of their shares, which if necessary may ultimately be determined by the court. | ||
Inspection of Books and Records
|
Any stockholder may inspect the corporation’s books and records for a proper purpose during the usual hours for business. | Shareholders generally do not have any rights to inspect or obtain copies of the register of members or other corporate records of a company. | ||
Stockholder/Shareholder Lawsuits
|
A stockholder may bring a derivative suit subject to procedural requirements (including adopting Delaware as the exclusive forum as per Organizational Documents Proposal C). | In the Cayman Islands, the decision to institute proceedings on behalf of a company is generally taken by the company’s board of directors. A shareholder may be entitled to bring a derivative action on behalf of the company, but only in certain limited circumstances. | ||
Fiduciary Duties of Directors
|
Directors must exercise a duty of care and duty of loyalty and good faith to the company and its stockholders. |
A director owes fiduciary duties to a company, including to exercise loyalty, honesty and good faith to the company as a whole.
In addition to fiduciary duties, directors of SCS owe a duty of care, diligence and skill.
Such duties are owed to the company but may be owed direct to creditors or shareholders in certain limited circumstances.
|
||
Indemnification of Directors and Officers
|
A corporation is generally permitted to indemnify its directors and officers acting in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation. | A Cayman Islands company generally may indemnify its directors or officers except with regard to fraud or willful default. |
Delaware
|
Cayman Islands
|
|||
Limited Liability of Directors
|
Permits limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches of duty of loyalty, intentional misconduct, unlawful repurchases or dividends, or improper personal benefit. | Liability of directors may be unlimited, except with regard to their own fraud or willful default. | ||
Business Combination or Antitakeover Statutes
|
Section 203 is a default provision of the DGCL that prohibits a publicly held Delaware corporation from engaging in a business combination, such as a merger, with “interested stockholders” (a person or group owning 15% or more of the corporation’s voting stock) for three years following the date that person becomes an interested stockholder, unless: (i) before such stockholder becomes an “interested stockholder,” the board of directors approves the Business Combination or the transaction that results in the stockholder becoming an interested stockholder; (ii) upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the outstanding voting stock of the corporation at the time of the transaction (excluding stock owned by certain persons); or (iii) at the time or after the stockholder became an interested stockholder, the board of directors and at least
two-thirds
of the disinterested outstanding voting stock of the corporation approves the transaction.
Akili Interactive has not opted out of the protections of Section 203 of the DGCL. As a result, the statute applies to Akili, Inc.
|
There are none. |
• |
1% of the total number of shares of Akili, Inc. common stock then outstanding; or
|
• |
the average weekly reported trading volume of Akili, Inc. common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
|
• |
the issuer of the securities that was formerly a shell company has ceased to be a shell company;
|
• |
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
|
• |
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form
8-K;
and
|
• |
at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
|
• |
not earlier than the 90th day; and
|
• |
not later than the 120th day, before the
one-year
anniversary of the preceding year’s annual meeting.
|
Page
|
||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 |
Page
|
||||
F-16 | ||||
F-17 | ||||
F-18 | ||||
F-19 | ||||
F-20 |
(1) |
Includes an aggregate of up to 825,000 Class B ordinary shares that are subject to forfeiture depending on the extent to which the underwriter’s over-allotment option is exercised (see Notes 5 and 8). On June 29, 2021, the Company effected a share capitalization with respect to its Class B ordinary shares of 575,000 shares thereof, effectively increasing the Sponsor shares to 6,325,000 Class B ordinary shares, up to 825,000 of which are subject to forfeiture depending on the extent to which the underwriter’s over-allotment option is exercised.
|
2021
(Audited)
|
||||
Formation and operational costs
|
$ | 5,138 | ||
|
|
|||
Net loss
|
$
|
(5,138
|
)
|
|
|
|
|||
Weighted average shares outstanding, basic and diluted
(1)
|
5,500,000 | |||
|
|
|||
Basic and diluted net loss per ordinary share
|
$
|
(0.00
|
)
|
|
|
|
(1) |
Excludes an aggregate of up to 825,000 Class B ordinary shares that are subject to forfeiture depending on the extent to which the underwriter’s over-allotment option is exercised (see Notes 5 and 8). On June 29, 2021, the Company effected a share capitalization with respect to its Class B ordinary shares of 575,000 shares thereof, effectively increasing the Sponsor shares to 6,325,000 Class B ordinary shares, up to 825,000 of which are subject to forfeiture depending on the extent to which the underwriter’s over-allotment option is exercised.
|
Class B
Ordinary Shares
(1)
|
Additional
Paid-in
Capital
|
Accumulated
Deficit |
Total
Shareholder’s Equity |
|||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||
Balance – February 25, 2021 (inception)
|
— | $ | — | $ | — | $ | — | $ | — | |||||||||||
Class B ordinary shares issued to Sponsor
(1)
|
6,325,000 | 633 | 24,367 | — | 25,000 | |||||||||||||||
Net loss
|
— | — | — | (5,138 | ) | (5,138 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance – March 2, 2021 (Audited)
|
|
6,325,000
|
|
|
633
|
|
|
24,367
|
|
|
(5,138
|
)
|
|
19,862
|
|
|||||
|
|
|
|
|
|
|
|
|
|
(1) |
Includes an aggregate of up to 825,000 Class B ordinary shares that are subject to forfeiture depending on the extent to which the underwriter’s over-allotment option is exercised (see Notes 5 and 8). On June 29, 2021, the Company effected a share capitalization with respect to its Class B ordinary shares of 575,000 shares thereof, effectively increasing the Sponsor shares to 6,325,000 Class B ordinary shares, up to 825,000 of which are subject to forfeiture depending on the extent to which the underwriter’s over-allotment option is exercised.
|
(Audited)
|
||||
Cash flows from operating activities:
|
||||
Net loss
|
$ | (5,138 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||
Formation costs paid by Sponsor in exchange for issuance of Class B ordinary shares
|
5,000 | |||
Changes in operating assets and liabilities:
|
||||
|
|
|||
Net cash used in operating activities
|
|
(138
|
)
|
|
|
|
|||
Cash flows from financing activities:
|
||||
Proceeds from promissory note – related party
|
138 | |||
|
|
|||
Net cash provided by financing activities
|
|
138
|
|
|
|
|
|||
Net Change in Cash
|
— | |||
Cash – Beginning of period (inception)
|
— | |||
|
|
|||
Cash – End of Period
|
$ | — | ||
|
|
|||
Non-cash
investing and financing activities:
|
||||
Deferred offering costs included in accrued offering costs
|
$
|
5,000
|
|
|
|
|
|||
Deferred offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares
|
$
|
20,000
|
|
|
|
|
ASSETS
|
||||
Current assets
|
||||
Cash
|
$ | 519,568 | ||
Prepaid expenses
|
897,311 | |||
|
|
|||
Total Current Assets
|
1,416,879 | |||
Marketable Securities held in Trust Account
|
250,003,042 | |||
|
|
|||
TOTAL ASSETS
|
$
|
251,419,921
|
|
|
|
|
|||
LIABILITIES, TEMPORARY EQUITY AND PERMANENT DEFICIT
|
||||
Current liabilities
|
||||
Accrued expenses
|
$ | 10,314 | ||
Advances from related party
|
38,427 | |||
|
|
|||
Total Current Liabilities
|
48,741 | |||
Deferred underwriting fee payable
|
7,700,000 | |||
|
|
|||
Total Liabilities
|
|
7,748,741
|
|
|
|
|
|||
Commitments and Contingencies (Note 7)
|
||||
Temporary Equity
|
||||
Class A ordinary shares subject to possible redemption, 25,000,000 shares at redemption value
|
250,003,042 | |||
Permanent Deficit
|
||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding
|
— | |||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 640,000 shares issued and outstanding (excluding 25,000,000 shares subject to possible redemption)
|
64 | |||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 6,250,000 shares issued and outstanding
|
625 | |||
Additional
paid-in
capital
|
— | |||
Accumulated deficit
|
(6,332,551 | ) | ||
|
|
|||
Total Permanent Deficit
|
|
(6,331,862
|
)
|
|
|
|
|||
TOTAL LIABILITIES, TEMPORARY EQUITY AND PERMANENT DEFICIT
|
$
|
251,419,921
|
|
|
|
|
Three
Months Ended September 30, |
For the
Period from
February 25,
2021 (Inception) Through September 30, |
|||||||
2021
|
2021
|
|||||||
Operating and formation costs
|
$ | 263,347 | $ | 268,672 | ||||
|
|
|
|
|||||
Loss from operations
|
|
(263,347
|
)
|
|
(268,672
|
)
|
||
Other income:
|
||||||||
Interest earned on marketable securities held in Trust Account
|
3,042 | 3,042 | ||||||
|
|
|
|
|||||
Net loss
|
$
|
(260,305
|
)
|
$
|
(265,630
|
)
|
||
|
|
|
|
|||||
Basic and diluted weighted average shares outstanding, Class A ordinary shares
|
25,358,242 | 10,884,906 | ||||||
|
|
|
|
|||||
Basic and diluted net loss per share, Class A ordinary shares
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
||
|
|
|
|
|||||
Basic and diluted weighted average shares outstanding, Class B ordinary shares
|
6,241,758 | 5,818,396 | ||||||
|
|
|
|
|||||
Basic and diluted net loss per share, Class B ordinary shares
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
||
|
|
|
|
Temporary Equity
|
Class A
Ordinary Shares |
Class B
Ordinary Shares |
Additional
Paid-in
|
Accumulated
|
Total
Permanent |
|||||||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity (Deficit)
|
||||||||||||||||||||||||||||||||||||
Balance — February 25, 2021
(inception)
|
|
—
|
|
$
|
—
|
|
|
|
—
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
||||||||||||||||
Issuance of Class B ordinary shares to Sponsor
|
|
—
|
|
|
—
|
|
|
— | — | 6,325,000 | 633 | 24,367 | — | 25,000 | ||||||||||||||||||||||||||||||
Net loss
|
— | — |
|
|
—
|
|
|
—
|
|
— | — |
|
—
|
|
(5,182 | ) | (5,182 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Balance — March 31, 2021
|
|
—
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
|
6,325,000
|
|
|
633
|
|
$
|
24,367
|
|
$
|
(5,182
|
)
|
$
|
19,818
|
|
|||||||||||||||||
Net loss
|
— | — | — | — | — | — | — | (143 | ) | (143 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Balance — June 30, 2021
|
|
—
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
|
6,325,000
|
|
|
633
|
|
$
|
24,367
|
|
$
|
(5,325
|
)
|
$
|
19,675
|
|
|||||||||||||||||
Sale of 25,000,000 Public Shares,
net of underwriting discounts and offering expenses |
25,000,000 | 237,511,810 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||||||||||||
Accretion of Class A ordinary shares to redemption value
|
— | 12,491,232 | — | — | — | — | (6,424,311 | ) | (6,066,921 | ) | (12,491,232 | ) | ||||||||||||||||||||||||||||||||
Sale of 640,000 Private Placement Shares
|
|
—
|
|
|
—
|
|
640,000 | 64 |
|
—
|
|
|
—
|
|
6,399,936 |
|
—
|
|
6,400,000 | |||||||||||||||||||||||||
Forfeiture of Founder Shares
|
— | — | — | — | (75,000 | ) | (8 | ) | 8 | — | — | |||||||||||||||||||||||||||||||||
Net loss
|
— | — | — | — | — | — | — | (260,305 | ) | (260,305 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Balance — September 30, 2021
|
|
25,000,000
|
|
$
|
250,003,042
|
|
|
640,000
|
|
$
|
64
|
|
|
6,250,000
|
|
$
|
625
|
|
$
|
—
|
|
$
|
(6,332,551
|
)
|
$
|
(6,331,862
|
)
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
||||
Net loss
|
$ | (265,630 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||
Formation costs paid by Sponsor in exchange for issuance of Founder Shares
|
5,000 | |||
Interest earned on marketable securities held in Trust Account
|
(3,042 | ) | ||
Changes in operating assets and liabilities:
|
||||
Prepaid expenses
|
(897,311 | ) | ||
Accrued expenses
|
10,314 | |||
|
|
|||
Net cash used in operating activities
|
$
|
(1,150,669
|
)
|
|
|
|
|||
Cash Flows from Investing Activities:
|
||||
Investment of cash in Trust Account
|
$ | (250,000,000 | ) | |
|
|
|||
Net cash used in investing activities
|
$
|
(250,000,000
|
)
|
|
|
|
|||
Cash Flows from Financing Activities:
|
||||
Proceeds from sale of Public Shares, net of underwriting discounts paid
|
$ | 245,600,000 | ||
Proceeds from sale of Private Placement Shares
|
6,400,000 | |||
Advances from related party
|
64,119 | |||
Repayment of advances from related party
|
(25,692 | ) | ||
Proceeds from promissory note – related party
|
300,000 | |||
Repayment of promissory note – related party
|
(300,000 | ) | ||
Payment of offering costs
|
(368,190 | ) | ||
|
|
|||
Net cash provided by financing activities
|
$
|
251,670,237
|
|
|
|
|
|||
Net Change in Cash
|
$
|
519,568
|
|
|
Cash – Beginning of period
(inception)
|
— | |||
|
|
|||
Cash – End of period
|
$
|
519,568
|
|
|
|
|
|||
Non-Cash
investing and financing activities:
|
||||
Offering costs paid by Sponsor in exchange for issuance of Founder Shares
|
$ | 20,000 | ||
|
|
|||
Deferred underwriting fee payable
|
$ | 7,700,000 | ||
|
|
Balance Sheet as of July 2, 2021
|
As Previously
Reported |
Adjustment
|
As
Restated
|
|||||||||
Class A ordinary shares subject to possible redemption
|
$ | 238,931,480 | $ | 11,068,520 | $ | 250,000,000 | ||||||
Class A ordinary shares
|
$ | 175 | $ | (111 | ) | $ | 64 | |||||
Additional
paid-in
capital
|
$ | 5,004,522 | $ | (5,004,522 | ) | $ | — | |||||
Accumulated deficit
|
$ | (5,325 | ) | $ | (6,063,887 | ) | $ | (6,069,212 | ) | |||
Total Permanent Equity (Deficit)
|
$ | 5,000,005 | $ | (11,068,520 | ) | $ | (6,068,515 | ) | ||||
Number of Class A ordinary shares subject to possible redemption
|
23,893,148 | 1,106,852 | 25,000,000 |
Three Months Ended
September 30, 2021 |
For the Period from
February 25, 2021 (Inception)
Through
September 30, 2021
|
|||||||||||||||
Class A
|
Class B
|
Class A
|
Class B
|
|||||||||||||
Basic and diluted net loss per ordinary share
|
||||||||||||||||
Numerator:
|
||||||||||||||||
Allocation of net loss
|
$ | (208,889 | ) | $ | (51,416 | ) | $ | (173,101 | ) | $ | (92,529 | ) | ||||
Denominator:
|
||||||||||||||||
Basic and diluted weighted average shares outstanding
|
25,358,242 | 6,241,758 | 10,884,906 | 5,818,396 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Basic and diluted net loss per ordinary share
|
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) |
Level 1:
|
|
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
Level 2:
|
|
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
Level 3:
|
|
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
|
Description
|
Level
|
September 30,
2021 |
||||||
Assets:
|
||||||||
Marketable securities held in Trust Account
|
1 | $ | 250,003,042 |
PAGE
|
||||
F-39
|
||||
F-40
|
||||
F-41
|
||||
F-42
|
||||
F-43
|
||||
F-44
|
PAGE
|
||||
F-64
|
||||
F-65
|
||||
F-66
|
||||
F-67
|
||||
F-68
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 18,528 | $ | 41,197 | ||||
Restricted cash
|
305 | 305 | ||||||
Accounts receivable
|
8 | — | ||||||
Prepaid clinical expenses
|
— | 262 | ||||||
Prepaid expenses and other current assets
|
314 | 489 | ||||||
|
|
|
|
|||||
Total current assets
|
|
19,155
|
|
|
42,253
|
|
||
|
|
|
|
|||||
Property and equipment, net
|
1,004 | 1,263 | ||||||
Deposits
|
22 | 22 | ||||||
|
|
|
|
|||||
Total assets
|
$
|
20,181
|
|
$
|
43,538
|
|
||
|
|
|
|
|||||
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit
|
||||||||
Current liabilities:
|
||||||||
Note payable
|
$ | 114 | $ | — | ||||
Accounts payable
|
876 | 969 | ||||||
Accrued expenses
|
2,445 | 1,823 | ||||||
Deferred revenue
|
369 | 3,819 | ||||||
Deferred rent, short term
|
121 | 101 | ||||||
|
|
|
|
|||||
Total current liabilities
|
3,925 | 6,712 | ||||||
Note payable, long-term
|
1,814 | — | ||||||
Corporate bond, net of discount
|
1,462 | 1,305 | ||||||
Other long-term liabilities
|
996 | 883 | ||||||
|
|
|
|
|||||
Total liabilities
|
|
8,197
|
|
|
8,900
|
|
||
|
|
|
|
|||||
Commitments and contingencies (Note 11)
|
||||||||
Redeemable convertible preferred stock, $0.0001 par value – authorized 23,785,202 shares:
|
||||||||
Series
A-1:
designated, 4,000,000 shares; issued and outstanding shares, 4,000,000 at December 31, 2020 and 2019 (liquidation value of $4,000 at December 31, 2020 and 2019)
|
— | — | ||||||
Series
A-2:
designated 4,427,072 shares; issued and outstanding shares, 4,427,072 at December 31, 2020 and 2019 (liquidation value of $8,832 at December 31, 2020 and 2019)
|
7,128 | 7,128 | ||||||
Series B: designated 7,341,485 shares; issued and outstanding shares, 7,341,485 at December 31, 2020 and 2019 (liquidation value of $42,360 at December 31, 2020 and 2019)
|
41,854 | 41,854 | ||||||
Series C: designated 8,016,645 shares; issued and outstanding shares, 8,016,645 at December 31, 2020 and 2019 (liquidation value of $68,200 at December 31, 2020 and 2019)
|
67,904 | 67,904 | ||||||
Stockholders’ deficit:
|
||||||||
Common shares, $0.0001 par value: authorized 32,000,000 shares; issued and outstanding 1,157,868 and 1,153,368 shares at December 31, 2020 and 2019, respectively
|
— | — | ||||||
Additional
paid-in
capital
|
9,905 | 6,913 | ||||||
Accumulated deficit
|
(114,807 | ) | (89,161 | ) | ||||
|
|
|
|
|||||
Total stockholders’ deficit
|
(104,902 | ) | (82,248 | ) | ||||
|
|
|
|
|||||
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit
|
$
|
20,181
|
|
$
|
43,538
|
|
||
|
|
|
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Revenue
|
$ | 3,939 | $ | 19,986 | ||||
Cost of revenue
|
416 | 1,342 | ||||||
|
|
|
|
|||||
Gross profit
|
3,523 | 18,644 | ||||||
|
|
|
|
|||||
Operating expenses:
|
||||||||
Research and development
|
15,418 | 21,265 | ||||||
General and administrative
|
13,541 | 18,877 | ||||||
|
|
|
|
|||||
Total operating expenses
|
28,959 | 40,142 | ||||||
|
|
|
|
|||||
Operating loss
|
(25,436 | ) | (21,498 | ) | ||||
|
|
|
|
|||||
Other (expense) income:
|
||||||||
Other income
|
124 | 1,034 | ||||||
Interest expense
|
(333 | ) | (157 | ) | ||||
|
|
|
|
|||||
Total other (expense) income, net
|
(209 | ) | 877 | |||||
|
|
|
|
|||||
Loss before income taxes
|
(25,645 | ) | (20,621 | ) | ||||
Income tax expense
|
1 | 13 | ||||||
|
|
|
|
|||||
Net loss and comprehensive loss attributable to common stockholders
|
$ | (25,646 | ) | $ | (20,634 | ) | ||
|
|
|
|
|||||
Net loss per share:
|
||||||||
Basic and diluted
|
$ | (22.20 | ) | $ | (17.90 | ) | ||
|
|
|
|
|||||
Weighted average common shares outstanding:
|
||||||||
Basic and diluted
|
1,155,319 | 1,152,449 | ||||||
|
|
|
|
Series
A-1
Redeemable Convertible Preferred Stock |
Series
A-2
Redeemable Convertible Preferred Stock |
Series B
Redeemable Convertible Preferred Stock |
Series C
Redeemable Convertible Preferred Stock |
Common Stock |
Additional
Paid-in
Capital |
Accumulated
Deficit |
Total
Stockholders’ Deficit |
|||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Value | Shares | Value | Shares | Value | Shares | Value | Shares | Par Value | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018
|
|
4,000,000
|
|
$
|
—
|
|
|
4,427,072
|
|
$
|
7,128
|
|
|
7,341,485
|
|
$
|
41,854
|
|
|
8,016,645
|
|
$
|
67,904
|
|
|
|
1,151,406
|
|
$
|
—
|
|
$
|
4,530
|
|
$
|
(68,527
|
)
|
$
|
(63,997
|
)
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Stock-based compensation expense
|
— | — | — | — | — | — | — | — |
|
— | — | 2,378 | — | 2,378 | ||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options
|
— | — | — | — | — | — | — | — |
|
1,962 | — | 5 | — | 5 | ||||||||||||||||||||||||||||||||||||||||||
Net loss
|
— | — | — | — | — | — | — | — |
|
— | — | — | (20,634 | ) | (20,634 | ) | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Balance at December 31, 2019
|
|
4,000,000
|
|
$
|
—
|
|
|
4,427,072
|
|
$
|
7,128
|
|
|
7,341,485
|
|
$
|
41,854
|
|
|
8,016,645
|
|
$
|
67,904
|
|
|
|
1,153,368
|
|
$
|
—
|
|
$
|
6,913
|
|
$
|
(89,161
|
)
|
$
|
(82,248
|
)
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Stock-based compensation expense
|
— | — | — | — | — | — | — | — |
|
— | — | 2,898 | — | 2,898 | ||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options
|
— | — | — | — | — | — | — | — |
|
4,500 | — | 19 | — | 19 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock warrants
|
|
— | — | 75 | — | 75 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
— | — | — | — | — | — | — | — |
|
— | — | — | (25,646 | ) | (25,646 | ) | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Balance at December 31, 2020
|
|
4,000,000
|
|
$
|
—
|
|
|
4,427,072
|
|
$
|
7,128
|
|
|
7,341,485
|
|
$
|
41,854
|
|
|
8,016,645
|
|
$
|
67,904
|
|
|
|
1,157,868
|
|
$
|
—
|
|
$
|
9,905
|
|
$
|
(114,807
|
)
|
$
|
(104,902
|
)
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
2019
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$ | (25,646 | ) | $ | (20,634 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation of property and equipment
|
300 | 251 | ||||||
Stock-based compensation expense
|
2,898 | 2,378 | ||||||
Loss on disposal of fixed assets
|
6 | 3 | ||||||
Non cash interest expense
|
294 | 157 | ||||||
Premium of end of term payment
|
12 | — | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(8 | ) | — | |||||
Prepaid expenses and other current assets
|
311 | 876 | ||||||
Deposits
|
— | 7 | ||||||
Accounts payable
|
(38 | ) | (1,538 | ) | ||||
Accrued expenses
|
637 | (1,164 | ) | |||||
Deferred rent and other liabilities
|
133 | 269 | ||||||
Deferred revenue
|
(3,450 | ) | (9,986 | ) | ||||
|
|
|
|
|||||
Net cash used in operating activities
|
(24,551 | ) | (29,381 | ) | ||||
|
|
|
|
|||||
Cash flows from investing activities:
|
||||||||
Acquisition of property and equipment
|
(116 | ) | (461 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities
|
(116 | ) | (461 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from note payable
|
2,000 | — | ||||||
Proceeds from issuance of corporate bond
|
— | 5,000 | ||||||
Payment of debt issuance costs
|
(21 | ) | (67 | ) | ||||
Proceeds from exercise of stock options
|
19 | 5 | ||||||
|
|
|
|
|||||
Net cash provided by financing activities
|
1,998 | 4,938 | ||||||
|
|
|
|
|||||
Net decrease in cash, cash equivalents, and restricted cash
|
(22,669 | ) | (24,904 | ) | ||||
Cash, cash equivalents, and restricted cash at beginning of year
|
41,502 | 66,406 | ||||||
|
|
|
|
|||||
Cash, cash equivalents, and restricted cash at end of year
|
$ | 18,833 | $ | 41,502 | ||||
|
|
|
|
|||||
Supplementary Information:
|
||||||||
Cash paid for income taxes
|
$ | 15 | $ | 8 | ||||
Cash paid for interest
|
$ | 20 | $ | — | ||||
Noncash investing and financing activities:
|
||||||||
Purchase of property and equipment included in accounts payable and accrued expenses
|
$ | 18 | $ | 88 | ||||
Common stock warrants issued related to note payable
|
75 | — | ||||||
Leasehold improvement allowance provided by landlord
|
— | 650 | ||||||
Debt discount on corporate bond
|
— | 3,805 |
1.
|
Nature of the Business and Basis of Presentation
|
2.
|
Summary of Significant Accounting Policies
|
Level 1:
|
Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. | |
Level 2:
|
Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. | |
Level 3:
|
Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. |
Furniture and fixtures
|
5-7
years
|
|
Computer equipment
|
3 years
|
|
Office equipment
|
3 years
|
|
Software
Leasehold improvements
|
3 years
3-7
years (Or remaining term of the lease, if shorter)
|
3.
|
Option and Collaboration Agreement
|
Payment associated with option period
|
$ | 10,000 | ||
Payment to exercise agreement
|
10,000 | |||
Discount on issuance on corporate bond (see Note 6)
|
3,805 | |||
Contract modification
|
387 | |||
|
|
|||
Total transaction price
|
24,192 | |||
Less: Revenue recognized
|
(23,840 | ) | ||
|
|
|||
Deferred revenue at December 31, 2020
|
$ | 352 | ||
|
|
4.
|
Property and Equipment
|
2020
|
2019
|
|||||||
Furniture and fixtures
|
$ | 184 | $ | 184 | ||||
Computer equipment
|
306 | 289 | ||||||
Office equipment
|
60 | 60 | ||||||
Leasehold improvements
|
1,020 | 1,020 | ||||||
Software
|
84 | 93 | ||||||
|
|
|
|
|||||
1,654 | 1,646 | |||||||
Less: accumulated depreciation
|
(650 | ) | (383 | ) | ||||
|
|
|
|
|||||
Total
|
$ | 1,004 | $ | 1,263 | ||||
|
|
|
|
5.
|
Accrued Expenses and Other Current Liabilities
|
2020
|
2019
|
|||||||
Accrued bonus
|
$ | 1,715 | $ | 700 | ||||
Accrued royalties
|
101 | 400 | ||||||
Accrued wages and benefits
|
287 | 165 | ||||||
Accrued clinical study expenses
|
9 | 192 | ||||||
Accrued consulting service expenses
|
100 | 89 | ||||||
Other accrued expenses
|
233 | 277 | ||||||
|
|
|
|
|||||
$ | 2,445 | $ | 1,823 | |||||
|
|
|
|
6.
|
Corporate Bond
|
Corporate bond
|
$ | 5,000 | ||
Unamortized discount on corporate bond
|
(3,538 | ) | ||
|
|
|||
Corporate bond, net of discount
|
$ | 1,462 | ||
|
|
7.
|
Note Payable
|
• |
2020 Growth Capital Tranche 2 – $2,000, available following the achievement of a certain revenue milestone, the occurrence of which must be on or prior to September 30, 2021 or prior to an event of default.
|
• |
2020 Growth Capital Tranche 3 – $2,000, available following the achievement of an equity event satisfactory to the financial institution’s sole discretion which results in an unrestricted and unencumbered net cash proceeds from a single round of the sale of Company’s equity securities, the occurrence of which must be on or prior to September 30, 2021 or prior to an event of default.
|
Description
|
Amounts
|
|||
Note payable
|
$ | 2,000 | ||
Final Payment
|
100 | |||
Unamortized debt issuance costs
|
(172 | ) | ||
|
|
|||
Note payable, net of debt issuance costs
|
$ | 1,928 | ||
|
|
Years Ending December 31,
|
||||
2021
|
$ | 188 | ||
2022
|
750 | |||
2023
|
750 | |||
2024
|
312 | |||
|
|
|||
$ | 2,000 | |||
|
|
8.
|
Redeemable Convertible Preferred Stock
|
9.
|
Common Stock
|
2020
|
2019
|
|||||||
Research and development
|
$ | 988 | $ | 568 | ||||
General and administrative
|
1,910 | 1,810 | ||||||
|
|
|
|
|||||
Total
|
$ | 2,898 | $ | 2,378 | ||||
|
|
|
|
Number of
Options |
Weighted-
Average Exercise Price Per Share |
Weighted-
Average Remaining Contractual Term (Years) |
Aggregate
Intrinsic Value |
|||||||||||||
Balance, December 31, 2018
|
4,781,706 | $ | 3.92 | 8.42 | $ | 13,458 | ||||||||||
Granted
|
1,065,700 | $ | 5.72 | |||||||||||||
Cancelled
|
(455,946 | ) | $ | 5.04 | ||||||||||||
Exercised
|
(1,962 | ) | $ | 2.63 | ||||||||||||
|
|
|||||||||||||||
Balance, December 31, 2019
|
5,389,498 | $ | 4.19 | 7.77 | $ | 8,740 | ||||||||||
|
|
|||||||||||||||
Granted
|
1,279,469 | $ | 6.29 | |||||||||||||
Cancelled
|
(644,075 | ) | $ | 5.06 | ||||||||||||
Exercised
|
(4,500 | ) | $ | 4.28 | ||||||||||||
|
|
|||||||||||||||
Balance, December 31, 2020
|
6,020,392 | $ | 4.53 | 7.25 | $ | 13,878 | ||||||||||
|
|
|||||||||||||||
Exercisable, December 31, 2020
|
3,452,800 | $ | 3.52 | 6.21 | $ | 11,469 | ||||||||||
Options vested and expected to vest, December 31, 2020
|
6,020,392 | $ | 4.53 | 7.25 | $ | 13,878 |
2020
|
2019
|
|||||||
Fair value of common stock
|
$ | 6.29 | $ | 5.79 | ||||
Expected volatility
|
93.50 | % | 46.28 | % | ||||
Expected term (in years)
|
5.94 | 6.07 | ||||||
Risk-free interest rate
|
0.46 | % | 1.91 | |||||
Expected dividend yield
|
0 | % | 0 | % |
10.
|
Fair Value of Financial Assets and Liabilities
|
Fair Value Measurements as of December 31, 2020 | ||||||||||||||||
Description
|
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets
|
||||||||||||||||
Cash equivalents:
|
||||||||||||||||
Money market funds
|
$ | 17,508 | $ | — | $ | — | $ | 17,508 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Fair Value Measurements as of December 31, 2019 | ||||||||||||||||
Description
|
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets
|
||||||||||||||||
Cash equivalents:
|
||||||||||||||||
Money market funds
|
$ | 38,498 | $ | — | $ | — | $ | 38,498 | ||||||||
|
|
|
|
|
|
|
|
11.
|
Commitments and Contingencies
|
2021
|
$ | 1,295 | ||
2022
|
1,254 | |||
2023
|
878 | |||
2024
|
914 | |||
2025
|
950 | |||
Thereafter
|
904 | |||
|
|
|||
Total
|
$ | 6,195 | ||
|
|
12.
|
Income Taxes
|
2020
|
2019
|
|||||||
Current:
|
||||||||
Federal
|
$ | — | $ | — | ||||
State
|
1 | 13 | ||||||
|
|
|
|
|||||
Total current expense (benefit)
|
1 | 13 | ||||||
Deferred:
|
||||||||
Federal
|
— | — | ||||||
State
|
— | — | ||||||
|
|
|
|
|||||
Total deferred expense (benefit)
|
— | — | ||||||
Change in valuation allowance
|
— | — | ||||||
|
|
|
|
|||||
Net deferred expense (benefit)
|
— | — | ||||||
|
|
|
|
|||||
Total tax recognized
|
$ | 1 | $ | 13 | ||||
|
|
|
|
2020
|
2019
|
|||||||
Benefit at federal statutory rate
|
21.00 | % | 21.00 | % | ||||
State taxes
|
2.70 | % | 3.86 | % | ||||
Credits
|
2.61 | % | 5.63 | % | ||||
Share-based payment measurement
|
-1.01 | % | -0.94 | % | ||||
Other
|
0.18 | % | 6.72 | % | ||||
Change in valuation allowance
|
-25.49 | % | -36.33 | % | ||||
|
|
|
|
|||||
Effective tax rate
|
-0.01 | % | -0.06 | % | ||||
|
|
|
|
2020
|
2019
|
|||||||
Deferred tax assets:
|
||||||||
Operating tax losses
|
$ | 26,016 | $ | 21,188 | ||||
Research credits
|
4,810 | 3,770 | ||||||
Temporary difference
|
773 | 582 | ||||||
Share-based payments
|
1,099 | 659 | ||||||
|
|
|
|
|||||
Deferred tax assets
|
32,698 | 26,199 | ||||||
Valuation allowance
|
(32,090 | ) | (25,552 | ) | ||||
|
|
|
|
|||||
Deferred tax assets, Less: valuation allowance
|
608 | 647 | ||||||
Deferred tax liabilities:
|
||||||||
Other temporary differences
|
(608 | ) | (647 | ) | ||||
|
|
|
|
|||||
Deferred tax liabilities
|
(608 | ) | (647 | ) | ||||
|
|
|
|
|||||
Total
|
$ | — | $ | — | ||||
|
|
|
|
13.
|
Net Loss Per Share
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Numerator:
|
||||||||
Net loss attributable to common stockholders – basic and diluted
|
$ | (25,646 | ) | $ | (20,634 | ) | ||
Denominator:
|
||||||||
Weighted-average common stock outstanding
|
1,155,319 | 1,152,449 | ||||||
|
|
|
|
|||||
Net loss per share attributable to common stockholders – basic and diluted
|
$ | (22.20 | ) | $ | (17.90 | ) | ||
|
|
|
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Series
A-1
convertible preferred stock (as converted to common stock)
|
4,000,000 | 4,000,000 | ||||||
Series
A-2
convertible preferred stock (as converted to common stock)
|
4,427,072 | 4,427,072 | ||||||
Series B convertible preferred stock (as converted to common stock)
|
7,341,485 | 7,341,485 | ||||||
Series C convertible preferred stock (as converted to common stock)
|
8,016,645 | 8,016,645 | ||||||
Warrants to purchase common stock
|
77,672 | 15,176 | ||||||
Stock options to purchase common stock
|
6,020,392 | 5,389,498 | ||||||
|
|
|
|
|||||
Total
|
29,883,266 | 29,189,876 | ||||||
|
|
|
|
14.
|
Related Party Transactions
|
15.
|
Employee Benefit Plan
|
16.
|
Subsequent Events
|
• |
2021 Tranche 1 – $35,000, available to be advanced at loan closing through September 30, 2022. A minimum of $5,000 shall be drawn at close and subsequent advances can be taken in minimum draw amounts of $5,000.
|
• |
2021 Tranche 2 – $5,000, available through December 31, 2022 following the achievement of a certain revenue milestone.
|
• |
2021 Tranche 3 – $10,000, available through December 31, 2022 subject to financial institution’s sole discretion.
|
September 30,
2021 |
December 31,
2020 |
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 94,842 | $ | 18,528 | ||||
Restricted cash
|
305 | 305 | ||||||
Accounts receivable
|
29 | 8 | ||||||
Prepaid expenses and other current assets
|
1,440 | 314 | ||||||
|
|
|
|
|||||
Total current assets
|
96,616 | 19,155 | ||||||
Property and equipment, net
|
1,265 | 1,004 | ||||||
Deposits
|
22 | 22 | ||||||
Prepaid expenses and other long-term assets
|
84 | — | ||||||
|
|
|
|
|||||
Total assets
|
$
|
97,987
|
|
$
|
20,181
|
|
||
|
|
|
|
|||||
Liabilities, redeemable convertible preferred stock and stockholders’ deficit
|
||||||||
Current liabilities:
|
||||||||
Note payable
|
$ | — | $ | 114 | ||||
Accounts payable
|
1,655 | 876 | ||||||
Accrued expenses and other current liabilities
|
4,902 | 2,445 | ||||||
Deferred revenue
|
172 | 369 | ||||||
Deferred rent, short term
|
121 | 121 | ||||||
|
|
|
|
|||||
Total current liabilities
|
6,850 | 3,925 | ||||||
Note payable, long term
|
4,744 | 1,814 | ||||||
Corporate bond, net of bond discount
|
1,593 | 1,462 | ||||||
Deferred rent, long term
|
740 | 774 | ||||||
Other long-term liabilities
|
170 | 222 | ||||||
|
|
|
|
|||||
Total liabilities
|
|
14,097
|
|
|
8,197
|
|
||
|
|
|
|
|||||
Commitments and contingencies
|
||||||||
Redeemable convertible preferred stock, $0.0001 par value – authorized 41,785,202 shares:
|
||||||||
Series
A-1:
designated, 4,000,000 shares; issued and outstanding shares, 4,000,000 at September 30, 2021 and December 31, 2020 (liquidation value of $4,000 at September 30, 2021 and December 31, 2020)
|
— | — | ||||||
Series
A-2:
designated 4,427,072 shares; issued and outstanding shares, 4,427,072 at September 30, 2021 and December 31, 2020 (liquidation value of $8,832 at September 30, 2021 and December 31, 2020)
|
7,128 | 7,128 | ||||||
Series B: designated 7,341,485 shares; issued and outstanding shares, 7,341,485 at September 30, 2021 and December 31, 2020 (liquidation value of $42,360 at September 30, 2021 and December 31, 2020)
|
41,854 | 41,854 | ||||||
Series C: designated 8,016,645 shares; issued and outstanding shares, 8,016,645 at September 30, 2021 and December 31, 2020 (liquidation value of $68,200 at September 30, 2021 and December 31, 2020)
|
67,904 | 67,904 | ||||||
Series D: designated 18,000,000 shares; issued and outstanding shares, 13,053,508 at September 30, 2021 (liquidation value of $170,832 at September 30, 2021)
|
170,832 | — | ||||||
Stockholders’ deficit:
|
||||||||
Common shares, $0.0001 par value: 55,000,000 and 32,000,000 shares authorized at September 30, 2021 and December 31, 2020, respectively; 1,265,239 and 1,157,868 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively
|
— | — | ||||||
Additional
paid-in
capital
|
— | 9,905 | ||||||
Accumulated deficit
|
(203,828 | ) | (114,807 | ) | ||||
|
|
|
|
|||||
Total stockholders’ deficit
|
|
(203,828
|
)
|
|
(104,902
|
)
|
||
|
|
|
|
|||||
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit
|
$
|
97,987
|
|
$
|
20,181
|
|
||
|
|
|
|
Nine Months Ended
September 30, |
||||||||
2021
|
2020
|
|||||||
Revenues
|
$ | 377 | $ | 3,839 | ||||
Cost of revenues
|
243 | 451 | ||||||
|
|
|
|
|||||
Gross profit
|
134 | 3,388 | ||||||
Operating expenses:
|
||||||||
Research and development
|
12,739 | 11,548 | ||||||
Selling, general and administrative
|
28,675 | 9,725 | ||||||
|
|
|
|
|||||
Total operating expenses
|
41,414 | 21,273 | ||||||
|
|
|
|
|||||
Operating loss
|
(41,280 | ) | (17,885 | ) | ||||
|
|
|
|
|||||
Other income (expense):
|
||||||||
Other income
|
16 | 122 | ||||||
Interest expense
|
(292 | ) | (257 | ) | ||||
Loss on extinguishment of debt
|
(181 | ) | — | |||||
|
|
|
|
|||||
Total other income
|
(457 | ) | (135 | ) | ||||
|
|
|
|
|||||
Loss before income taxes
|
(41,737 | ) | (18,020 | ) | ||||
Expense from income taxes
|
— | 2 | ||||||
|
|
|
|
|||||
Net loss and comprehensive loss
|
$ | (41,737 | ) | $ | (18,022 | ) | ||
|
|
|
|
|||||
Dividends on Series D convertible preferred stock
|
$ | (3,888 | ) | — | ||||
Redemption value of Series D convertible preferred stock
|
(57,263 | ) | — | |||||
|
|
|
|
|||||
Net loss attributable to common stockholders
|
$ | (102,888 | ) | $ | (18,022 | ) | ||
|
|
|
|
|||||
Net loss per share:
|
||||||||
Basic and diluted
|
$ | (88.75 | ) | $ | (15.61 | ) | ||
|
|
|
|
|||||
Weighted average common shares outstanding:
|
||||||||
Basic and diluted
|
1,159,297 | 1,154,463 | ||||||
|
|
|
|
Nine Months Ended September 30, 2021
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series
A-1
Redeemable Convertible Preferred Stock |
Series
A-2
Redeemable Convertible Preferred Stock |
Series B
Redeemable Convertible Preferred Stock |
Series C
Redeemable Convertible Preferred Stock |
Series D
Redeemable Convertible Preferred Stock |
Common Stock |
Additional
Paid-in
Capital |
Accumulated
Deficit |
Total
Stockholders’ Deficit |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Value | Shares | Value | Shares | Value | Shares | Value | Shares | Value | Shares | Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020
|
|
4,000,000
|
|
$
|
—
|
|
|
4,427,072
|
|
$
|
7,128
|
|
|
7,341,485
|
|
$
|
41,854
|
|
|
8,016,645
|
|
$
|
67,904
|
|
|
—
|
|
$
|
—
|
|
|
|
1,157,868
|
|
$
|
—
|
|
$
|
9,905
|
|
$
|
(114,807
|
)
|
$
|
(104,902
|
)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Stock-based compensation expense
|
— | — | — | — | — | — | — | — | — | — |
|
— | — | 3,548 | — | 3,548 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options
|
— | — | — | — | — | — | — | — | — | — |
|
107,371 | — | 146 | — | 146 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock warrants
|
— | — | — | — | — | — | — | — | — | — |
|
— | — | 268 | — | 268 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of convertible preferred stock, net of issuance costs
|
— | — | — | — | — | — | — | — | 13,053,508 | 109,681 |
|
— | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock divdend
|
— | — | — | — | — | — | — | — | — | 3,888 |
|
— | — | (2,625 | ) | (1,263 | ) | (3,888 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Redemption value
|
— | — | — | — | — | — | — | — | — | 57,263 |
|
— | — | (11,242 | ) | (46,021 | ) | (57,263 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
— | — | — | — | — | — | — | — | — | — |
|
— | — | — | (41,737 | ) | (41,737 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Balance at September 30, 2021
|
|
4,000,000
|
|
$
|
—
|
|
|
4,427,072
|
|
$
|
7,128
|
|
|
7,341,485
|
|
$
|
41,854
|
|
|
8,016,645
|
|
$
|
67,904
|
|
|
13,053,508
|
|
$
|
170,832
|
|
|
|
1,265,239
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(203,828
|
)
|
$
|
(203,828
|
)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2020
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series
A-1
Redeemable Convertible Preferred Stock |
Series
A-2
Redeemable Convertible Preferred Stock |
Series B
Redeemable Convertible Preferred Stock |
Series C
Redeemable Convertible Preferred Stock |
Common Stock |
Additional
Paid-in
Capital |
Accumulated
Deficit |
Total
Stockholders’ Deficit |
|||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Value | Shares | Value | Shares | Value | Shares | Value | Shares | Value | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019
|
|
4,000,000
|
|
$
|
—
|
|
|
4,427,072
|
|
$
|
7,128
|
|
|
7,341,485
|
|
$
|
41,854
|
|
|
8,016,645
|
|
$
|
67,904
|
|
|
|
1,153,368
|
|
$
|
—
|
|
$
|
6,913
|
|
$
|
(89,161
|
)
|
$
|
(82,248
|
)
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Stock-based compensation expense
|
— | — | — | — | — | — | — | — |
|
— | — | 2,158 | — | 2,158 | ||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options
|
— | — | — | — | — | — | — | — |
|
4,500 | — | 19 | — | 19 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock warrants
|
— | — | — | — | — | — | — | — |
|
— | — | 75 | — | 75 | ||||||||||||||||||||||||||||||||||||||||||
Net loss
|
— | — | — | — | — | — | — | — |
|
— | — | — | (18,022 | ) | (18,022 | ) | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Balance at September 30, 2020
|
|
4,000,000
|
|
$
|
—
|
|
|
4,427,072
|
|
$
|
7,128
|
|
|
7,341,485
|
|
$
|
41,854
|
|
|
8,016,645
|
|
$
|
67,904
|
|
|
|
1,157,868
|
|
$
|
—
|
|
$
|
9,165
|
|
$
|
(107,183
|
)
|
$
|
(98,018
|
)
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||||
2021
|
2020
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$ | (41,737 | ) | $ | (18,022 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization of property and equipment
|
198 | 230 | ||||||
Stock-based compensation expense
|
3,548 | 2,158 | ||||||
Loss on disposal of fixed assets
|
13 | 6 | ||||||
Loss on extinguishment of debt
|
181 | — | ||||||
Non cash interest expense
|
135 | 250 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(21 | ) | (73 | ) | ||||
Prepaid expenses and other current assets
|
(1,126 | ) | 194 | |||||
Prepaid expenses and other long-term assets
|
(84 | ) | — | |||||
Accounts payable
|
786 | (343 | ) | |||||
Accrued expenses and other current liabilities
|
2,457 | 634 | ||||||
Deferred rent and other long term liabilities
|
(86 | ) | 242 | |||||
Deferred revenue
|
(197 | ) | (3,378 | ) | ||||
|
|
|
|
|||||
Net cash used in operating activities
|
(35,933 | ) | (18,102 | ) | ||||
|
|
|
|
|||||
Cash flows from investing activities:
|
||||||||
Acquisition of property and equipment
|
(53 | ) | (103 | ) | ||||
Capitalized software development costs
|
(427 | ) | — | |||||
|
|
|
|
|||||
Net cash used in investing activities
|
(480 | ) | (103 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from note payable
|
5,000 | 2,000 | ||||||
Proceeds from issuance of preferred stock, net issuance costs
|
109,681 | — | ||||||
Payment of debt issuance costs
|
(74 | ) | (21 | ) | ||||
Payment of premium on note payable
|
(26 | ) | — | |||||
Repayment of principal on note payable
|
(2,000 | ) | — | |||||
Proceeds from exercise of stock options
|
146 | 19 | ||||||
|
|
|
|
|||||
Net cash provided by financing activities
|
112,727 | 1,998 | ||||||
|
|
|
|
|||||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
76,314 | (16,207 | ) | |||||
Cash, cash equivalents, and restricted cash at beginning of period
|
$ | 18,833 | $ | 41,502 | ||||
Cash, cash equivalents, and restricted cash at end of period
|
$ | 95,147 | $ | 25,295 | ||||
|
|
|
|
|||||
Supplementary Information:
|
||||||||
Cash paid for income taxes
|
$ | — | $ | 15 | ||||
Cash paid for interest
|
128 | — | ||||||
Noncash investing and financing activities:
|
||||||||
Purchase of property and equipment included in accounts payable and accrued expenses
|
11 | 3 | ||||||
Common stock warrants issued related to note payable
|
268 | 75 | ||||||
Redemption value of Series D preferred stock
|
57,263 | — | ||||||
Dividends accrued for Series D preferred stock
|
3,888 | — |
1.
|
Nature of the Business and Basis of Presentation
|
2.
|
Summary of Significant Accounting Policies
|
Nine Months Ended September 30,
|
||||||||
2021
|
2020
|
|||||||
Client revenue
|
$ | 123 | $ | — | ||||
Collaboration revenue
|
254 | 3,839 | ||||||
|
|
|
|
|||||
Total
|
$ | 377 | $ | 3,839 | ||||
|
|
|
|
Contract Liabilities
|
Client
|
Collaboration
|
||||||
Balance at December 31, 2020
|
$ | 17 | $ | 352 | ||||
Revenue recognized
|
(123 | ) | (254 | ) | ||||
Revenue deferred
|
180 | — | ||||||
|
|
|
|
|||||
Balance at September 30, 2021
|
$ | 74 | $ | 98 | ||||
|
|
|
|
3.
|
Option and Collaboration Agreements
|
4.
|
Property and Equipment
|
September 30,
|
December 31,
|
|||||||
2021
|
2020
|
|||||||
Furniture and fixtures
|
$ | 184 | $ | 184 | ||||
Computer equipment
|
352 | 306 | ||||||
Office equipment
|
60 | 60 | ||||||
Leasehold improvements
|
975 | 1,020 | ||||||
Capitalized
internal-use
software costs
|
427 | — | ||||||
Software
|
84 | 84 | ||||||
|
|
|
|
|||||
Total property and equipment
|
2,082 | 1,654 | ||||||
Less: accumulated depreciation and amortization
|
(817 | ) | (650 | ) | ||||
|
|
|
|
|||||
Property and equipment, net
|
$ | 1,265 | $ | 1,004 | ||||
|
|
|
|
5.
|
Accrued Expenses and Other Current Liabilities
|
September 30,
|
December 31,
|
|||||||
2021
|
2020
|
|||||||
Accrued bonus
|
$ | 1,814 | $ | 1,715 | ||||
Accrued royalties
|
105 | 101 | ||||||
Accrued wages and benefits
|
555 | 287 | ||||||
Accrued clinical study expenses
|
346 | 9 | ||||||
Accrued consulting service expenses
|
1,016 | 100 | ||||||
Due to shareholder
|
724 | — | ||||||
Other accrued expenses
|
342 | 233 | ||||||
|
|
|
|
|||||
Total
|
$ | 4,902 | $ | 2,445 | ||||
|
|
|
|
6.
|
Corporate Bond
|
September 30,
|
December 31,
|
|||||||
2021
|
2020
|
|||||||
Corporate bond
|
5,000 | $ | 5,000 | |||||
Unamortized discount on corporate bond
|
(3,407 | ) | (3,538 | ) | ||||
|
|
|
|
|||||
Corporate bond, net of discount
|
$ | 1,593 | $ | 1,462 | ||||
|
|
|
|
7.
|
Note Payable
|
• |
Tranche 2 – $5,000, is available following the achievement of a certain revenue milestone, the occurrence of which must be on or prior to December 31, 2022 or prior to an event of default.
|
• |
Tranche 3 – $10,000, is available based on the sole discretion of the Lenders, the occurrence of which must be on or prior to December 31, 2022 or prior to an event of default.
|
Description
|
Amounts
|
|||
Note payable
|
$ | 5,000 | ||
Final Payment
|
250 | |||
Unamortized debt issuance costs
|
(506 | ) | ||
|
|
|||
Note payable, net of debt issuance costs
|
$ | 4,744 | ||
|
|
Years Ending December 31,
|
Amounts
|
|||
2022
|
— | |||
2023
|
1,250 | |||
2024
|
2,500 | |||
2025
|
1,250 | |||
|
|
|||
Total
|
$ | 5,000 | ||
|
|
8.
|
Redeemable Convertible Preferred Stock
|
9.
|
Common Stock
|
Nine Months Ended September 30,
|
||||||||
2021
|
2020
|
|||||||
Research and development
|
$ | 920 | $ | 708 | ||||
Selling, general and administrative
|
2,628 | 1,450 | ||||||
|
|
|
|
|||||
Total
|
$ | 3,548 | $ | 2,158 | ||||
|
|
|
|
Number of
Options |
Weighted-
Average Exercise Price Per Share |
Weighted-
Average Remaining Contractual Term (Years) |
Aggregate
Intrinsic Value |
|||||||||||||
Balance, December 31, 2020
|
6,020,392 | $ | 4.53 | 7.25 | $ | 13,878 | ||||||||||
Granted
|
5,783,942 | $ | 4.40 | |||||||||||||
Cancelled
|
(3,948,025 | ) | $ | 5.85 | ||||||||||||
Exercised
|
(107,371 | ) | $ | 1.36 | ||||||||||||
|
|
|||||||||||||||
Balance, September 30, 2021
|
7,748,938 | $ | 3.81 | 7.40 | $ | 4,733 | ||||||||||
|
|
|||||||||||||||
Exercisable, September 30, 2021
|
4,243,603 | $ | 3.32 | 6.03 | $ | 4,733 | ||||||||||
Options vested and expected to vest, September 30, 2021
|
7,748,938 | $ | 3.81 | 7.40 | $ | 4,733 |
Nine Months Ended September 30,
|
||||||||
2021
|
2020
|
|||||||
Fair value of common stock
|
$ | 4.40 | $ | 5.80 | ||||
Expected volatility
|
98.73 | % | 94.37 | % | ||||
Expected term (in years)
|
4.88 | 5.81 | ||||||
Risk-free interest rate
|
0.81 | % | 0.42 | % | ||||
Expected dividend yield
|
0.00 | % | 0.00 | % |
10.
|
Fair Value of Financial Assets and Liabilities
|
Fair Value Measurements as of September 30, 2021 | ||||||||||||||||
Description
|
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets
|
||||||||||||||||
Cash equivalents:
|
||||||||||||||||
Money market funds
|
$ | 61,509 | $ | — | $ | — | $ | 61,509 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Fair Value Measurements as of December 31, 2020 | ||||||||||||||||
Description
|
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets
|
||||||||||||||||
Cash equivalents:
|
||||||||||||||||
Money market funds
|
$ | 17,508 | $ | — | $ | — | $ | 17,508 | ||||||||
|
|
|
|
|
|
|
|
11.
|
Net Loss Per Share
|
Nine Months Ended September 30,
|
||||||||
2021
|
2020
|
|||||||
Numerator:
|
||||||||
Net loss
|
$ | (41,737 | ) | $ | (18,022 | ) | ||
Dividends on Series D convertible preferred stock
|
(3,888 | ) | — | |||||
Redemption value of Series D convertible preferred stock
|
(57,263 | ) | — | |||||
|
|
|
|
|||||
Net loss attributable to common stockholders – basic and diluted
|
$ | (102,888 | ) | $ | (18,022 | ) | ||
Denominator:
|
||||||||
Weighted-average common stock outstanding
|
1,159,297 | 1,154,463 | ||||||
|
|
|
|
|||||
Net loss per share attributable to common stockholders – basic and diluted
|
$ | (88.75 | ) | $ | (15.61 | ) | ||
|
|
|
|
Nine Months Ended September 30,
|
||||||||
2021
|
2020
|
|||||||
Series
A-1
convertible preferred stock (as converted to common stock)
|
4,000,000 | 4,000,000 | ||||||
Series
A-2
convertible preferred stock (as converted to common stock)
|
4,427,072 | 4,427,072 | ||||||
Series B convertible preferred stock (as converted to common stock)
|
7,341,485 | 7,341,485 | ||||||
Series C convertible preferred stock (as converted to common stock)
|
8,016,645 | 8,016,645 | ||||||
Series D convertible preferred stock (as converted to common stock)
|
19,580,262 | — | ||||||
Warrants to purchase common stock
|
226,196 | 77,672 | ||||||
Stock options to purchase common stock
|
7,748,938 | 5,565,965 | ||||||
|
|
|
|
|||||
Total
|
51,340,598 | 29,428,839 | ||||||
|
|
|
|
12.
|
Subsequent Events
|
Page
|
||||||
Article I | ||||||
CERTAIN DEFINITIONS | ||||||
Section 1.1.
|
Definitions | A-3 | ||||
Section 1.2.
|
Other Defined Terms | A-14 | ||||
Section 1.3.
|
Construction | A-16 | ||||
Section 1.4.
|
Knowledge | A-17 | ||||
Article II | ||||||
THE MERGER; CLOSING | ||||||
Section 2.1.
|
The Merger | A-17 | ||||
Section 2.2.
|
Effects of the Merger | A-17 | ||||
Section 2.3.
|
Closing; Effective Time | A-17 | ||||
Section 2.4.
|
Closing Deliverables | A-18 | ||||
Section 2.5.
|
Governing Documents | A-19 | ||||
Section 2.6.
|
Directors and Officers | A-19 | ||||
Section 2.7.
|
U.S. Tax Treatment | A-19 | ||||
Section 2.8.
|
Earnout | A-20 | ||||
Section 2.9.
|
Earnout Pro Rata Share; Earnout Award Agreements | A-21 | ||||
Section 2.10.
|
Escrow | A-21 | ||||
Article III | ||||||
EFFECTS OF THE MERGER ON THE COMPANY CAPITAL STOCK AND EQUITY AWARDS | ||||||
Section 3.1.
|
Conversion of Securities | A-22 | ||||
Section 3.2.
|
Exchange Procedures | A-23 | ||||
Section 3.3.
|
Treatment of Company Options | A-24 | ||||
Section 3.4.
|
Withholding | A-24 | ||||
Section 3.5.
|
Dissenting Shares | A-24 | ||||
Article IV | ||||||
REPRESENTATIONS AND WARRANTIES OF THE COMPANY | ||||||
Section 4.1.
|
Company Organization | A-25 | ||||
Section 4.2.
|
Subsidiaries | A-25 | ||||
Section 4.3.
|
Due Authorization | A-25 | ||||
Section 4.4.
|
No Conflict | A-26 | ||||
Section 4.5.
|
Governmental Authorities; Approvals | A-26 | ||||
Section 4.6.
|
Capitalization of the Company | A-27 | ||||
Section 4.7.
|
Capitalization of Subsidiaries | A-28 | ||||
Section 4.8.
|
Financial Statements | A-28 | ||||
Section 4.9.
|
Undisclosed Liabilities | A-29 | ||||
Section 4.10.
|
Litigation and Proceedings | A-29 | ||||
Section 4.11.
|
Legal Compliance | A-29 | ||||
Section 4.12.
|
Contracts; No Defaults | A-29 | ||||
Section 4.13.
|
Company Benefit Plans | A-31 | ||||
Section 4.14.
|
Labor Relations; Employees | A-33 | ||||
Section 4.15.
|
Taxes | A-34 |
Page
|
||||||
Section 11.8.
|
Headings; Counterparts | A-72 | ||||
Section 11.9.
|
Company and Acquiror Disclosure Letters | A-72 | ||||
Section 11.10.
|
Entire Agreement | A-73 | ||||
Section 11.11.
|
Amendments | A-73 | ||||
Section 11.12.
|
Publicity | A-73 | ||||
Section 11.13.
|
Severability | A-73 | ||||
Section 11.14.
|
Jurisdiction; Waiver of Jury Trial | A-74 | ||||
Section 11.15.
|
Enforcement | A-74 | ||||
Section 11.16.
|
Non-Recourse | A-74 | ||||
Section 11.17.
|
Non-Survival of Representations, Warranties and Covenants | A-74 | ||||
Section 11.18.
|
Legal Representation | A-75 | ||||
Exhibits | ||||||
Exhibit A | Form of Certificate of Incorporation of Acquiror upon Domestication | |||||
Exhibit B | Form of Bylaws of Acquiror upon Domestication | |||||
Exhibit C | Form of Registration Rights Agreement | |||||
Exhibit D |
Form of
Lock-Up
Agreement
|
|||||
Exhibit E | Form of Incentive Equity Plan | |||||
Exhibit F | Form of Employee Stock Purchase Plan |
Terms
|
Section
|
|||
2021 Audited Financial Statements
|
6.3 | |||
2022 Financial Statements
|
6.3 | |||
Acquiror
|
Preamble | |||
Acquiror Cure Period
|
10.1(g) | |||
Acquiror Disclosure Letter
|
Article V | |||
Acquiror Financial Statements
|
5.6(d) | |||
Acquiror Indemnified Parties
|
7.8(a) | |||
Acquiror Option
|
3.3(a) | |||
Acquiror SEC Filings
|
5.5 | |||
Acquiror Securities
|
5.12(a) | |||
Acquiror Shareholders’ Meeting
|
8.2(b) | |||
Affiliate Agreements
|
4.12(a)(vi) | |||
Agreement
|
Preamble | |||
Agreement End Date
|
10.1(e) | |||
Ancillary Agreements
|
11.10 | |||
Available Acquiror Cash
|
7.2(a) | |||
Class III
|
7.6(a) | |||
Closing
|
2.3(a) | |||
Closing Date
|
2.3(a) | |||
Code
|
Recitals | |||
Company
|
Preamble | |||
Company Benefit Plan
|
4.13(a) | |||
Company Cure Period
|
10.1(e) | |||
Company Disclosure Letter
|
Article IV | |||
Company Indemnified Parties
|
7.8(a) | |||
Company Registered Intellectual Property
|
4.22(a) | |||
Confidentiality Agreement
|
11.10 | |||
Constituent Corporations
|
2.1(a) |
Terms
|
Section
|
|||
Continental
|
5.8 | |||
D&O Indemnified Parties
|
7.8(a) | |||
DGCL
|
Recitals | |||
Dissenting Shares
|
3.5 | |||
Domesticated Acquiror Certificate of Incorporation
|
7.7 | |||
Domesticated Acquiror Common Stock
|
Recitals | |||
Domestication
|
Recitals | |||
Earnout Award Agreement
|
2.9(b) | |||
Earnout Escrow Agreement
|
2.10(a) | |||
Earnout Recipients
|
2.8(a) | |||
Effective Time
|
2.3(b) | |||
ERISA
|
4.13(a) | |||
ESPP
|
7.1(a) | |||
Exchange Agent
|
3.2(a) | |||
Exchange Agent Termination Date
|
3.2(d) | |||
Export Approvals
|
4.27(a) | |||
Financial Statements
|
4.8(a)(ii) | |||
Goodwin
|
11.18(a) | |||
Goodwin Privileged Communications
|
11.18(a) | |||
Goodwin Waiving Parties
|
11.18(a) | |||
Goodwin WP Group
|
11.18(a) | |||
Government Contract
|
4.30 | |||
Governmental Approval
|
4.5 | |||
Health Care Program Laws
|
4.19(c) | |||
Incentive Equity Plan
|
7.1(a) | |||
Independent Director
|
7.6(b) | |||
Interim Period
|
6.1 | |||
JOBS Act
|
5.6(a) | |||
Legal Proceedings
|
4.10 | |||
Letter of Transmittal
|
3.2(b) | |||
Listing Application
|
7.3 | |||
Lock-Up
Agreement
|
Recitals | |||
Merger
|
Recitals | |||
Merger Certificate
|
2.1(a) | |||
Merger Sub
|
Preamble | |||
Minimum Available Acquiror Cash Amount
|
7.2(a) | |||
Minimum PIPE Investment Amount
|
5.12(e) | |||
Modification in Recommendation
|
8.2(b) | |||
Multiemployer Plan
|
4.13(c) | |||
Nasdaq
|
5.6(c) | |||
Offer Documents
|
8.2(a)(i) | |||
Other Indemnitors
|
7.8(e) | |||
Owned Land
|
4.21(b) | |||
Personal Information Laws and Policies
|
4.23(a) | |||
Prospectus
|
11.1 | |||
Proxy Statement
|
8.2(a)(i) | |||
Proxy Statement/Registration Statement
|
8.2(a)(i) | |||
Q3 Financial Statements
|
6.3 | |||
Real Property Leases
|
4.21(a)(iii) | |||
Registration Rights Agreement
|
Recitals | |||
Registration Statement Securities
|
8.2(a)(i) |
Terms
|
Section
|
|||
Release Notice
|
2.10(b) | |||
Surviving Corporation
|
2.1(b) | |||
Tax Opinion
|
2.7(b) | |||
Terminating Acquiror Breach
|
10.1(g) | |||
Terminating Company Breach
|
10.1(e) | |||
Title IV Plan
|
4.13(c) | |||
Top Customers
|
4.29(a) | |||
Top Vendors
|
4.29(a) | |||
Transaction Litigation
|
7.11 | |||
Transaction Proposals
|
8.2(b) | |||
Treasury Share
|
3.1(a) | |||
Trust Account
|
11.1 | |||
Trust Agreement
|
5.8 | |||
U.S. Tax Treatment
|
2.7(a) | |||
Wachtell Lipton
|
11.18(b) | |||
Wachtell Lipton Privileged Communications
|
11.18(b) | |||
Wachtell Lipton Waiving Parties
|
11.18(b) | |||
Wachtell Lipton WP Group
|
11.18(b) |
(a) |
If to Acquiror or Merger Sub:
|
Attention: |
James Ryans, Chief Financial Officer
|
Email: |
legal@socialcapital.com
|
(b) |
If to the Company:
|
SOCIAL CAPITAL SUVRETTA HOLDINGS CORP. I
|
||
By: |
/s/ Chamath Palihapitiya
|
|
Name: Chamath Palihapitiya | ||
Title: Chief Executive Officer | ||
KARIBU MERGER SUB, INC.
|
||
By: |
/s/ Kishan Mehta
|
|
Name: Kishan Mehta | ||
Title: President | ||
AKILI INTERACTIVE LABS, INC.
|
||
By: |
/s/ W. Edward Martucci, Ph.D.
|
|
Name: W. Edward Martucci, Ph.D. | ||
Title: Chief Executive Officer |
Attention: |
James Ryans, Chief Financial Officer
|
Email: |
legal@socialcapital.com
|
Attention: |
Raaj S. Narayan
|
Email: |
rsnarayan@wlrk.com
|
Attention: |
Eddie Martucci, Chief Executive Officer
|
Email: |
martucci@akiliinteractive.com
|
Attention: |
Arthur R. McGivern
|
Daniel J. Espinoza
|
Sarah Ashfaq
|
Email: |
amcgivern@goodwinlaw.com
|
despinoza@goodwinlaw.com
|
sashfaq@goodwinlaw.com
|
Attention: |
Arthur R. McGivern
|
Daniel J. Espinoza
|
Sarah Ashfaq
|
Email: |
amcgivern@goodwinlaw.com
|
despinoza@goodwinlaw.com
|
sashfaq@goodwinlaw.com
|
COMPANY STOCKHOLDERS:
|
||
By: |
/s/ W. Edward Martucci, Ph.D.
|
|
Name: W. Edward Martucci, Ph.D. | ||
By: |
/s/ Santosh Shanbag
|
|
Name: Santosh Shanbag | ||
By: |
/s/ Anil Jina
|
|
Name: Anil Jina | ||
By: |
/s/ Jacqueline Studer
|
|
Name: Jacqueline Studer | ||
PURETECH HEALTH LLC | ||
By: |
/s/ Bharatt Chowrira
|
|
Name: Bharatt Chowrira | ||
Title: President and Chief of Business and Strategy | ||
TLS BETA PTE. LTD. | ||
By: |
/s/ Fidah Alsagoff
|
|
Title: Authorised Signatory | ||
JAZZ HUMAN PERFORMANCE TECHNOLOGY
FUND, LP
|
||
By: | JAZZ Human Performance Technology GP, LLC, its general partner | |
By: |
/s/ John Spinale
|
|
Title: Managing Member | ||
JAZZ HUMAN PERFORMANCE OPPORTUNITY
FUND, LP
|
||
By: | JAZZ Human Performance Opportunity GP, LLC, its general partner | |
By: |
/s/ John Spinale
|
|
Title: Managing Member | ||
By: |
/s/ Adam Gazzaley, MD, PhD
|
|
Name: Adam Gazzaley, MD, PhD |
By: |
/s/ Robert Perez
|
|
Name: Robert Perez | ||
By: |
/s/ James Gates
|
|
Name: James Gates | ||
NEUBERGER BERMAN PRINCIPAL STRATEGIES PRIMA FUND LP | ||
By: | Neuberger Berman Investment Advisers LLC, its investment manager | |
By: |
/s/ Gabe Cahill
|
|
Name: Gabe Cahill | ||
Title: Managing Director | ||
NEUBERGER BERMAN PRINCIPAL STRATEGIES PRIMA CO-INVEST FUND VI LP | ||
By: | Neuberger Berman Investment Advisers LLC, its investment manager. | |
By: |
/s/ Gabe Cahill
|
|
Name: Gabe Cahill | ||
Title: Managing Director | ||
PRIMA MLP FUND LP | ||
By: | Neuberger Berman Investment Advisers LLC, its investment manager | |
By: |
/s/ Gabe Cahill
|
|
Name: Gabe Cahill | ||
Title: Managing Director |
ACQUIROR:
|
||
SOCIAL CAPITAL SUVRETTA HOLDINGS CORP. I | ||
By: |
/s/ Chamath Palihapitiya
|
|
Name: Chamath Palihapitiya | ||
Title: Chief Executive Officer |
COMPANY:
|
||
AKILI INTERACTIVE LABS, INC. | ||
By: |
/s/ W. Edward Martucci, Ph.D.
|
|
Name: W. Edward Martucci, Ph.D. | ||
Title: Chief Executive Officer |
Holder
|
Common
|
Series
A-1
Preferred Outstanding |
Series
A-2
Preferred Outstanding |
Series B
Preferred Outstanding |
Series C
Preferred Outstanding |
Series D
Preferred Outstanding |
Notice Information
|
|||||||||||||||||||
PureTech Health, LLC
|
4,000,000 | 2,115,029 | 4,332,830 |
6 Tide Street, Suite 400
Boston, MA 02210
|
||||||||||||||||||||||
TLS Beta Pte. Ltd.
|
3,526,383 | 2,966,706 |
60B Orchard Road
#06-18
Tower 2
The Atrium @ Orchard
Singapore 238891
|
|||||||||||||||||||||||
Jazz Human Performance Technology Fund, L.P.
|
1,083,170 | 587,731 | 534,007 |
548 Market Street #27799
San Francisco, CA 94104
|
||||||||||||||||||||||
Jazz Human Performance Opportunity Fund, L.P.
|
356,005 |
548 Market Street #27799
San Francisco, CA 94104
|
||||||||||||||||||||||||
Neuberger Berman Principal Strategies PRIMA Fund LP
|
1,201,813 |
190 S. LaSalle Street, 24
th
Floor
Chicago, IL 60603
|
||||||||||||||||||||||||
PRIMA MLP Fund LP
|
|
1,186,682
|
|
190 S. LaSalle Street, 24
th
Floor
Chicago, IL 60603
|
||||||||||||||||||||||
Neuberger Berman Principal Strategies PRIMA
Co-Invest
Fund VI LP
|
578,211 |
190 S. LaSalle Street, 24
th
Floor
Chicago, IL 60603
|
||||||||||||||||||||||||
W. Edward Martucci
|
c/o Akili Interactive Labs, Inc.
125 Broad Street, 5th Floor
Boston, MA 02110
|
|||||||||||||||||||||||||
Adam Gazzaley
|
946,250 |
c/o Akili Interactive Labs, Inc.
125 Broad Street, 5th Floor
Boston, MA 02110
|
||||||||||||||||||||||||
James Gates
|
c/o Akili Interactive Labs, Inc.
125 Broad Street, 5th Floor
Boston, MA 02110
|
|||||||||||||||||||||||||
Robert Perez
|
c/o Akili Interactive Labs, Inc.
125 Broad Street, 5th Floor
Boston, MA 02110
|
|||||||||||||||||||||||||
Anil Jina
|
c/o Akili Interactive Labs, Inc.
125 Broad Street, 5th Floor
Boston, MA 02110
|
|||||||||||||||||||||||||
Jacqueline Studer
|
c/o Akili Interactive Labs, Inc.
125 Broad Street, 5th Floor
Boston, MA 02110
|
|||||||||||||||||||||||||
Santosh Shanbhag
|
c/o Akili Interactive Labs, Inc.
125 Broad Street, 5th Floor
Boston, MA 02110
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total:
|
|
946,250
|
|
|
4,000,000
|
|
|
2,982,494
|
|
|
5,692,810
|
|
|
4,190,519
|
|
|
6,823,424
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
1. |
PureTech Health, LLC
|
2. |
TLS Beta Pte. Ltd.
|
3. |
Jazz Human Performance Technology Fund, L.P.
|
4. |
Jazz Human Performance Opportunity Fund, L.P.
|
5. |
Neuberger Berman Principal Strategies PRIMA Fund LP
|
6. |
PRIMA MLP Fund LP
|
7. |
Neuberger Berman Principal Strategies PRIMA
Co-Invest
Fund VI LP
|
8. |
John Spinale
|
9. |
Bharatt Chowrira
|
10. |
W. Edward Martucci
|
11. |
Adam Gazzaley
|
12. |
Robert Perez
|
13. |
Kenneth Ehlert
|
14. |
Christine Lemke
|
15. |
Anil Jina
|
16. |
Jacqueline Studer
|
17. |
Santosh Shanbhag
|
1. |
Jazz Human Performance Opportunity Fund, L.P.
|
2. |
Jazz Human Performance Technology Fund, L.P.
|
3. |
Neuberger Berman Principal Strategies PRIMA
Co-Invest
Fund VI LP
|
4. |
PRIMA MLP Fund LP
|
5. |
Neuberger Berman Principal Strategies PRIMA Fund LP
|
6. |
PureTech Health, LLC
|
7. |
TLS Beta Pte. Ltd.
|
8. |
John Spinale
|
9. |
Bharatt Chowrira
|
10. |
W. Edward Martucci
|
11. |
Adam Gazzaley
|
12. |
Robert Perez
|
13. |
Kenneth Ehlert
|
14. |
Christine Lemke
|
15. |
Anil Jina
|
16. |
Jacqueline Studer
|
17. |
Santosh Shanbhag
|
By:
|
|
|
Name:
|
||
Title:
|
||
Address for Notices:
|
||
With copies to:
|
Attention: |
James Ryans, Chief Financial Officer
|
Email: |
legal@socialcapital.com
|
Attention: |
Raaj S. Narayan
|
Email: |
rsnarayan@wlrk.com
|
Attention: |
Eddie Martucci, Chief Financial Officer
|
Email: |
martucci@akiliinteractive.com
|
Attention: |
Jacqueline Studer, General Counsel
|
Email: |
legal@akiliinteractive.com; jstuder@akiliinteractive.com
|
Attention: |
Arthur R. McGivern
|
Daniel J. Espinoza
|
Sarah Ashfaq
|
Email: |
amcgivern@goodwinlaw.com
|
despinoza@goodwinlaw.com
|
SAshfaq@goodwinlaw.com
|
Attention: |
Raaj S. Narayan
|
Email: |
rsnarayan@wlrk.com
|
SPONSORS:
|
||
SCS SPONSOR I LLC | ||
By: |
/s/ Chamath Palihapitiya
|
|
Name: Chamath Palihapitiya | ||
Title: Chief Executive Officer |
/s/ Chamath Palihapitiya
|
||
Name: | Chamath Palihapitiya | |
/s/ Kishan Mehta
|
||
Name: | Kishan Mehta | |
/s/ James Ryans
|
||
Name: | James Ryans | |
/s/ Vladimir Coric
|
||
Name: | Vladimir Coric | |
/s/ Senthil Sundaram
|
||
Name: | Senthil Sundaram |
ACQUIROR:
|
||
SOCIAL CAPITAL SUVRETTA HOLDINGS CORP. I | ||
By: |
/s/ Chamath Palihapitiya
|
|
Name: Chamath Palihapitiya | ||
Title: Chief Executive Officer |
COMPANY:
|
||
AKILI INTERACTIVE LABS, INC. | ||
By: |
/s/ W. Edward Martucci, Ph.D.
|
|
Name: W. Edward Martucci, Ph.D. | ||
Title: Chief Executive Officer |
Sponsor
|
Acquiror Common Shares
|
|||
SCS Sponsor I LLC
c/o Social Capital Suvretta Holdings Corp. I
2850 W. Horizon Ridge Parkway Suite 200, Henderson, NV 89052
|
6,860,000 |
(1)
|
||
Chamath Palihapitiya
c/o Social Capital Suvretta Holdings Corp. I
2850 W. Horizon Ridge Parkway Suite 200, Henderson, NV 89052
|
— |
(2)
|
||
Kishan Mehta
c/o Social Capital Suvretta Holdings Corp. I
2850 W. Horizon Ridge Parkway Suite 200, Henderson, NV 89052
|
— |
(2)
|
||
James Ryans
c/o Social Capital Suvretta Holdings Corp. I
2850 W. Horizon Ridge Parkway Suite 200, Henderson, NV 89052
|
— | |||
Vladimir Coric
c/o Social Capital Suvretta Holdings Corp. I
2850 W. Horizon Ridge Parkway Suite 200, Henderson, NV 89052
|
30,000 |
(3)
|
||
Senthil Sundaram
c/o Social Capital Suvretta Holdings Corp. I
2850 W. Horizon Ridge Parkway Suite 200, Henderson, NV 89052
|
30,000 |
(4)
|
(1) |
Includes 640,000 shares of Acquiror Class A Common Stock and 6,220,000 shares of Acquiror Class B Common Stock.
|
(2) |
Messrs. Palihapitiya and Mehta may be deemed to beneficially own securities held by SCS Sponsor I LLC by virtue of their shared control over SCS Sponsor I LLC. Each of Messrs. Palihapitiya and Mehta disclaims beneficial ownership of securities held by SCS Sponsor I LLC.
|
(3) |
Includes 30,000 shares of Acquiror Class B Common Stock.
|
(4) |
Includes 30,000 restricted stock units (“
RSUs
”), granted to Mr. Sundaram pursuant to a Director Restricted Stock Unit Award Agreement, dated as of September 24, 2021, between Acquiror and Mr. Sundaram, which grant is contingent on (i) the Acquiror’s consummation of an initial business combination and (ii) a shareholder approved equity plan. The RSUs will vest upon the consummation of such initial business combination and represent 30,000 Class A ordinary shares of Acquiror that will settle on a date determined in the sole discretion of the Acquiror that shall occur between the vesting date and March 15 of the year following the year in which vesting occurs.
|
1. |
Letter Agreement, dated as of June 29, 2021, among Acquiror, the Sponsor, Chamath Palihapitiya, Kishan Mehta, James Ryans, Shoney Katz and Vladimir Coric.
|
2. |
Registration Rights Agreement, dated as of June 29, 2021, among Acquiror, the Sponsor and Vladimir Coric.
|
3. |
Administrative Services Agreement, dated as of June 29, 2021, between Acquiror and Social + Capital Partnership, LLC.
|
4. |
Private Placement Shares Purchase Agreement, dated as of June 29, 2021, between Acquiror and the Sponsor.
|
5. |
Indemnity Agreement, dated as of June 29, 2021, between Acquiror and Chamath Palihapitiya.
|
6. |
Indemnity Agreement, dated as of June 29, 2021, between Acquiror and Kishan Mehta.
|
7. |
Indemnity Agreement, dated as of June 29, 2021, between Acquiror and James Ryans.
|
8. |
Indemnity Agreement, dated as of June 29, 2021, between Acquiror and Vladimir Coric.
|
9. |
Letter Agreement, dated as of September 24, 2021, between Acquiror and Senthil Sundaram.
|
10. |
Indemnity Agreement, dated as of September 24, 2021, between Acquiror and Senthil Sundaram.
|
11. |
Director Restricted Stock Unit Award Agreement, dated as of September 24, 2021, between Acquiror and Senthil Sundaram.
|
By: |
|
|
Name: | ||
Title: | ||
Address for Notices: | ||
With copies to: |
Name of Investor: | State/Country of Formation or Domicile: |
By: |
|
|
Name: |
|
|
Title: |
|
Name in which Shares are to be registered (if different): | ||
Investor’s EIN: | ||
Business Address-Street: | Mailing Address-Street (if different): | |
City, State, Zip: | City, State, Zip: | |
Attn:
|
Attn:
|
|
Telephone No.: | Telephone No.: | |
Facsimile No.: | Facsimile No.: | |
Email: | Email: | |
Number of Shares subscribed for: | ||
Aggregate Subscription Amount: $ | Price Per Share: $10.00 |
SOCIAL CAPITAL SUVRETTA HOLDINGS CORP. I | ||
By: |
|
|
Name: | ||
Title: |
A. |
QUALIFIED INSTITUTIONAL BUYER STATUS
|
☐ |
We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act).
|
B. |
ACCREDITED INVESTOR STATUS
|
1. |
☐ We are an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) and have marked and initialed the appropriate box on the following page indicating the provision under which we qualify as an “accredited investor.”
|
2. |
☐ We are not a natural person.
|
☐ |
Any bank, registered broker or dealer, insurance company, registered investment company, business development company, or small business investment company;
|
☐ |
Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000;
|
☐ |
Any employee benefit plan, within the meaning of the Employee Retirement Income Security Act of 1974, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5,000,000;
|
☐ |
Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;
|
☐ |
Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;
|
☐ |
Any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000. For purposes of calculating a natural person’s net worth: (a) the person’s primary residence shall not be included as an asset; (b) indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability;
|
☐ |
Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;
|
☐ |
Any trust with assets in excess of $5,000,000, not formed to acquire the securities offered, whose purchase is directed by a sophisticated person;
|
☐ |
Any entity in which all of the equity owners are accredited investors;
|
☐ |
Any natural person holding in good standing one or more professional certifications or designations or credentials from an accredited educational institution that the Securities and Exchange Commission has designated as qualifying an individual for accredited investor status;
|
☐ |
Any “family office,” as defined in rule
202(a)(11)(g)-1
under the Investment Advisers Act of 1940, as amended, with assets under management in excess of $5,000,000, not formed to acquire the securities offered, and whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment; or
|
☐ |
Any “family client,” as defined in rule
202(a)(11)(G)-1
under the Investment Advisers Act of 1940, as amended, of a family office meeting the requirements set forth above and whose prospective investment in the issuer is directed by such family office pursuant to the requirements set forth above.
|
COMPANY:
|
||
AKILI, INC.
|
||
By: |
|
|
Name:
|
||
Title:
|
HOLDER:
|
||
[NAME]
|
||
By: |
|
|
Name: | ||
Title: |
1. |
PureTech Health, LLC
|
2. |
TLS Beta Pte. Ltd.
|
3. |
Jazz Human Performance Technology Fund, L.P.
|
4. |
Jazz Human Performance Opportunity Fund, L.P.
|
5. |
Neuberger Berman Principal Strategies Prima Fund LP
|
6. |
Neuberger Berman Prima MLP Fund LP
|
7. |
Neuberger Berman PRIMA
Co-Invest
Fund VI LP
|
8. |
John Spinale
|
9. |
Bharatt Chowrira
|
10. |
W. Edward Martucci
|
11. |
Adam Gazzaley
|
12. |
Robert Perez
|
13. |
Kenneth Ehlert
|
14. |
Christine Lemke
|
15. |
Anil Jina
|
16. |
Jacqueline Studer
|
17. |
Santosh Shanbhag
|
18. |
Carl Gottlieb
|
1. |
SC Master Holdings, LLC
|
2. |
Averill Master Fund, Ltd.
|
Signature of Stockholder |
Print Name of Stockholder |
Its: |
Address:
|
|
, 20
|
||
AKILI, INC.
|
||
By:
|
|
|
Name:
|
||
Its:
|
COMPANY:
|
||
Akili, Inc.
|
||
By: |
|
|
Name: | ||
Title: |
HOLDER:
|
||
SCS Sponsor I LLC
|
||
By: |
|
|
Name: | Chamath Palihapitiya | |
Title: | Chief Executive Officer |
HOLDER:
|
Vladimir Coric
|
HOLDER:
|
Senthil Sundaram
|
HOLDER:
|
||
[NAME]
|
||
By: |
|
|
Name: | ||
Title: |
1. |
Vladimir Coric
|
2. |
Senthil Sundaram
|
1. |
Jazz Human Performance Opportunity Fund, L.P.
|
2. |
Jazz Human Performance Technology Fund, L.P.
|
3. |
Neuberger Berman Principal Strategies PRIMA
Co-Invest
Fund VI LP
|
4. |
PRIMA MLP Fund LP
|
5. |
Neuberger Berman Principal Strategies PRIMA Fund LP
|
6. |
PureTech Health, LLC
|
7. |
TLS Beta Pte. Ltd.
|
8. |
John Spinale
|
9. |
Bharatt Chowrira
|
10. |
W. Edward Martucci
|
11. |
Adam Gazzaley
|
12. |
Robert Perez
|
13. |
Kenneth Ehlert
|
14. |
Christine Lemke
|
15. |
Anil Jina
|
16. |
Jacqueline Studer
|
17. |
Santosh Shanbhag
|
1
|
Note to Draft:
as-converted
basis (excluding any shares reserved for issuance under equity-based plans of the Company, including this Plan and the Employee Stock Purchase Plan), 4% of such 15% shall be reserved for grants to the CEO and 2% of such 15% shall be reserved for grants for the Executive Team (excluding the CEO). Initial share reserve shall also include a number of shares underlying Earnout RSUs plus the number of shares needed to satisfy the obligations under the Director Restricted Stock Unit Agreement dated September 24, 2021.
|
1
|
Note to Draft:
as-converted
basis (excluding any shares reserved for issuance under the 2020 Stock Option and Incentive Plan and this Plan).
|
1 |
The name of the Company is
Social Capital Suvretta Holdings Corp. I.
|
2 |
The Registered Office of the Company shall be at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman,
KY1-1104,
Cayman Islands, or at such other place within the Cayman Islands as the Directors may decide.
|
3 |
The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the laws of the Cayman Islands.
|
4 |
The liability of each Member is limited to the amount unpaid on such Member’s shares.
|
5 |
The share capital of the Company is US$55,500 divided into 500,000,000 Class A ordinary shares of a par value of US$0.0001 each, 50,000,000 Class B ordinary shares of a par value of US$0.0001 each and 5,000,000 preference shares of a par value of US$0.0001 each.
|
6 |
The Company has power to register by way of continuation as a body corporate limited by shares under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.
|
7 |
Capitalised terms that are not defined in this Amended and Restated Memorandum of Association bear the respective meanings given to them in the Amended and Restated Articles of Association of the Company.
|
1
|
Interpretation
|
1.1 |
In the Articles Table A in the First Schedule to the Statute does not apply and, unless there is something in the subject or context inconsistent therewith:
|
“Affiliate”
|
in respect of a person, means any other person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such person, and (a) in the case of a natural person, shall include, without limitation, such person’s spouse, parents, children, siblings,
mother-in-law
father-in-law
sisters-in-law,
|
|
“Applicable Law”
|
means, with respect to any person, all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates, judgments, decisions, decrees or orders of any governmental authority applicable to such person. | |
“Articles”
|
means these amended and restated articles of association of the Company. | |
“Audit Committee”
|
means the audit committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. | |
“Auditor”
|
means the person for the time being performing the duties of auditor of the Company (if any). | |
“Business Combination”
|
means a merger, share exchange, asset acquisition, share purchase, reorganisation or similar business combination involving the Company, with one or more businesses or entities (each, a “
target business
|
“business day”
|
means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorised or obligated by law to close in New York City. | |
“Class A Share”
|
means a Class A ordinary share of a par value of US$0.0001 in the share capital of the Company. | |
“Class B Share”
|
means a Class B ordinary share of a par value of US$0.0001 in the share capital of the Company. | |
“Clearing House”
|
means a clearing house recognised by the laws of the jurisdiction in which the Shares (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such jurisdiction. | |
“Company”
|
means the above named company. | |
“Company’s Website”
|
means the website of the Company and/or its
web-address
or domain name (if any).
|
|
“Compensation Committee”
|
means the compensation committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. | |
“Designated Stock Exchange”
|
means any United States national securities exchange on which the securities of the Company are listed for trading, including The Nasdaq Capital Market. | |
“Directors”
|
means each of the members of the board of directors of the Company. | |
“Dividend”
|
means any dividend (whether interim or final) resolved to be paid on Shares pursuant to the Articles. | |
“Electronic Communication”
|
means a communication sent by electronic means, including electronic posting to the Company’s Website, transmission to any number, address or internet website (including the website of the Securities and Exchange Commission) or other electronic delivery methods as otherwise decided and approved by the Directors. | |
“Electronic Record”
|
has the same meaning as in the Electronic Transactions Act. | |
“Electronic Transactions Act”
|
means the Electronic Transactions Act (As Revised) of the Cayman Islands. | |
“Equity-linked Securities”
|
means any debt or equity securities that are convertible, exercisable or exchangeable for Class A Shares issued in a financing transaction in connection with a Business Combination, including but not limited to a private placement of equity or debt. | |
“Exchange Act”
|
means the United States Securities Exchange Act of 1934, as amended, or any similar U.S. federal statute and the rules and regulations of the Securities and Exchange Commission thereunder, all as the same shall be in effect at the time. | |
“Independent Director”
|
has the same meaning as in the rules and regulations of the Designated Stock Exchange or in Rule
10A-3
under the Exchange Act, as the case may be.
|
|
“IPO”
|
means the Company’s initial public offering of securities. | |
“Member”
|
has the same meaning as in the Statute. | |
“Memorandum”
|
means the amended and restated memorandum of association of the Company. |
“Nominating and Corporate Governance Committee”
|
means the nominating and corporate governance committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. | |
“Officer”
|
means a person appointed to hold an office in the Company, which Officers may consist of a chairman, a chief executive officer, a president, a chief operating officer, a chief financial officer, a director of research, vice presidents, a secretary, assistant secretaries, a treasurer and such other offices as may be determined by the board of directors of the Company. | |
“Ordinary Resolution”
|
means a resolution passed by a simple majority of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and includes a unanimous written resolution. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles. | |
“Over-Allotment Option”
|
means the option of the Underwriter(s) to purchase up to an additional 15 per cent of the Class A Shares issued in the IPO at a price equal to US$10.00 per share, less any applicable commission or discount. | |
“Preference Share”
|
means a preference share of a par value of US$0.0001 in the share capital of the Company. | |
“Private Placement Shares”
|
means the Class A Shares issued to the Sponsor in a private placement to occur concurrently with the closing of the IPO. | |
“Public Share”
|
means a Class A Share issued in the IPO. | |
“Redemption Notice”
|
means a notice in a form approved by the Company by which a holder of Public Shares is entitled to require the Company to redeem its Public Shares, subject to any conditions contained therein. | |
“Register of Members”
|
means the register of Members maintained in accordance with the Statute and includes (except where otherwise stated) any branch or duplicate register of Members. | |
“Registered Office”
|
means the registered office for the time being of the Company. | |
“Seal”
|
means the common seal of the Company and includes every duplicate seal. | |
“Securities and Exchange Commission”
|
means the United States Securities and Exchange Commission. | |
“Share”
|
means a Class A Share, a Class B Share, or a Preference Share and includes a fraction of a share in the Company. | |
“Special Resolution”
|
subject to Article 29.4, has the same meaning as in the Statute, and includes a unanimous written resolution. | |
“Sponsor”
|
means SCS Sponsor I LLC, a Cayman Islands limited liability company, and its successors or assigns. | |
“Statute”
|
means the Companies Act (As Revised) of the Cayman Islands. | |
“Tax Filing Authorised Person”
|
means such person as any Director shall designate from time to time, acting severally. | |
“Treasury Share”
|
means a Share held in the name of the Company as a treasury share in accordance with the Statute. |
“Trust Account”
|
means the trust account established by the Company upon the consummation of the IPO and into which a certain amount of the net proceeds of the IPO, together with a certain amount of the proceeds of the sale of the Private Placement Shares, will be deposited. | |
“Underwriter”
|
means an underwriter of the IPO from time to time and any successor underwriter. |
1.2 |
In the Articles:
|
(a) |
words importing the singular number include the plural number and vice versa;
|
(b) |
words importing the masculine gender include the feminine gender;
|
(c) |
words importing persons include corporations as well as any other legal or natural person;
|
(d) |
“written” and “in writing” include all modes of representing or reproducing words in visible form, including in the form of an Electronic Record;
|
(e) |
“shall” shall be construed as imperative and “may” shall be construed as permissive;
|
(f) |
references to provisions of any law or regulation shall be construed as references to those provisions as amended, modified,
re-enacted
or replaced;
|
(g) |
any phrase introduced by the terms “including”, “include”, “in particular” or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;
|
(h) |
the term “and/or” is used herein to mean both “and” as well as “or.” The use of “and/or” in certain contexts in no respects qualifies or modifies the use of the terms “and” or “or” in others. The term “or” shall not be interpreted to be exclusive and the term “and” shall not be interpreted to require the conjunctive (in each case, unless the context otherwise requires);
|
(i) |
headings are inserted for reference only and shall be ignored in construing the Articles;
|
(j) |
any requirements as to delivery under the Articles include delivery in the form of an Electronic Record;
|
(k) |
any requirements as to execution or signature under the Articles including the execution of the Articles themselves can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Act;
|
(l) |
sections 8 and 19(3) of the Electronic Transactions Act shall not apply;
|
(m) |
the term “clear days” in relation to the period of a notice means that period excluding the day when the notice is received or deemed to be received and the day for which it is given or on which it is to take effect; and
|
(n) |
the term “holder” in relation to a Share means a person whose name is entered in the Register of Members as the holder of such Share.
|
2
|
Commencement of Business
|
2.1 |
The business of the Company may be commenced as soon after incorporation of the Company as the Directors shall see fit.
|
2.2 |
The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred in or about the formation and establishment of the Company, including the expenses of registration.
|
3
|
Issue of Shares and other Securities
|
3.1 |
Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by the Company in general meeting) and, where applicable, the rules and regulations of the Designated Stock
|
Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, and without prejudice to any rights attached to any existing Shares, the Directors may allot, issue, grant options over or otherwise dispose of Shares (including fractions of a Share) with or without preferred, deferred or other rights or restrictions, whether in regard to Dividends or other distributions, voting, return of capital or otherwise and to such persons, at such times and on such other terms as they think proper, and may also (subject to the Statute and the Articles) vary such rights, save that the Directors shall not allot, issue, grant options over or otherwise dispose of Shares (including fractions of a Share) to the extent that it may affect the ability of the Company to carry out a Class B Share Conversion set out in the Articles. |
3.2 |
The Company may issue rights, options, warrants or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of Shares or other securities in the Company on such terms as the Directors may from time to time determine.
|
3.3 |
The Company may issue units of securities in the Company, which may be comprised of whole or fractional Shares, rights, options, warrants or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of Shares or other securities in the Company, upon such terms as the Directors may from time to time determine.
|
3.4 |
The Company shall not issue Shares to bearer.
|
4
|
Register of Members
|
4.1 |
The Company shall maintain or cause to be maintained the Register of Members in accordance with the Statute.
|
4.2 |
The Directors may determine that the Company shall maintain one or more branch registers of Members in accordance with the Statute. The Directors may also determine which register of Members shall constitute the principal register and which shall constitute the branch register or registers, and to vary such determination from time to time.
|
5
|
Closing Register of Members or Fixing Record Date
|
5.1 |
For the purpose of determining Members entitled to notice of, or to vote at any meeting of Members or any adjournment thereof, or Members entitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for any other purpose, the Directors may provide that the Register of Members shall be closed for transfers for a stated period which shall not in any case exceed 40 days.
|
5.2 |
In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or arrears a date as the record date for any such determination of Members entitled to notice of, or to vote at any meeting of the Members or any adjournment thereof, or for the purpose of determining the Members entitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for any other purpose.
|
5.3 |
If the Register of Members is not so closed and no record date is fixed for the determination of Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment of a Dividend or other distribution, the date on which notice of the meeting is sent or the date on which the resolution of the Directors resolving to pay such Dividend or other distribution is passed, as the case may be, shall be the record date for such determination of Members. When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination shall apply to any adjournment thereof.
|
6
|
Certificates for Shares
|
6.1 |
A Member shall only be entitled to a share certificate if the Directors resolve that share certificates shall be issued. Share certificates representing Shares, if any, shall be in such form as the Directors may determine.
|
Share certificates shall be signed by one or more Directors or other person authorised by the Directors. The Directors may authorise certificates to be issued with the authorised signature(s) affixed by mechanical process. All certificates for Shares shall be consecutively numbered or otherwise identified and shall specify the Shares to which they relate. All certificates surrendered to the Company for transfer shall be cancelled and, subject to the Articles, no new certificate shall be issued until the former certificate representing a like number of relevant Shares shall have been surrendered and cancelled. |
6.2 |
The Company shall not be bound to issue more than one certificate for Shares held jointly by more than one person and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them.
|
6.3 |
If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating evidence, as the Directors may prescribe, and (in the case of defacement or wearing out) upon delivery of the old certificate.
|
6.4 |
Every share certificate sent in accordance with the Articles will be sent at the risk of the Member or other person entitled to the certificate. The Company will not be responsible for any share certificate lost or delayed in the course of delivery.
|
6.5 |
Share certificates shall be issued within the relevant time limit as prescribed by the Statute, if applicable, or as the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law may from time to time determine, whichever is shorter, after the allotment or, except in the case of a Share transfer which the Company is for the time being entitled to refuse to register and does not register, after lodgement of a Share transfer with the Company.
|
7
|
Transfer of Shares
|
7.1 |
Subject to the terms of the Articles, any Member may transfer all or any of his Shares by an instrument of transfer provided that such transfer complies with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. If the Shares in question were issued in conjunction with rights, options, warrants or units issued pursuant to the Articles on terms that one cannot be transferred without the other, the Directors shall refuse to register the transfer of any such Share without evidence satisfactory to them of the like transfer of such right, option, warrant or unit.
|
7.2 |
The instrument of transfer of any Share shall be in writing in the usual or common form or in a form prescribed by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law or in any other form approved by the Directors and shall be executed by or on behalf of the transferor (and if the Directors so require, signed by or on behalf of the transferee) and may be under hand or, if the transferor or transferee is a Clearing House or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the Directors may approve from time to time. The transferor shall be deemed to remain the holder of a Share until the name of the transferee is entered in the Register of Members.
|
8
|
Redemption, Repurchase and Surrender of Shares
|
8.1 |
Subject to the provisions of the Statute, and, where applicable, the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, the Company may issue Shares that are to be redeemed or are liable to be redeemed at the option of the Member or the Company. The redemption of such Shares, except Public Shares, shall be effected in such manner and upon such other terms as the Company may, by Special Resolution, determine before the issue of such Shares. With respect to redeeming or repurchasing the Shares:
|
(a) |
Members who hold Public Shares are entitled to request the redemption of such Shares in the circumstances described in the Business Combination Article hereof;
|
(b) |
Class B Shares held by the Sponsor shall be surrendered by the Sponsor for no consideration on a
pro-rata
basis to the extent that the Over-Allotment Option is not exercised in full so that the Class B Shares in issue will equal 20 per cent of the Company’s issued Shares after the IPO (excluding the Private Placement Shares) or 25 per cent of the number of Public Shares issued in the IPO; and
|
(c) |
Public Shares shall be repurchased by the Company, by way of tender offer, in the circumstances set out in the Business Combination Article hereof.
|
8.2 |
Subject to the provisions of the Statute, and, where applicable, the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, the Company may purchase its own Shares (including any redeemable Shares) in such manner and on such other terms as the Directors may agree with the relevant Member. For the avoidance of doubt, redemptions, repurchases and surrenders of Shares in the circumstances described in this Article 8 shall not require further approval of the Members.
|
8.3 |
The Company may make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Statute, including out of capital.
|
8.4 |
The Directors may accept the surrender for no consideration of any fully paid Share.
|
9
|
Treasury Shares
|
9.1 |
The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share.
|
9.2 |
The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms as they think proper (including, without limitation, for nil consideration).
|
10
|
Variation of Rights of Shares
|
10.1 |
Subject to Article 3.1, if at any time the share capital of the Company is divided into different classes of Shares, all or any of the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may, whether or not the Company is being wound up, be varied without the consent of the holders of the issued Shares of that class where such variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise, any such variation shall be made only with the consent in writing of the holders of not less than two thirds of the issued Shares of that class (other than with respect to a waiver of the provisions of the Class B Share Conversion Article hereof, which as stated therein shall only require the consent in writing of the holders of a majority of the issued Shares of that class), or with the approval of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of the holders of the Shares of that class. For the avoidance of doubt, the Directors reserve the right, notwithstanding that any such variation may not have a material adverse effect, to obtain consent from the holders of Shares of the relevant class. To any such meeting all the provisions of the Articles relating to general meetings shall apply
mutatis mutandis
|
be one or more persons holding or representing by proxy at least one third of the issued Shares of the class and that any holder of Shares of the class present in person or by proxy may demand a poll. |
10.2 |
For the purposes of a separate class meeting, the Directors may treat two or more or all the classes of Shares as forming one class of Shares if the Directors consider that such class of Shares would be affected in the same way by the proposals under consideration, but in any other case shall treat them as separate classes of Shares.
|
10.3 |
The rights conferred upon the holders of the Shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied by the creation or issue of further Shares ranking pari passu therewith or Shares issued with preferred or other rights.
|
11
|
Commission on Sale of Shares
|
12
|
Non Recognition of Trusts
|
13
|
Lien on Shares
|
13.1 |
The Company shall have a first and paramount lien on all Shares (whether fully
paid-up
or not) registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with the Company (whether presently payable or not) by such Member or his estate, either alone or jointly with any other person, whether a Member or not, but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this Article. The registration of a transfer of any such Share shall operate as a waiver of the Company’s lien thereon. The Company’s lien on a Share shall also extend to any amount payable in respect of that Share.
|
13.2 |
The Company may sell, in such manner as the Directors think fit, any Shares on which the Company has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within 14 clear days after notice has been received or deemed to have been received by the holder of the Shares, or to the person entitled to it in consequence of the death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied with the Shares may be sold.
|
13.3 |
To give effect to any such sale the Directors may authorise any person to execute an instrument of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser or his nominee shall be registered as the holder of the Shares comprised in any such transfer, and he shall not be bound to see to the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of the Company’s power of sale under the Articles.
|
13.4 |
The net proceeds of such sale after payment of costs, shall be applied in payment of such part of the amount in respect of which the lien exists as is presently payable and any balance shall (subject to a like lien for sums not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the sale.
|
14
|
Call on Shares
|
14.1 |
Subject to the terms of the allotment and issue of any Shares, the Directors may make calls upon the Members in respect of any monies unpaid on their Shares (whether in respect of par value or premium), and each Member shall (subject to receiving at least 14 clear days’ notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on the Shares. A call may be revoked or postponed, in whole or in part, as the Directors may determine. A call may be required to be paid by instalments. A person upon whom a call is made shall remain liable for calls made upon him notwithstanding the subsequent transfer of the Shares in respect of which the call was made.
|
14.2 |
A call shall be deemed to have been made at the time when the resolution of the Directors authorising such call was passed.
|
14.3 |
The joint holders of a Share shall be jointly and severally liable to pay all calls in respect thereof.
|
14.4 |
If a call remains unpaid after it has become due and payable, the person from whom it is due shall pay interest on the amount unpaid from the day it became due and payable until it is paid at such rate as the Directors may determine (and in addition all expenses that have been incurred by the Company by reason of such
non-payment),
but the Directors may waive payment of the interest or expenses wholly or in part.
|
14.5 |
An amount payable in respect of a Share on issue or allotment or at any fixed date, whether on account of the par value of the Share or premium or otherwise, shall be deemed to be a call and if it is not paid all the provisions of the Articles shall apply as if that amount had become due and payable by virtue of a call.
|
14.6 |
The Directors may issue Shares with different terms as to the amount and times of payment of calls, or the interest to be paid.
|
14.7 |
The Directors may, if they think fit, receive an amount from any Member willing to advance all or any part of the monies uncalled and unpaid upon any Shares held by him, and may (until the amount would otherwise become payable) pay interest at such rate as may be agreed upon between the Directors and the Member paying such amount in advance.
|
14.8 |
No such amount paid in advance of calls shall entitle the Member paying such amount to any portion of a Dividend or other distribution payable in respect of any period prior to the date upon which such amount would, but for such payment, become payable.
|
15
|
Forfeiture of Shares
|
15.1 |
If a call or instalment of a call remains unpaid after it has become due and payable the Directors may give to the person from whom it is due not less than 14 clear days’ notice requiring payment of the amount unpaid together with any interest which may have accrued and any expenses incurred by the Company by reason of such
non-payment.
The notice shall specify where payment is to be made and shall state that if the notice is not complied with the Shares in respect of which the call was made will be liable to be forfeited.
|
15.2 |
If the notice is not complied with, any Share in respect of which it was given may, before the payment required by the notice has been made, be forfeited by a resolution of the Directors. Such forfeiture shall include all Dividends, other distributions or other monies payable in respect of the forfeited Share and not paid before the forfeiture.
|
15.3 |
A forfeited Share may be sold,
re-allotted
or otherwise disposed of on such terms and in such manner as the Directors think fit and at any time before a sale,
re-allotment
or disposition the forfeiture may be cancelled on such terms as the Directors think fit. Where for the purposes of its disposal a forfeited Share is to be transferred to any person the Directors may authorise some person to execute an instrument of transfer of the Share in favour of that person.
|
15.4 |
A person any of whose Shares have been forfeited shall cease to be a Member in respect of them and shall surrender to the Company for cancellation the certificate for the Shares forfeited and shall remain liable to
|
pay to the Company all monies which at the date of forfeiture were payable by him to the Company in respect of those Shares together with interest at such rate as the Directors may determine, but his liability shall cease if and when the Company shall have received payment in full of all monies due and payable by him in respect of those Shares. |
15.5 |
A certificate in writing under the hand of one Director or Officer that a Share has been forfeited on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the Share. The certificate shall (subject to the execution of an instrument of transfer) constitute a good title to the Share and the person to whom the Share is sold or otherwise disposed of shall not be bound to see to the application of the purchase money, if any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the Share.
|
15.6 |
The provisions of the Articles as to forfeiture shall apply in the case of
non-payment
of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the par value of the Share or by way of premium as if it had been payable by virtue of a call duly made and notified.
|
16
|
Transmission of Shares
|
16.1 |
If a Member dies, the survivor or survivors (where he was a joint holder), or his legal personal representatives (where he was a sole holder), shall be the only persons recognised by the Company as having any title to his Shares. The estate of a deceased Member is not thereby released from any liability in respect of any Share, for which he was a joint or sole holder.
|
16.2 |
Any person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may be required by the Directors, elect, by a notice in writing sent by him to the Company, either to become the holder of such Share or to have some person nominated by him registered as the holder of such Share. If he elects to have another person registered as the holder of such Share he shall sign an instrument of transfer of that Share to that person. The Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before his death or bankruptcy or liquidation or dissolution, as the case may be.
|
16.3 |
A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or dissolution of a Member (or in any other case than by transfer) shall be entitled to the same Dividends, other distributions and other advantages to which he would be entitled if he were the holder of such Share. However, he shall not, before becoming a Member in respect of a Share, be entitled in respect of it to exercise any right conferred by membership in relation to general meetings of the Company and the Directors may at any time give notice requiring any such person to elect either to be registered himself or to have some person nominated by him be registered as the holder of the Share (but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before his death or bankruptcy or liquidation or dissolution or any other case than by transfer, as the case may be). If the notice is not complied with within 90 days of being received or deemed to be received (as determined pursuant to the Articles), the Directors may thereafter withhold payment of all Dividends, other distributions, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with.
|
17
|
Class B Share Conversion
|
17.1 |
The rights attaching to the Class A Shares and Class B Shares shall rank
pari passu
|
17.2 |
Class B Shares shall automatically convert into Class A Shares on a
one-for-one
Initial Conversion Ratio
|
17.3 |
Notwithstanding the Initial Conversion Ratio, in the case that additional (in excess of the amounts issued in the IPO) Class A Shares or any other Equity-linked Securities, are issued, or deemed issued in connection with a Business Combination, the ratio at which all Class B Shares in issue shall automatically convert into Class A Shares at the time of the consummation of a Business Combination will be adjusted (unless the holders of a majority of the Class B Shares in issue agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance pursuant to Article 17.4) so that the number of Class A Shares issuable upon conversion of all Class B Shares will equal, in the aggregate, 20 per cent of the total number of Class A Shares outstanding after such conversion (after giving effect to any redemptions of Public Shares pursuant to the Business Combination Article, and excluding the Private Placement Shares), including any Class A Shares issued or deemed issued, or issuable upon the conversion or exercise of any Equity-linked Securities or rights issued or deemed issued, by the Company in connection with a Business Combination, excluding (x) any Class A Shares or Equity-linked Securities exercisable for or convertible into Class A Shares issued, or to be issued, to any seller in a Business Combination and (y) any Shares issued to the Sponsor or its Affiliates upon conversion of working capital loans.
|
17.4 |
Notwithstanding anything to the contrary contained herein, the foregoing adjustment to the Initial Conversion Ratio may be waived as to any particular issuance or deemed issuance of additional Class A Shares or Equity-linked Securities by the written consent or agreement of holders of a majority of the Class B Shares then in issue consenting or agreeing separately as a separate class in the manner provided in the Variation of Rights of Shares Article hereof.
|
17.5 |
The foregoing conversion ratio shall also be adjusted to account for any subdivision (by share subdivision, exchange, capitalisation, rights issue, reclassification, recapitalisation or otherwise) or combination (by share consolidation, exchange, reclassification, recapitalisation or otherwise) or similar reclassification or recapitalisation of the Class A Shares in issue into a greater or lesser number of shares occurring after the original filing of the Articles without a proportionate and corresponding subdivision, combination or similar reclassification or recapitalisation of the Class B Shares in issue.
|
17.6 |
Each Class B Share shall convert into its pro rata number of Class A Shares pursuant to this Article. The pro rata share for each holder of Class B Shares will be determined as follows: each Class B Share shall convert into such number of Class A Shares as is equal to the product of one multiplied by a fraction, the numerator of which shall be the total number of Class A Shares into which all of the Class B Shares in issue shall be converted pursuant to this Article and the denominator of which shall be the total number of Class B Shares in issue at the time of conversion.
|
17.7 |
References in this Article to “
converted
conversion
exchange
|
17.8 |
Notwithstanding anything to the contrary in this Article, in no event may any Class B Share convert into Class A Shares at a ratio that is less than
one-for-one.
|
18
|
Amendments of Memorandum and Articles of Association and Alteration of Capital
|
18.1 |
The Company may by Ordinary Resolution:
|
(a) |
increase its share capital by such sum as the Ordinary Resolution shall prescribe and with such rights, priorities and privileges annexed thereto, as the Company in general meeting may determine;
|
(b) |
consolidate and divide all or any of its share capital into Shares of larger amount than its existing Shares;
|
(c) |
convert all or any of its
paid-up
Shares into stock, and reconvert that stock into
paid-up
Shares of any denomination;
|
(d) |
by subdivision of its existing Shares or any of them divide the whole or any part of its share capital into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value; and
|
(e) |
cancel any Shares that at the date of the passing of the Ordinary Resolution have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the Shares so cancelled.
|
18.2 |
All new Shares created in accordance with the provisions of this Article 18 shall be subject to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise as the Shares in the original share capital.
|
18.3 |
Subject to the provisions of the Statute, the provisions of the Articles as regards the matters to be dealt with by Ordinary Resolution and Article 29.4, the Company may by Special Resolution:
|
(a) |
change its name;
|
(b) |
alter or add to the Articles;
|
(c) |
alter or add to the Memorandum with respect to any objects, powers or other matters specified therein; and
|
(d) |
reduce its share capital or any capital redemption reserve fund.
|
19
|
Offices and Places of Business
|
20
|
General Meetings
|
20.1 |
All general meetings other than annual general meetings shall be called extraordinary general meetings.
|
20.2 |
The Company may, but shall not (unless required by the Statute) be obliged to, in each year hold a general meeting as its annual general meeting, and shall specify the meeting as such in the notices calling it. Any annual general meeting shall be held at such time and place as the Directors shall appoint. At these meetings the report of the Directors (if any) shall be presented.
|
20.3 |
The Directors, the chief executive officer or the chairman of the board of directors of the Company may call general meetings, and, for the avoidance of doubt, Members shall not have the ability to call general meetings.
|
20.4 |
Members seeking to bring business before the annual general meeting or to nominate candidates for appointment as Directors at the annual general meeting must deliver notice to the principal executive offices of the Company not less than 120 calendar days before the date of the Company’s proxy statement released to Members in connection with the previous year’s annual general meeting or, if the Company did not hold an annual general meeting the previous year, or if the date of the current year’s annual general meeting has been changed by more than 30 days from the date of the previous year’s annual general meeting, then the deadline shall be set by the board of directors of the Company with such deadline being a reasonable time before the Company begins to print and send its related proxy materials.
|
21
|
Notice of General Meetings
|
21.1 |
At least five clear days’ notice shall be given of any general meeting. Every notice shall specify the place, the day and the hour of the meeting and the general nature of the business to be conducted at the general
|
meeting and shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the provisions of the Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed: |
(a) |
in the case of an annual general meeting, by all of the Members entitled to attend and vote thereat; and
|
(b) |
in the case of an extraordinary general meeting, by a majority in number of the Members having a right to attend and vote at the meeting, together holding not less than 95 per cent in par value of the Shares giving that right.
|
21.2 |
The accidental omission to give notice of a general meeting to, or the
non-receipt
of notice of a general meeting by, any person entitled to receive such notice shall not invalidate the proceedings of that general meeting.
|
22
|
Proceedings at General Meetings
|
22.1 |
No business shall be transacted at any general meeting unless a quorum is present. The holders of a majority of the Shares being individuals present in person or by proxy or if a corporation or other
non-natural
person by its duly authorised representative or proxy shall be a quorum.
|
22.2 |
A person may participate at a general meeting by conference telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with each other. Participation by a person in a general meeting in this manner is treated as presence in person at that meeting.
|
22.3 |
A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by or on behalf of all of the Members for the time being entitled to receive notice of and to attend and vote at general meetings (or, being corporations or other
non-natural
persons, signed by their duly authorised representatives) shall be as valid and effective as if the resolution had been passed at a general meeting of the Company duly convened and held.
|
22.4 |
If a quorum is not present within half an hour from the time appointed for the meeting to commence, the meeting shall stand adjourned to the same day in the next week at the same time and/or place or to such other day, time and/or place as the Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting to commence, the Members present shall be a quorum.
|
22.5 |
The Directors may, at any time prior to the time appointed for the meeting to commence, appoint any person to act as chairman of a general meeting of the Company or, if the Directors do not make any such appointment, the chairman, if any, of the board of directors of the Company shall preside as chairman at such general meeting. If there is no such chairman, or if he shall not be present within fifteen minutes after the time appointed for the meeting to commence, or is unwilling to act, the Directors present shall elect one of their number to be chairman of the meeting.
|
22.6 |
If no Director is willing to act as chairman or if no Director is present within fifteen minutes after the time appointed for the meeting to commence, the Members present shall choose one of their number to be chairman of the meeting.
|
22.7 |
The chairman may, with the consent of a meeting at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.
|
22.8 |
When a general meeting is adjourned for 30 days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of an adjourned meeting.
|
22.9 |
If, prior to a Business Combination, a notice is issued in respect of a general meeting and the Directors, in their absolute discretion, consider that it is impractical or undesirable for any reason to hold that general meeting at the place, the day and the hour specified in the notice calling such general meeting, the Directors may postpone the general meeting to another place, day and/or hour provided that notice of the place, the day and the hour of the rearranged general meeting is promptly given to all Members. No business shall be transacted at any postponed meeting other than the business specified in the notice of the original meeting.
|
22.10 |
When a general meeting is postponed for 30 days or more, notice of the postponed meeting shall be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of a postponed meeting. All proxy forms submitted for the original general meeting shall remain valid for the postponed meeting. The Directors may postpone a general meeting which has already been postponed.
|
22.11 |
A resolution put to the vote of the meeting shall be decided on a poll.
|
22.12 |
A poll shall be taken as the chairman directs, and the result of the poll shall be deemed to be the resolution of the general meeting at which the poll was demanded.
|
22.13 |
A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such date, time and place as the chairman of the general meeting directs, and any business other than that upon which a poll has been demanded or is contingent thereon may proceed pending the taking of the poll.
|
22.14 |
In the case of an equality of votes the chairman shall be entitled to a second or casting vote.
|
23
|
Votes of Members
|
23.1 |
Subject to any rights or restrictions attached to any Shares, including as set forth in Article 29.4, every Member present in any such manner shall have one vote for every Share of which he is the holder.
|
23.2 |
In the case of joint holders the vote of the senior holder who tenders a vote, whether in person or by proxy (or, in the case of a corporation or other
non-natural
person, by its duly authorised representative or proxy), shall be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the names of the holders stand in the Register of Members.
|
23.3 |
A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction in lunacy, may vote by his committee, receiver, curator bonis, or other person on such Member’s behalf appointed by that court, and any such committee, receiver, curator bonis or other person may vote by proxy.
|
23.4 |
No person shall be entitled to vote at any general meeting unless he is registered as a Member on the record date for such meeting nor unless all calls or other monies then payable by him in respect of Shares have been paid.
|
23.5 |
No objection shall be raised as to the qualification of any voter except at the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall be valid. Any objection made in due time in accordance with this Article shall be referred to the chairman whose decision shall be final and conclusive.
|
23.6 |
Votes may be cast either personally or by proxy (or in the case of a corporation or other
non-natural
person by its duly authorised representative or proxy). A Member may appoint more than one proxy or the same proxy under one or more instruments to attend and vote at a meeting. Where a Member appoints more than one proxy the instrument of proxy shall specify the number of Shares in respect of which each proxy is entitled to exercise the related votes.
|
23.7 |
A Member holding more than one Share need not cast the votes in respect of his Shares in the same way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution
|
and/or abstain from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing him, a proxy appointed under one or more instruments may vote a Share or some or all of the Shares in respect of which he is appointed either for or against a resolution and/or abstain from voting a Share or some or all of the Shares in respect of which he is appointed. |
24
|
Proxies
|
24.1 |
The instrument appointing a proxy shall be in writing and shall be executed under the hand of the appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation or other
non-natural
person, under the hand of its duly authorised representative. A proxy need not be a Member.
|
24.2 |
The Directors may, in the notice convening any meeting or adjourned meeting, or in an instrument of proxy sent out by the Company, specify the manner by which the instrument appointing a proxy shall be deposited and the place and the time (being not later than the time appointed for the commencement of the meeting or adjourned meeting to which the proxy relates) at which the instrument appointing a proxy shall be deposited. In the absence of any such direction from the Directors in the notice convening any meeting or adjourned meeting or in an instrument of proxy sent out by the Company, the instrument appointing a proxy shall be deposited physically at the Registered Office not less than 48 hours before the time appointed for the meeting or adjourned meeting to commence at which the person named in the instrument proposes to vote.
|
24.3 |
The chairman may in any event at his discretion declare that an instrument of proxy shall be deemed to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted, or which has not been declared to have been duly deposited by the chairman, shall be invalid.
|
24.4 |
The instrument appointing a proxy may be in any usual or common form (or such other form as the Directors may approve) and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked. An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll.
|
24.5 |
Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation or transfer was received by the Company at the Registered Office before the commencement of the general meeting, or adjourned meeting at which it is sought to use the proxy.
|
25
|
Corporate Members
|
25.1 |
Any corporation or other
non-natural
person which is a Member may in accordance with its constitutional documents, or in the absence of such provision by resolution of its directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of Members, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise if it were an individual Member.
|
25.2 |
If a Clearing House (or its nominee(s)), being a corporation, is a Member, it may authorise such persons as it sees fit to act as its representative at any meeting of the Company or at any meeting of any class of Members provided that the authorisation shall specify the number and class of Shares in respect of which each such representative is so authorised. Each person so authorised under the provisions of this Article shall be deemed to have been duly authorised without further evidence of the facts and be entitled to exercise the same rights and powers on behalf of the Clearing House (or its nominee(s)) as if such person was the registered holder of such Shares held by the Clearing House (or its nominee(s)).
|
26
|
Shares that May Not be Voted
|
27
|
Directors
|
27.1 |
There shall be a board of directors of the Company consisting of not less than one person provided however that the Company may by Ordinary Resolution increase or reduce the limits in the number of Directors.
|
28
|
Powers of Directors
|
28.1 |
Subject to the provisions of the Statute, the Memorandum and the Articles and to any directions given by Special Resolution, the business of the Company shall be managed by the Directors who may exercise all the powers of the Company. No alteration of the Memorandum or Articles and no such direction shall invalidate any prior act of the Directors which would have been valid if that alteration had not been made or that direction had not been given. A duly convened meeting of Directors at which a quorum is present may exercise all powers exercisable by the Directors.
|
28.2 |
All cheques, promissory notes, drafts, bills of exchange and other negotiable or transferable instruments and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may be in such manner as the Directors shall determine by resolution.
|
28.3 |
The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any Director who has held any other salaried office or place of profit with the Company or to his widow or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.
|
28.4 |
The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital or any part thereof and to issue debentures, debenture stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of the Company or of any third party.
|
29
|
Appointment and Removal of Directors
|
29.1 |
Prior to the consummation of a Business Combination, the Company may by Ordinary Resolution of the holders of the Class B Shares appoint any person to be a Director or may by Ordinary Resolution of the holders of the Class B Shares remove any Director. For the avoidance of doubt, prior to the consummation of a Business Combination, holders of Class A Shares shall have no right to vote on the appointment or removal of any Director.
|
29.2 |
The Directors may appoint any person to be a Director, either to fill a vacancy or as an additional Director provided that the appointment does not cause the number of Directors to exceed any number fixed by or in accordance with the Articles as the maximum number of Directors.
|
29.3 |
After the consummation of a Business Combination, the Company may by Ordinary Resolution appoint any person to be a Director or may by Ordinary Resolution remove any Director.
|
29.4 |
Prior to the consummation of a Business Combination, Article 29.1 may only be amended by a Special Resolution passed by at least 90 per cent of such Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting of which notice specifying the intention to propose the resolution as a special resolution has been given, or by way of unanimous written resolution.
|
30
|
Vacation of Office of Director
|
(a) |
the Director gives notice in writing to the Company that he resigns the office of Director; or
|
(b) |
the Director absents himself (for the avoidance of doubt, without being represented by proxy) from three consecutive meetings of the board of directors of the Company without special leave of absence from the Directors, and the Directors pass a resolution that he has by reason of such absence vacated office; or
|
(c) |
the Director dies, becomes bankrupt or makes any arrangement or composition with his creditors generally; or
|
(d) |
the Director is found to be or becomes of unsound mind; or
|
(e) |
all of the other Directors (being not less than two in number) determine that he should be removed as a Director, either by a resolution passed by all of the other Directors at a meeting of the Directors duly convened and held in accordance with the Articles or by a resolution in writing signed by all of the other Directors.
|
31
|
Proceedings of Directors
|
31.1 |
The quorum for the transaction of the business of the Directors may be fixed by the Directors, and unless so fixed shall be a majority of the Directors then in office.
|
31.2 |
Subject to the provisions of the Articles, the Directors may regulate their proceedings as they think fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman shall have a second or casting vote.
|
31.3 |
A person may participate in a meeting of the Directors or any committee of Directors by conference telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with each other at the same time. Participation by a person in a meeting in this manner is treated as presence in person at that meeting. Unless otherwise determined by the Directors, the meeting shall be deemed to be held at the place where the chairman is located at the start of the meeting.
|
31.4 |
A resolution in writing (in one or more counterparts) signed by all the Directors or all the members of a committee of the Directors or, in the case of a resolution in writing relating to the removal of any Director or the vacation of office by any Director, all of the Directors other than the Director who is the subject of such resolution shall be as valid and effectual as if it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly convened and held.
|
31.5 |
A Director may, or other Officer on the direction of a Director shall, call a meeting of the Directors by at least two days’ notice in writing to every Director which notice shall set forth the general nature of the business to be considered unless notice is waived by all the Directors either at, before or after the meeting is held. To any such notice of a meeting of the Directors all the provisions of the Articles relating to the giving of notices by the Company to the Members shall apply
mutatis mutandis.
|
31.6 |
The continuing Directors (or a sole continuing Director, as the case may be) may act notwithstanding any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to the Articles as the necessary quorum of Directors the continuing Directors or Director may act for the purpose of increasing the number of Directors to be equal to such fixed number, or of summoning a general meeting of the Company, but for no other purpose.
|
31.7 |
The Directors may elect a chairman of their board and determine the period for which he is to hold office; but if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time appointed for the meeting to commence, the Directors present may choose one of their number to be chairman of the meeting.
|
31.8 |
All acts done by any meeting of the Directors or of a committee of the Directors shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment of any Director, and/or that they or any of them were disqualified, and/or had vacated their office and/or were not entitled to vote, be as valid as if every such person had been duly appointed and/or not disqualified to be a Director and/or had not vacated their office and/or had been entitled to vote, as the case may be.
|
31.9 |
A Director may be represented at any meetings of the board of directors of the Company by a proxy appointed in writing by him. The proxy shall count towards the quorum and the vote of the proxy shall for all purposes be deemed to be that of the appointing Director.
|
32
|
Presumption of Assent
|
33
|
Directors’ Interests
|
33.1 |
A Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the Directors may determine.
|
33.2 |
A Director may act by himself or by, through or on behalf of his firm in a professional capacity for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director.
|
33.3 |
A Director may be or become a director or other officer of or otherwise interested in any company promoted by the Company or in which the Company may be interested as a shareholder, a contracting party or otherwise, and no such Director shall be accountable to the Company for any remuneration or other benefits received by him as a director or officer of, or from his interest in, such other company.
|
33.4 |
No person shall be disqualified from the office of Director or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by or on behalf of the Company in which any Director shall be in any way interested be or be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by or arising in connection with any such contract or transaction by reason of such Director holding office or of the fiduciary relationship thereby established. A Director shall be at liberty to vote in respect of any contract or transaction in which he is interested provided that the nature of the interest of any Director in any such contract or transaction shall be disclosed by him at or prior to its consideration and any vote thereon.
|
33.5 |
A general notice that a Director is a shareholder, director, officer or employee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure for the purposes of voting on a resolution in respect of a contract or transaction in which he has an interest, and after such general notice it shall not be necessary to give special notice relating to any particular transaction.
|
34
|
Minutes
|
35
|
Delegation of Directors’ Powers
|
35.1 |
The Directors may delegate any of their powers, authorities and discretions, including the power to
sub-delegate,
to any committee consisting of one or more Directors (including, without limitation, the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee). Any such delegation may be made subject to any conditions the Directors may impose and either collaterally with or to the exclusion of their own powers and any such delegation may be revoked or altered by the Directors. Subject to any such conditions, the proceedings of a committee of Directors shall be governed by the Articles regulating the proceedings of Directors, so far as they are capable of applying.
|
35.2 |
The Directors may establish any committees, local boards or agencies or appoint any person to be a manager or agent for managing the affairs of the Company and may appoint any person to be a member of such committees, local boards or agencies. Any such appointment may be made subject to any conditions the Directors may impose, and either collaterally with or to the exclusion of their own powers and any such appointment may be revoked or altered by the Directors. Subject to any such conditions, the proceedings of any such committee, local board or agency shall be governed by the Articles regulating the proceedings of Directors, so far as they are capable of applying.
|
35.3 |
The Directors may adopt formal written charters for committees. Each of these committees shall be empowered to do all things necessary to exercise the rights of such committee set forth in the Articles and its charter and shall have such powers as the Directors may delegate pursuant to the Articles and as required by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. Each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee, if established, shall consist of such number of Directors as the Directors shall from time to time determine (or such minimum number as may be required from time to time by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law). For so long as any class of Shares is listed on the Designated Stock Exchange, the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee shall be made up of such number of Independent Directors as is required from time to time by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law.
|
35.4 |
The Directors may by power of attorney or otherwise appoint any person to be the agent of the Company on such conditions as the Directors may determine, provided that the delegation is not to the exclusion of their own powers and may be revoked by the Directors at any time.
|
35.5 |
The Directors may by power of attorney or otherwise appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or authorised signatory of the Company for such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under the Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other appointment may contain such provisions for the protection and convenience of persons dealing with any such attorneys or authorised signatories as the Directors may think fit and may also authorise any such attorney or authorised signatory to delegate all or any of the powers, authorities and discretions vested in him.
|
35.6 |
The Directors may appoint such Officers as they consider necessary on such terms, at such remuneration and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors may think fit. Unless otherwise specified in the terms of his appointment, an Officer may be removed by resolution of the Directors or Members. An Officer may vacate his office at any time if he gives notice in writing to the Company that he resigns his office.
|
36
|
No Minimum Shareholding
|
37
|
Remuneration of Directors
|
37.1 |
The remuneration to be paid to the Directors, if any, shall be such remuneration as the Directors shall determine, provided that no cash remuneration shall be paid to any Director by the Company prior to the consummation of a Business Combination. The Directors shall also, whether prior to or after the consummation of a Business Combination, be entitled to be paid all travelling, hotel and other expenses properly incurred by them in connection with their attendance at meetings of Directors or committees of Directors, or general meetings of the Company, or separate meetings of the holders of any class of Shares or debentures of the Company, or otherwise in connection with the business of the Company or the discharge of their duties as a Director, or to receive a fixed allowance in respect thereof as may be determined by the Directors, or a combination partly of one such method and partly the other.
|
37.2 |
The Directors may by resolution approve additional remuneration to any Director for any services which in the opinion of the Directors go beyond his ordinary routine work as a Director. Any fees paid to a Director who is also counsel, attorney or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his remuneration as a Director.
|
38
|
Seal
|
38.1 |
The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the authority of the Directors or of a committee of the Directors authorised by the Directors. Every instrument to which the Seal has been affixed shall be signed by at least one person who shall be either a Director or some Officer or other person appointed by the Directors for the purpose.
|
38.2 |
The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal or Seals each of which shall be a facsimile of the common Seal of the Company and, if the Directors so determine, with the addition on its face of the name of every place where it is to be used.
|
38.3 |
A Director or Officer, representative or attorney of the Company may without further authority of the Directors affix the Seal over his signature alone to any document of the Company required to be authenticated by him under seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever.
|
39
|
Dividends, Distributions and Reserve
|
39.1 |
Subject to the Statute and this Article and except as otherwise provided by the rights attached to any Shares, the Directors may resolve to pay Dividends and other distributions on Shares in issue and authorise payment of the Dividends or other distributions out of the funds of the Company lawfully available therefor. A Dividend shall be deemed to be an interim Dividend unless the terms of the resolution pursuant to which the Directors resolve to pay such Dividend specifically state that such Dividend shall be a final Dividend. No Dividend or other distribution shall be paid except out of the realised or unrealised profits of the Company, out of the share premium account or as otherwise permitted by law.
|
39.2 |
Except as otherwise provided by the rights attached to any Shares, all Dividends and other distributions shall be paid according to the par value of the Shares that a Member holds. If any Share is issued on terms providing that it shall rank for Dividend as from a particular date, that Share shall rank for Dividend accordingly.
|
39.3 |
The Directors may deduct from any Dividend or other distribution payable to any Member all sums of money (if any) then payable by him to the Company on account of calls or otherwise.
|
39.4 |
The Directors may resolve that any Dividend or other distribution be paid wholly or partly by the distribution of specific assets and in particular (but without limitation) by the distribution of shares, debentures, or securities of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional Shares and may fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the basis of the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees in such manner as may seem expedient to the Directors.
|
39.5 |
Except as otherwise provided by the rights attached to any Shares, Dividends and other distributions may be paid in any currency. The Directors may determine the basis of conversion for any currency conversions that may be required and how any costs involved are to be met.
|
39.6 |
The Directors may, before resolving to pay any Dividend or other distribution, set aside such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose of the Company and pending such application may, at the discretion of the Directors, be employed in the business of the Company.
|
39.7 |
Any Dividend, other distribution, interest or other monies payable in cash in respect of Shares may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of the holder or, in the case of joint holders, to the registered address of the holder who is first named on the Register of Members or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts for any Dividends, other distributions, bonuses, or other monies payable in respect of the Share held by them as joint holders.
|
39.8 |
No Dividend or other distribution shall bear interest against the Company.
|
39.9 |
Any Dividend or other distribution which cannot be paid to a Member and/or which remains unclaimed after six months from the date on which such Dividend or other distribution becomes payable may, in the discretion of the Directors, be paid into a separate account in the Company’s name, provided that the Company shall not be constituted as a trustee in respect of that account and the Dividend or other distribution shall remain as a debt due to the Member. Any Dividend or other distribution which remains unclaimed after a period of six years from the date on which such Dividend or other distribution becomes payable shall be forfeited and shall revert to the Company.
|
40
|
Capitalisation
|
41
|
Books of Account
|
41.1 |
The Directors shall cause proper books of account (including, where applicable, material underlying documentation including contracts and invoices) to be kept with respect to all sums of money received and expended by the Company and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and the assets and liabilities of the Company. Such books of account must be retained for a minimum period of five years from the date on which they are prepared. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the Company’s affairs and to explain its transactions.
|
41.2 |
The Directors shall determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members not being Directors and no Member (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred by Statute or authorised by the Directors or by the Company in general meeting.
|
41.3 |
The Directors may cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law.
|
42
|
Audit
|
42.1 |
The Directors may appoint an Auditor of the Company who shall hold office on such terms as the Directors determine.
|
42.2 |
Without prejudice to the freedom of the Directors to establish any other committee, if the Shares (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, and if required by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, the Directors shall establish and maintain an Audit Committee as a committee of the Directors and shall adopt a formal written Audit Committee charter and review and assess the adequacy of the formal written charter on an annual basis. The composition and responsibilities of the Audit Committee shall comply with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law.
|
42.3 |
If the Shares (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, the Company shall conduct an appropriate review of all related party transactions on an ongoing basis and shall utilise the Audit Committee for the review and approval of potential conflicts of interest.
|
42.4 |
The remuneration of the Auditor shall be fixed by the Audit Committee (if one exists).
|
42.5 |
If the office of Auditor becomes vacant by resignation or death of the Auditor, or by his becoming incapable of acting by reason of illness or other disability at a time when his services are required, the Directors shall fill the vacancy and determine the remuneration of such Auditor.
|
42.6 |
Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and Officers such information and explanation as may be necessary for the performance of the duties of the Auditor.
|
42.7 |
Auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual general meeting following their appointment in the case of a company which is registered with the Registrar of Companies as an ordinary company, and at the next extraordinary general meeting following their appointment in the case of a company which is registered with the Registrar of Companies as an exempted company, and at any other time during their term of office, upon request of the Directors or any general meeting of the Members.
|
43
|
Notices
|
43.1 |
Notices shall be in writing and may be given by the Company to any Member either personally or by sending it by courier, post, cable, telex, fax or
e-mail
to him or to his address as shown in the Register of Members (or where the notice is given by
e-mail
by sending it to the
e-mail
address provided by such Member). Notice may also be served by Electronic Communication in accordance with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or by placing it on the Company’s Website.
|
43.2 |
Where a notice is sent by:
|
(a) |
courier; service of the notice shall be deemed to be effected by delivery of the notice to a courier company, and shall be deemed to have been received on the third day (not including Saturdays or Sundays or public holidays) following the day on which the notice was delivered to the courier;
|
(b) |
post; service of the notice shall be deemed to be effected by properly addressing, pre paying and posting a letter containing the notice, and shall be deemed to have been received on the fifth day (not including Saturdays or Sundays or public holidays in the Cayman Islands) following the day on which the notice was posted;
|
(c) |
cable, telex or fax; service of the notice shall be deemed to be effected by properly addressing and sending such notice and shall be deemed to have been received on the same day that it was transmitted;
|
(d) |
e-mail
or other Electronic Communication; service of the notice shall be deemed to be effected by transmitting the
e-mail
to the
e-mail
address provided by the intended recipient and shall be deemed to have been received on the same day that it was sent, and it shall not be necessary for the receipt of the
e-mail
to be acknowledged by the recipient; and
|
(e) |
placing it on the Company’s Website; service of the notice shall be deemed to have been effected one hour after the notice or document was placed on the Company’s Website.
|
43.3 |
A notice may be given by the Company to the person or persons which the Company has been advised are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as other notices which are required to be given under the Articles and shall be addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred.
|
43.4 |
Notice of every general meeting shall be given in any manner authorised by the Articles to every holder of Shares carrying an entitlement to receive such notice on the record date for such meeting except that in the case of joint holders the notice shall be sufficient if given to the joint holder first named in the Register of Members and every person upon whom the ownership of a Share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of a Member where the Member but for his death or bankruptcy would be entitled to receive notice of the meeting, and no other person shall be entitled to receive notices of general meetings.
|
44
|
Winding Up
|
44.1 |
If the Company shall be wound up, the liquidator shall apply the assets of the Company in satisfaction of creditors’ claims in such manner and order as such liquidator thinks fit. Subject to the rights attaching to any Shares, in a winding up:
|
(a) |
if the assets available for distribution amongst the Members shall be insufficient to repay the whole of the Company’s issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the par value of the Shares held by them; or
|
(b) |
if the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the Company’s issued share capital at the commencement of the winding up, the surplus shall be distributed amongst the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise.
|
44.2 |
If the Company shall be wound up the liquidator may, subject to the rights attaching to any Shares and with the approval of a Special Resolution of the Company and any other approval required by the Statute, divide amongst the Members in kind the whole or any part of the assets of the Company (whether such assets shall consist of property of the same kind or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like approval, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator, with the like approval, shall think fit, but so that no Member shall be compelled to accept any asset upon which there is a liability.
|
45
|
Indemnity and Insurance
|
45.1 |
Every Director and Officer (which for the avoidance of doubt, shall not include auditors of the Company), together with every former Director and former Officer (each an “
Indemnified Person
|
45.2 |
The Company shall advance to each Indemnified Person reasonable attorneys’ fees and other costs and expenses incurred in connection with the defence of any action, suit, proceeding or investigation involving such Indemnified Person for which indemnity will or could be sought. In connection with any advance of any expenses hereunder, the Indemnified Person shall execute an undertaking to repay the advanced amount to the Company if it shall be determined by final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification pursuant to this Article. If it shall be determined by a final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification with respect to such judgment, costs or expenses, then such party shall not be indemnified with respect to such judgment, costs or expenses and any advancement shall be returned to the Company (without interest) by the Indemnified Person.
|
45.3 |
The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of any Director or Officer against any liability which, by virtue of any rule of law, would otherwise attach to such person in respect of any negligence, default, breach of duty or breach of trust of which such person may be guilty in relation to the Company.
|
46
|
Financial Year
|
47
|
Transfer by Way of Continuation
|
48
|
Mergers and Consolidations
|
49
|
Business Combination
|
49.1 |
Notwithstanding any other provision of the Articles, this Article shall apply during the period commencing upon the adoption of the Articles and terminating upon the first to occur of the consummation of a Business Combination and the full distribution of the Trust Account pursuant to this Article. In the event of a conflict between this Article and any other Articles, the provisions of this Article shall prevail.
|
49.2 |
Prior to the consummation of a Business Combination, the Company shall either:
|
(a) |
submit such Business Combination to its Members for approval; or
|
(b) |
provide Members with the opportunity to have their Shares repurchased by means of a tender offer for a
per-share
repurchase price payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of such Business Combination, including interest earned on the Trust Account (which interest shall be net of taxes paid or payable, if any), divided by the number of then-issued Public Shares, provided that the Company shall not repurchase Public Shares in an amount that would cause the Company’s net tangible assets to be less than US$5,000,001 following such repurchases. Such obligation to repurchase Shares is subject to the completion of the proposed Business Combination to which it relates.
|
49.3 |
If the Company initiates any tender offer in accordance with Rule
13e-4
and Regulation 14E of the Exchange Act in connection with a proposed Business Combination, it shall file tender offer documents with the Securities and Exchange Commission prior to completing such Business Combination which contain substantially the same financial and other information about such Business Combination and the redemption rights as is required under Regulation 14A of the Exchange Act. If, alternatively, the Company holds a general meeting to approve a proposed Business Combination, the Company will conduct any redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, and not pursuant to the tender offer rules, and file proxy materials with the Securities and Exchange Commission.
|
49.4 |
At a general meeting called for the purposes of approving a Business Combination pursuant to this Article, in the event that such Business Combination is approved by Ordinary Resolution, the Company shall be authorised to consummate such Business Combination.
|
49.5 |
Any Member holding Public Shares who is not the Sponsor, Officer or Director may, at least two business days’ prior to any vote on a Business Combination, elect to have their Public Shares redeemed for cash, in accordance with any applicable requirements provided for in the related proxy materials (the “
IPO Redemption
|
whether he is voting for or against such proposed Business Combination, a
per-Share
redemption price payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the Trust Account (such interest shall be net of taxes payable) and not previously released to the Company to pay its taxes, divided by the number of then issued Public Shares (such redemption price being referred to herein as the “
Redemption Price
Redemption Limitation
|
49.6 |
A Member may not withdraw a Redemption Notice once submitted to the Company unless the Directors determine (in their sole discretion) to permit the withdrawal of such redemption request (which they may do in whole or in part).
|
49.7 |
In the event that the Company does not consummate a Business Combination within 24 months from the consummation of the IPO, or such later time as the Members may approve in accordance with the Articles, the Company shall:
|
(a) |
cease all operations except for the purpose of winding up;
|
(b) |
as promptly as reasonably possible but not more than 10 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 the Company (less taxes payable on such interest and excluding up to US$100,000 of interest to pay dissolution expenses), divided by the number of then Public Shares in issue, which redemption will completely extinguish public Members’ rights as Members (including the right to receive further liquidation distributions, if any); and
|
(c) |
as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining Members and the Directors, liquidate and dissolve,
|
49.8 |
In the event that any amendment is made to the Articles:
|
(a) |
to modify the substance or timing of the Company’s obligation to allow redemption in connection with a Business Combination or redeem 100 per cent of the Public Shares if the Company does not consummate a Business Combination within 24 months from the consummation of the IPO, or such later time as the Members may approve in accordance with the Articles; or
|
(b) |
with respect to any other material provisions relating to Members’ rights or
pre-Business
Combination activity,
|
49.9 |
A holder of Public Shares shall be entitled to receive distributions from the Trust Account only in the event of an IPO Redemption, a repurchase of Shares by means of a tender offer pursuant to this Article, or a distribution of the Trust Account pursuant to this Article. In no other circumstance shall a holder of Public Shares have any right or interest of any kind in the Trust Account.
|
49.10 |
After the issue of Public Shares, and prior to the consummation of a Business Combination, the Company shall not issue additional Shares or any other securities that would entitle the holders thereof to:
|
(a) |
receive funds from the Trust Account; or
|
(b) |
vote as a class with Public Shares on a Business Combination.
|
49.11 |
A Director may vote in respect of a Business Combination in which such Director has a conflict of interest with respect to the evaluation of such Business Combination. Such Director must disclose such interest or conflict to the other Directors.
|
49.12 |
As long as the securities of the Company are listed on The Nasdaq Capital Market, the Company must complete one or more Business Combinations having an aggregate fair market value of at least 80 per cent of the assets held in the Trust Account (net of any deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the Company’s signing a definitive agreement in connection with a Business Combination. A Business Combination must not be solely effectuated with another blank cheque company or a similar company with nominal operations.
|
49.13 |
The Company may enter into a Business Combination with a target business that is Affiliated with the Sponsor, a Director or an Officer. In the event the Company seeks to consummate a Business Combination with a target that is Affiliated with the Sponsor, a Director or an Officer, the Company, or a committee of Independent Directors, will obtain an opinion from an independent investment banking firm that is a member of the United States Financial Industry Regulatory Authority or another valuation or appraisal firm that regularly renders fairness opinions on the type of target business the Company is seeking to acquire that such a Business Combination is fair to the Company from a financial point of view.
|
49.14 |
A committee of Independent Directors shall approve any transaction or transactions between the Company and any of the following parties:
|
(a) |
any Member owning an interest in the voting power of the Company that gives such Member a significant influence over the Company; and
|
(b) |
any Director or Officer and any Affiliate of such Director or Officer.
|
50
|
Certain Tax Filings
|
51
|
Business Opportunities
|
51.1 |
To the fullest extent permitted by Applicable Law, no individual serving as a Director or an Officer (“
Management
|
51.2 |
Except as provided elsewhere in this Article, the Company hereby renounces any interest or expectancy of the Company in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for both the Company and Management, about which a Director and/or Officer who is also a member of Management acquires knowledge.
|
51.3 |
To the extent a court might hold that the conduct of any activity related to a corporate opportunity that is renounced in this Article is a breach of duty to the Company or its Members, the Company hereby waives, to the fullest extent permitted by Applicable Law, any and all claims and causes of action that the Company may have for such activities. To the fullest extent permitted by Applicable Law, the provisions of this Article apply equally to activities conducted in the future and that have been conducted in the past.
|
[PUBCO]
|
||
By: |
|
|
Name: | ||
Title: | Incorporator |
(a) |
Exhibits.
|
Exhibit
Number |
Description
|
|
2.1
+
|
Agreement and Plan of Merger, dated as of January 26, 2022, by and among the Registrant, Karibu Merger Sub, Inc., and Akili Interactive Labs, Inc. (included as Annex A to the proxy statement/prospectus). | |
2.2
*
|
Plan of Domestication dated as of , 2022. | |
3.1 | Amended and Restated Memorandum and Articles of Association of the Registrant (included as Annex H to the proxy statement/prospectus). | |
3.2 | Form of Certificate of Incorporation of Akili, Inc. to become effective upon Domestication (included as Annex I to the proxy statement/prospectus). | |
3.3 |
Form of
By-Laws
of Akili, Inc. to become effective upon Domestication (included as Annex J to the proxy statement/prospectus).
|
|
4.1 | Specimen Class A Ordinary Share Certificate of Social Capital Suvretta Holdings Corp. I (incorporated by reference to Exhibit 4.1 filed with the Form S-1 filed by the Registrant on June 2, 2021). | |
4.2
*
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Specimen Common Stock Certificate of Akili, Inc. | |
4.3
*
|
Form of Certificate of Corporate Domestication of Akili, Inc., to be filed with the Secretary of the State of Delaware. | |
5.1
*
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Opinion of Wachtell, Lipton, Rosen & Katz. |
10.1 | Sponsor Support Agreement, dated as of January 26, 2022, by and among SCS Sponsor I LLC, the Registrant, each director of the Registrant and Akili Interactive Labs, Inc. and the other parties thereto (included as Annex C to the proxy statement/prospectus). | |
10.2 | Stockholder Support Agreement, dated as of January 26, 2022, by and among the Registrant, Akili Interactive Labs, Inc. and the persons set forth on Schedule I thereto (included as Annex B to the proxy statement/prospectus). | |
10.3 | Form of Subscription Agreement, by and between the Registrant and the undersigned subscriber party thereto (included as Annex D to the proxy statement/prospectus). | |
10.4 | Form of Amended and Restated Registration Rights Agreement, by and among Akili, Inc., SCS Sponsor I LLC, certain stockholders of Akili Interactive Labs, Inc., as set forth on Schedule 1 thereto and the other parties thereto (included as Annex E to the proxy statement/prospectus). | |
10.5 |
Form of
Lock-Up
Agreement, by and among Akili, Inc., SCS Sponsor I LLC and certain Persons and stockholders of Akili Interactive Labs, Inc., as set forth on the schedules thereto (included as Annex F to the proxy statement/prospectus).
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10.6 | Letter Agreement, dated as of July 29, 2021, by and among the Registrant, SCS Sponsor I LLC and the Registrant’s officers and directors (incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K on July 2, 2021). | |
10.7 | Investment Management Trust Agreement, dated as of July 29, 2021, by and between the Registrant and Continental Stock Transfer & Trust Company, as trustee (incorporated by reference to Exhibit 10.2 filed with the Registrant’s Current Report on Form 8-K on July 2, 2021). | |
10.8 | Administrative Services Agreement, dated as of July 29, 2021, by and between the Registrant and Social + Capital Partnership, LLC (incorporated by reference to Exhibit 10.4 filed with the Registrant’s Current Report on Form 8-K on July 2, 2021). | |
10.9 | Private Placement Shares Purchase Agreement, dated as of June 29, 2021, between the Registrant and SCS Sponsor I LLC (incorporated by reference to Exhibit 10.5 filed with the Registrant’s Current Report on Form 8-K on July 2, 2021). | |
10.10 | Form of Indemnity Agreement, dated June 29, 2021, between the Registrant and each of its officers and directors (incorporated by reference to Exhibit 10.6 filed with the Registrant’s Current Report on Form 8-K on July 2, 2021). | |
10.11 | Director Restricted Stock Unit Award Agreement, dated September 24, 2021, between the Registrant and Mr. Sundaram (incorporated by reference to Exhibit 10.3(4) filed with the Registrant’s Current Report on Form 10-Q on November 15, 2021). | |
10.12 | Letter Agreement, dated September 24, 2021, between the Registrant and Mr. Sundaram (incorporated by reference to Exhibit 10.1(2) filed with the Registrant’s Current Report on Form 10-Q on November 15, 2021). | |
10.13* | Scientific Advisory Board and Chief Science Advisor Agreement, dated as of May 1, 2016, by and between Akili Interactive Labs, Inc. and Adam Gazzaley, as amended by Amendment No. 1 dated as of October 29, 2018. | |
10.14* | Corporate Bond, dated as of March 26, 2019, by and between Akili Interactive Labs, Inc. and Shionogi & Co., Ltd. | |
10.15* | Option and Collaboration Agreement, dated as of December 19, 2018, by and between Shionogi & Co., Ltd. and Akili Interactive Labs, Inc., as amended by Amendment No. 1 dated as of January 1, 2020, Amendment No. 2 dated as of May 1, 2020 and Amendment No. 3 dated as of November 15, 2021. |
10.16* | Exclusive License Agreement, dated as of October 18, 2013, by and between Akili Interactive Labs, Inc. and The Regents of the University of California, as amended by Amendment No. 1 dated as of May 17, 2018 and Amendment No. 2 dated as of February 25, 2019. | |
10.17* | Amended and Restated Loan and Security Agreement, dated as of May 25, 2021, by and among Silicon Valley Bank, SVB Innovation Credit Fund VIII, L.P. and Akili Interactive Labs, Inc. | |
10.18 | Akili Interactive Labs, Inc. Executive Severance Plan. | |
10.19 | Akili Interactive Labs, Inc. Amended and Restated 2011 Stock Incentive Plan and forms of agreements thereunder. | |
10.20 | Form of Akili Interactive Labs, Inc. 2022 Stock Option and Incentive Plan (included as Annex G to the proxy statement/prospectus) and forms of agreements thereunder. | |
10.21 | Form of Akili Interactive Labs, Inc. 2022 Employee Stock Purchase Plan (included as Annex H to the proxy statement/prospectus). | |
10.22* | Lease, dated as of November 23, 2015, by and between Paul Ferazzi, as Trustee of 125 Broad Street Realty Trust and Akili Interactive Labs, Inc. as amended by the 2017 Amendment of Lease, dated as of August 30, 2016, and the Second Amendment to Lease, dated as of September 9, 2018, by and between Akili Interactive Labs, Inc., and Broad125 Realty Partners. | |
10.23* | Lease, dated as of August 30, 2017 by and between Paul Ferazzi, as Trustee of 125 Broad Street Realty Trust and Akili Interactive Labs, Inc., as amended by the Amendment to Lease, dated as of September 9, 2018, between Akili Interactive Labs, Inc. and Broad125 Realty Partners, LLC and the Second Amendment to Lease, dated as of August 23, 2021, by and between Akili Interactive Labs, Inc. and Broad 125 Realty Partners, LLC. | |
10.24* | Lease, dated as of June 15, 2018, by and between Remillard Brick Kiln, LLC and Akili Interactive Labs, Inc., as amended on May 29, 2019. | |
21.1 | List of Subsidiaries of the Registrant. | |
23.1 | Consent of KPMG LLP. | |
23.2 | Consent of Marcum LLP. | |
23.3
*
|
Consent of Wachtell, Lipton, Rosen & Katz (included as part of Exhibit 5.1). | |
24.1 | Power of Attorney (included on the signature page of this Registration Statement). | |
99.1
*
|
Form of Proxy Card for Registrant’s Extraordinary General Meeting. | |
99.2 | Consent of Walter Edward Martucci, II to be named as a director. | |
101.INS | XBRL Instance Document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |
107 | Filing Fee Exhibit. |
* |
To be filed by amendment.
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+ |
Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation
S-K.
The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
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1. |
The undersigned Registrant hereby undertakes:
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2. |
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
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3. |
The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
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4. |
The registrant undertakes that every prospectus: (1) that is filed pursuant to the immediately preceding paragraph, or (2) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment will be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof.
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5. |
The undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form
S-4,
within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request.
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6. |
The undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective.
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SOCIAL CAPITAL SUVRETTA HOLDINGS CORP. I
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||
By: | /s/ Chamath Palihapitiya | |
Name: Chamath Palihapitiya | ||
Title: Chief Executive Officer |
Signature
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Title
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Date
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||
/s/ Chamath Palihapitiya
Chamath Palihapitiya
|
Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer) | February 14, 2022 | ||
/s/ Kishan Mehta
Kishan Mehta
|
President and Director | February 14, 2022 | ||
/s/ James Ryans
James Ryans
|
Chief Financial Officer
(Principal Financial and Accounting Officer) |
February 14, 2022 | ||
/s/ Vladimir Coric
Vladimir Coric
|
Director | February 14, 2022 | ||
/s/ Senthil Sundaram
Senthil Sundaram
|
Director | February 14, 2022 |
Exhibit 10.18
AKILI INTERACTIVE LABS, INC.
EXECUTIVE SEVERANCE PLAN
1. Introduction. This document serves as the Plan document for the Severance Benefits provided under the Akili Interactive Labs, Inc. Executive Severance Plan (the Plan). It contains information that will help Covered Employees understand their Severance Benefits. The Company encourages all Covered Employees to read through the Plan carefully. Note that initially capitalized words and phrases used throughout this document are generally defined in Section 5. If you have any questions regarding the Plan, contact Human Resources.
2. Establishment of Plan. Akili Interactive Labs, Inc. (the Company) hereby establishes the Plan for the purpose of providing Severance Benefits to the individuals and subject to the terms and conditions set forth in this Plan. The executives and officers of the Company, including any executives and officers of any subsidiary of the Company, covered by this Plan (each such executive or officer, a Covered Employee and collectively, the Covered Employees) will be those executives and officers holding the titles identified by the Administrator and set forth on Exhibit A attached hereto. The Plan is in effect for Covered Employees who experience a Covered Termination after the Effective Date. This Plan supersedes any and all (i) severance plans or separation policies or provisions applying to a Covered Employee that may have been in effect before the Effective Date and (ii) provisions of any agreement between a Covered Employee and the Company that provides for severance pay or benefits.
3. Purpose. The purpose of the Plan is to establish the conditions under which Covered Employees will receive the Severance Benefits (defined below) if employment with the Company (or its successor, following a Change in Control) terminates under the circumstances specified herein.
4. Coverage. A Covered Employee will be eligible to receive the Severance Benefits under the Plan if such Covered Employee experiences a Covered Termination. In order to receive the Severance Benefits under the Plan, Covered Employees must meet the eligibility requirements, including with respect to a Separation Agreement and Release (as defined below) and other requirements as provided herein.
5. Definitions. For purposes of this Plan:
A. Administrator shall mean the Board or a committee thereof designated by the Board.
B. Applicable Bonus Multiple shall mean, (i) 1.0x, in the case of the Companys Chief Executive Officer, (ii) 0.75x, in the case of a Covered Employee at the Senior Vice President level and (iii) 0.5x in the case of a Covered Employee at the Vice President level.
C. Applicable Severance Period shall mean, in the event of a Qualified Termination that occurs at any time other than the Change in Control Period, the period set forth in Table I and, in the event of a Qualified Termination that occurs within the Change in Control Period, the period set forth in Table II.
Akili Interactive Labs, Inc. Confidential & Proprietary
TABLE I
JOB TITLE OF COVERED EMPLOYEE |
SEVERANCE PERIOD |
|
Chief Executive Officer | Nine (9) months | |
Senior Vice President | Six (6) months | |
Vice President | Three (3) months |
TABLE II
JOB TITLE OF COVERED EMPLOYEE |
SEVERANCE PERIOD |
|
Chief Executive Officer | Twelve (12) months | |
Senior Vice President | Nine (9) months | |
Vice President | Six (6) months |
D. Base Salary shall mean, for any Covered Employee, such Covered Employees annualized base salary as in effect immediately before a Covered Termination (or base salary as in effect immediately prior to the Change in Control, if greater), exclusive of any bonuses, overtime pay, shift differentials, adders, any other form of premium pay, or other forms of compensation.
E. Board shall mean the Board of Directors of the Company.
F. Cause shall mean, as determined by the Board (excluding the Covered Employee, if such Covered Employee is then a member of the Board) based on the information then known to it, that one or more of the following has occurred: (i) the Covered Employees arrest for or conviction of a crime; or (ii) the Covered Employees material breach of any employment agreement or other obligation to the Company, including without limitation a breach by the Covered Employee of the Companys written employment policies; or (iii) the Covered Employees willful failure or refusal to accept, acknowledge or carry out the Companys lawful and reasonable written direction; or (iv) the Covered Employees conduct which is unlawful, fraudulent, dishonest, creates a conflict of interest with the Company, causes damage to the Company or interferes with the Companys business operations.
G. Change in Control shall mean: (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity; (ii) a merger, reorganization or consolidation pursuant to which the holders of the Companys outstanding voting power and outstanding stock immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding stock or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction; (iii) the sale of all of the outstanding stock of the Company to an unrelated person, entity or group thereof acting in concert; or (iv) any other transaction in which the owners of the Companys outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company.
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H. Change in Control Period shall mean the 12-month period immediately following the occurrence of the first event constituting a Change in Control of Parent.
I. Code shall mean the Internal Revenue Code of 1986, as amended.
J. Covered Termination shall mean a termination of the Covered Employees employment by the Company (or any successor thereto following a Change in Control) without Cause or by the Covered Employee for Good Reason. Notwithstanding the foregoing, a Covered Employees employment shall not be deemed to have been terminated solely as a result of the Covered Employee becoming an employee of any subsidiary of the Company or any direct or indirect successor to the business or assets of the Company, nor shall any intercompany transfer be deemed a termination of the employment relationship unless otherwise specified at the time of transfer.
K. Date of Termination shall mean the date that a Covered Employees employment with the Company (or any successor) ends.
L. Effective Date shall mean August 28, 2019.
M. Good Reason shall mean that the Covered Employee has complied with the Good Reason Process (hereinafter defined) following the occurrence of any of the following events after a Change in Control without the Covered Employees express consent: (i) a material diminution in the Covered Employees responsibilities, authority or duties ; (ii) a material diminution in the Covered Employees Base Salary except for across-the-board salary reductions based on the Companys financial performance similarly affecting all or substantially all senior management employees of the Company; (iii) a material change in the geographic location at which the Covered Employee provides services to the Company; or (iv) the material breach of this Agreement by the Company.
N. Good Reason Process shall mean that (i) the Covered Employee reasonably determines in good faith that a Good Reason condition has occurred; (ii) the Covered Employee notifies the Company in writing of the first occurrence of the Good Reason condition within 60 days of the first occurrence of such condition; (iii) the Covered Employee cooperates in good faith with the Companys efforts, for a period not more than 30 days following such notice (the Cure Period), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist after the Cure Period; and (v) the Covered Employee terminates his employment within 60 days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.
O. Proprietary Information means all information, whether or not in writing, concerning the Companys business, technology, business relationships or financial affairs that the Company has not released to the general public. All tangible embodiments of Proprietary Information are and will be the exclusive property of the Company. By way of illustration, Proprietary Information may include information or material that has not been made generally available to the public, such as: (a) corporate information, including plans, strategies, methods, policies, resolutions, negotiations or litigation; (b) marketing information, including
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strategies, methods, customer or business partner identities or other information about customers, business partners, prospect identities or other information about prospects, or market analyses or projections; (c) financial information, including cost and performance data, debt arrangements, equity structure, investors and holdings, purchasing and sales data and price lists; (d) operational, technological, and scientific information, including plans, specifications, manuals, forms, templates, software, pre-clinical and clinical testing data and strategies, research and development strategies, designs, methods, procedures, formulae, data, reports, discoveries, inventions, improvements, concepts, ideas, and other developments, know-how and trade secrets; and (e) personnel information, including personnel lists, reporting or organizational structure, resumes, personnel data, performance evaluations and termination arrangements or documents. Proprietary Information also includes information received in confidence by the Company from its customers, suppliers, business partners or other third parties.
P. Restrictive Covenants Agreement shall mean, as applicable to each Covered Employee, the Employee Confidentiality, Assignment and Noncompetition Agreement or the Employee Confidentiality, Assignment and Nonsolicitation Agreement between the Covered Employee and the Company, as either may be amended from time to time.
Q. Severance Benefits shall mean (i) the benefits set forth in Section 7 if the Covered Termination occurs outside the Change in Control Period, or (ii) the benefits set forth in Section 8 if the Covered Termination occurs within the Change in Control Period. In no event shall a Covered Employee be eligible for the benefits set forth in both Section 7 and Section 8.
R. Target Bonus shall mean for any Covered Employee, such Covered Employees target annual incentive compensation as in effect immediately before a Covered Termination (or the target annual incentive compensation as in effect immediately prior to the Change in Control, if greater).
6. Eligibility Requirements. Receipt of any Severance Benefits under the Plan requires that the Covered Employee: (1) comply with the provisions of any applicable confidentiality, noncompetition, nonsolicitation, and other continuing obligations to the Company, including without limitation, the terms of the Restrictive Covenants Agreement; and (2) execute and deliver a waiver and release agreement in a form provided by the Company under which the Covered Employee releases and discharges the Company and related persons and entities from and on account of any and all claims including without limitation any claims that relate to or arise out of the employment relationship between the Company and the Covered Employee (the Separation Agreement and Release). To be eligible for the receipt of Severance Benefits under the Plan, the Separation Agreement and Release must be executed by the Covered Employee and any applicable revocation period with respect thereto must lapse within the time frame set forth in the Separation Agreement and Release but in no event to exceed 60 days following the Covered Employees termination of employment.
Notwithstanding anything to the contrary in the definition of Covered Employee, Covered Termination or otherwise in this Plan, the following employees will not be eligible for Severance Benefits hereunder, except to the extent specifically determined otherwise by the Administrator: (1) an employee who is terminated for Cause; (2) an employee who retires,
4
terminates employment as a result of an inability to perform his or her duties due to physical or mental disability or dies (provided that, for the avoidance of doubt, an employee who dies or becomes disabled after incurring a Covered Termination shall remain eligible to continue to receive benefits hereunder); (3) an employee who terminates his or her employment for any reason other than for Good Reason within the Change in Control Period; and (4) an employee who is party to a written employment agreement with the Company that provides for severance benefits upon a termination by the Company or other contractual severance arrangement, in either event entered into after the Effective Date.
7. Severance Benefits Upon a Covered Termination Outside the Change in Control Period. If the Covered Employee has a Covered Termination outside the Change in Control Period, then, subject to the terms and conditions of the Plan, the Covered Employee shall be entitled to the following severance payments and benefits:
A. the Company shall pay the Covered Employee an amount equal to (i) the amount of the Covered Employees monthly Base Salary multiplied by the Applicable Severance Period (the Severance Amount), provided in the event the Covered Employee is entitled to any payments pursuant to the Restrictive Covenants Agreement, the Severance Amount received in any calendar year will be reduced by the amount the Covered Employee is paid in the same such calendar year pursuant to the Restrictive Covenants Agreement (the Restrictive Covenants Agreement Setoff); and
B. if the Covered Employee was participating in the Companys group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay the monthly employer COBRA premium for the same level of group health coverage as in effect for the Covered Employee on the Date of Termination until the earliest of the following: (i) the expiration of the Applicable Severance Period; (ii) the Covered Employees eligibility for group health coverage through other employment; or (iii) the end of the Covered Employees eligibility under COBRA for continuation coverage for health care. Notwithstanding the foregoing, if the Company determines at any time that its payments pursuant to this paragraph may be taxable income to the Covered Employee, it may convert such payments to payroll payments directly to the Covered Employee on the Companys regular payroll dates, which shall be subject to tax-related deductions and withholdings.
The amounts payable under this Section 7 shall be paid out in substantially equal installments in accordance with the Companys payroll practice over the Applicable Severance Period commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the Severance Amount shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).
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8. Severance Benefits Upon a Covered Termination Within the Change in Control Period. If the Covered Employee has a Covered Termination within the Change in Control Period, then, subject to the terms and conditions of the Plan, the Covered Employee shall be entitled to the following severance payments and benefits:
A. the Company shall pay the Covered Employee a lump sum in cash in an amount equal to the sum of (A) the amount of the Covered Employees monthly Base Salary (or the Covered Employees Base Salary in effect immediately prior to the Change in Control, if higher) multiplied by the Applicable Severance Period plus (B) the Applicable Bonus Multiple multiplied by the Covered Employees Target Bonus (the Change in Control Payment), provided the Change in Control Payment shall be reduced by the amount of the Restrictive Covenants Agreement Setoff, if applicable, paid or to be paid in the same calendar year; and
B. notwithstanding anything to the contrary in any applicable option agreement or other stock-based award agreement, all time-based stock options and other time-based stock-based awards held by the Covered Employee (the Equity Awards) shall immediately accelerate and become fully exercisable or nonforfeitable as of the later of (i) the Date of Termination or (ii) the Effective Date of the Separation Agreement and Release (the Accelerated Vesting Date); provided that any termination or forfeiture of the unvested portion of such Equity Awards that would otherwise occur on the Date of Termination in the absence of this Agreement will be delayed until the Effective Date of the Separation Agreement and Release and will only occur if the vesting pursuant to this subsection does not occur due to the absence of the Separation Agreement and Release becoming fully effective within the time period set forth therein. Notwithstanding the foregoing, no additional vesting of the Equity Awards shall occur during the period between the Covered Employees Date of Termination and the Accelerated Vesting Date; and
C. if the Covered Employee was participating in the Companys group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay the monthly employer COBRA premium for the same level of group health coverage as in effect for the Covered Employee on the Date of Termination until the earliest of the following: (i) the expiration of the Applicable Severance Period; (ii) the Covered Employees eligibility for group health coverage through other employment; or (iii) the end of the Covered Employees eligibility under COBRA for continuation coverage for health care. Notwithstanding the foregoing, if the Company determines at any time that its payments pursuant to this paragraph may be taxable income to the Covered Employee, it may convert such payments to payroll payments directly to the Covered Employee on the Companys regular payroll dates, which shall be subject to tax-related deductions and withholdings.
The amounts payable under this Section 8 shall be paid or commence to be paid within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payment shall be paid or commence to be paid in the second calendar year by the last day of such 60-day period.
9. Death. If a Covered Employee dies after the Date of Termination, but before all payments or benefits to which such Covered Employee is entitled pursuant to the Plan have been paid or provided, any remaining payments and benefits will be made to any beneficiary designated by the Covered Employee prior to or in connection with such Covered Employees Covered Termination or, if no such beneficiary has been designated, to the Covered Employees estate.
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10. Withholding. The Company may withhold from any payment or benefit under the Plan (a) any federal, state, or local income or payroll taxes required by law to be withheld with respect to such payment and (b) such other amounts as appropriately may be withheld under the Companys payroll policies and procedures from time to time in effect. Nothing in this Plan shall be construed to require the Company to make any payments to compensate the Covered Employee for any adverse tax effect associated with any payments or benefits or for any deduction or withholding from any payment or benefit.
11. Plan Administration.
A. Administrator. The Administrator shall be the Board or a committee thereof designated by the Board; provided, however, that the Administrator may in its sole discretion appoint a new Administrator to administer the Plan at any time.
B. Decisions, Powers and Duties. The general administration of the Plan and the responsibility for carrying out its provisions shall be vested in the Administrator. The Administrator shall have such powers and authority as are necessary to discharge such duties and responsibilities which also include, but are not limited to, interpretation and construction of the Plan, the determination of all questions of fact, including, without limitation, eligibility, participation and benefits, the resolution of any ambiguities and all other related or incidental matters, and such duties and powers of the Plan administration which are not assumed from time to time by any other appropriate entity, individual or institution. The Administrator may adopt rules and regulations of uniform applicability in its interpretation and implementation of the Plan.
The Administrator shall discharge its duties and responsibilities and exercise its powers and authority in its sole discretion and in accordance with the terms of the controlling legal documents and applicable law, and its actions and decisions shall be binding on any employee, and employees spouse or other dependent or beneficiary and any other interested parties whether or not in being or under a disability. Not in limitation, but in amplification of the foregoing, the Administrator shall have the power and authority in its discretion to:
(i) construe the Plan to determine all questions that shall arise as to interpretations of the Plans provisions;
(ii) determine which individuals are and are not Covered Employees, determine the benefits to which any Covered Employees may be entitled, the eligibility requirements for participation in the Plan and all other matters pertaining to the Plan;
(iii) adopt amendments to the Plan which are deemed necessary or desirable to comply with all applicable laws and regulations, including but not limited to Section 409A of the Code and the guidance thereunder;
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(iv) make all determinations it deems advisable for the administration of the Plan, including the authority and ability to delegate administrative functions to a third party;
(v) decide all disputes arising in connection with the Plan; and
(vi) otherwise supervise the administration of the Plan.
All decisions and interpretations of the Administrator shall be conclusive and binding on all persons, including the Company and Covered Employees.
12. Section 409A.
A. Anything in this Plan to the contrary notwithstanding, if at the time of the Covered Employees separation from service within the meaning of Section 409A of the Code, the Company determines that the Covered Employee is a specified employee within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Covered Employee becomes entitled to under this Plan would be considered deferred compensation subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after the Covered Employees separation from service, or (B) the Covered Employees death.
B. It is intended that this Plan will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Plan is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code.
C. To the extent that any payment or benefit described in this Plan constitutes non-qualified deferred compensation under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Covered Employees termination of employment, then such payments or benefits shall be payable only upon the Covered Employees separation from service. The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).
D. The Company makes no representation or warranty and shall have no liability to the Covered Employee or any other person if any provisions of this Plan are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.
13. Indemnification. To the extent permitted by law, all employees, officers, directors, agents and representatives of the Company shall be indemnified by the Company and held harmless against any claims and the expenses of defending against such claims, resulting from any action or conduct relating to the administration of the Plan, whether as a member of the Administrator or otherwise, except to the extent that such claims arise from gross negligence, willful neglect, or willful misconduct.
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14. Plan Not an Employment Contract. The Plan is not a contract between the Company and any employee, nor is it a condition of employment of any employee. Nothing contained in the Plan gives, or is intended to give, any employee the right to be retained in the service of the Company, or to interfere with the right of the Company to discharge or terminate the employment of any employee at any time and for any reason. No employee shall have the right or claim to benefits beyond those expressly provided in this Plan, if any. All rights and claims are limited as set forth in the Plan.
15. Severability. In case any one or more of the provisions of this Plan (or part thereof) shall be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions hereof, and this Plan shall be construed as if such invalid, illegal or unenforceable provisions (or part thereof) never had been contained herein.
16. Unfunded Plan. This Plan shall be unfunded and shall not create (or be construed to create) a trust or separate fund. Likewise, the Plan shall not establish any fiduciary relationship between the Company or any of its subsidiaries or affiliates and any Covered Employee.
17. Relief. If a Covered Employee violates the provisions of the Restrictive Covenants Agreement, (i) the Covered Employee will not be eligible for Severance Benefits, and (ii) to the extent any Severance Benefits have already been provided to the Covered Employee pursuant to this Plan, the Company shall have the right to terminate the Severance Benefits and demand immediate repayment of any amounts of the Severance Benefits previously paid to the Covered Employee or for the Covered Employees benefit under the Separation Agreement and Release. Any such actions in the event of a violation by the Covered Employee will not affect the Covered Employees applicable continuing obligations to the Company pursuant to the Restrictive Covenants Agreement, the Separation Agreement and Release or otherwise.
18. Non-Assignability by Covered Employee; Assignability by Company. No right or interest of any Covered Employee in the Plan shall be assignable or transferable in whole or in part either directly or by operation of law or otherwise, including, but not limited to, execution, levy, garnishment, attachment, pledge or bankruptcy. The Company may assign or otherwise transfer this Plan to any other person or entity without any Covered Employees consent.
19. Integration With Other Pay or Benefits Requirements. The Severance Benefits provided for in the Plan are the maximum benefits that the Company will pay to Covered Employees on a Covered Termination. To the extent that the Company owes any amounts in the nature of severance benefits to any Covered Employee under any other program, policy or plan of the Company that is not otherwise superseded by this Plan, or to the extent that any federal, state or local law, including, without limitation, so-called plant closing laws, requires the Company to give advance notice or make a payment of any kind to an employee because of that Covered Employees involuntary termination due to a layoff, reduction in force, plant or facility closing, sale of business, or similar event, the benefits provided under this Plan or the other arrangement shall either be reduced or eliminated to avoid any duplication of payment. The Company intends for the benefits provided under this Plan to partially or fully satisfy any and all statutory obligations that may arise out of a Covered Employees involuntary termination for the foregoing reasons and the Company shall so construe and implement the terms of the Plan.
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20. Amendment or Termination. The Board may amend, modify, or terminate the Plan at any time in its sole discretion; provided, however, that any such amendment, modification or termination that may adversely affect the rights of any Covered Employee shall not be made without the consent of such person.
21. Governing Law. The Plan and the rights of all persons hereunder shall be construed in accordance with and under applicable provisions of the Commonwealth of Massachusetts (without regard to conflict of laws provisions). This Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.
22. Obligations of Successors. In addition to any obligations imposed by law upon any successor to the Company, any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company shall expressly assume and agree to perform this Plan in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
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EXHIBIT A TO AKILI INTERACTIVE LABS, INC.
EXECUTIVE SEVERANCE PLAN
Chief Executive Officer
Senior Vice President
Vice President
Exhibit 10.19
AKILI INTERACTIVE LABS, INC.
AMENDED AND RESTATED 2011 STOCK INCENTIVE PLAN
1. Purpose
The purpose of this Amended and Restated 2011 Stock Incentive Plan (the Plan) of Akili Interactive Labs, Inc., a Delaware corporation (the Company), is to advance the interests of the Companys stockholders by enhancing the Companys ability to attract, retain and motivate persons who are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities and performance-based incentives to better align the interests of such persons with those of the Companys stockholders. Except where the context otherwise requires, the term Company shall include any of the Companys present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the Code) and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Board of Directors of the Company (the Board).
2. Eligibility
All of the Companys employees, officers, directors, consultants and advisors who are selected from time to time by the Board and who meet the requirements of Rule 701(c) of the Securities Act of 1933, as amended, are eligible to be granted non-qualified stock options, incentive stock options restricted stock, restricted stock units and other stock-based awards (each, an Award) under the Plan. Each person who receives an Award under the Plan is deemed a Participant.
3. Administration and Delegation
(a) Administration by Board of Directors. The Plan will be administered by the Board. The Board shall have authority to select individuals to whom Awards may from time to time be granted, to grant Awards and determine and, subject to the provisions of the Plan, to modify from time to time the terms and conditions, including restrictions, not inconsistent with the Plan, of any Award, which terms and conditions may differ among individual Awards and Participants, and to approve the form of written instruments evidencing the Awards. The Board may adopt, amend and repeal such administrative rules, guidelines and practices for the administration of the Plan and for its own acts and proceedings as it shall deem advisable. The Board may construe and interpret the terms of the Plan and any Award agreements entered into under the Plan. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be the sole and final judge of such expediency. All decisions by the Board shall be made in the Boards sole discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Award. No director or person acting pursuant to the authority delegated by the Board shall be liable for any action or determination relating to or under the Plan made in good faith.
(b) Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a Committee). All references in the Plan to the Board shall mean the Board or a Committee of the Board or the officers referred to in Section 3(c) to the extent that the Boards powers or authority under the Plan have been delegated to such Committee or officers.
(c) Delegation to Officers. To the extent permitted by applicable law, the Board may delegate to one or more officers of the Company the power to grant Awards (subject to any limitations under the Plan) to employees or officers of the Company or any of its present or future subsidiary corporations and to exercise such other powers under the Plan as the Board may determine, provided that the Board shall fix the terms of the Awards to be granted by such officers (including the exercise price of such Awards, which may include a formula by which the exercise price will be determined) and the maximum number of shares subject to Awards that the officers may grant; provided further, however, that no officer shall be authorized to grant Awards to any executive officer of the Company (as defined by Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the Exchange Act)) or to any officer of the Company (as defined by Rule 16a-1 under the Exchange Act).
4. Stock Available for Awards.
(a) Number of Shares. Subject to adjustment under Section 8, Awards may be made under the Plan for up to 11,737,602 shares of common stock, $0.0001 par value per share, of the Company (the Common Stock). If any Award expires or is terminated, surrendered or canceled without having been fully exercised, is forfeited in whole or in part (including as the result of shares of Common Stock subject to such Award being repurchased by the Company at the original issuance price pursuant to a contractual repurchase right), or results in any Common Stock not being issued, the unused shares of Common Stock covered by such Award shall again be available for the grant of Awards under the Plan. Further, shares of Common Stock tendered to the Company by a Participant to exercise an Award shall be added to the number of shares of Common Stock available for the grant of Awards under the Plan. However, in the case of Incentive Stock Options (as hereinafter defined), the foregoing provisions shall be subject to any limitations under the Code. Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.
(b) Substitute Awards. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Awards in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof. Substitute Awards may be granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Awards contained in the Plan. Substitute Awards shall not count against the overall share limit set forth in Section 4(a), except as may be required by reason of Section 422 and related provisions of the Code.
5. Stock Options
(a) General. The Board may grant options to purchase Common Stock (each, an Option) and determine the number of shares of Common Stock to be covered by each Option,
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the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option, including conditions relating to applicable laws, including federal or state securities laws, as it considers necessary or advisable. An Option that is not intended to be an Incentive Stock Option shall be designated a Nonstatutory Stock Option.
(b) Incentive Stock Options. An Option that the Board intends to be an incentive stock option as defined in Section 422 of the Code (an Incentive Stock Option) shall only be granted to employees of the Company, any of the Companys present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Code, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code, and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code. The Company shall have no liability to a Participant, or any other party, if an Option (or any part thereof) that is intended to be an Incentive Stock Option is not an Incentive Stock Option or for any action taken by the Board, including without limitation the conversion of an Incentive Stock Option to a Nonstatutory Stock Option. To the extent required for incentive stock option treatment under Section 422 of the Code, the aggregate Fair Market Value (as defined below and determined as of the time of grant) of the shares of Common Stock with respect to which Incentive Stock Options granted under the Plan and any other plan of the Company or its parent and any subsidiary that become exercisable for the first time by a Participant during any calendar year shall not exceed $100,000 or such other limit as may be in effect from time to time under Section 422 of the Code. To the extent that any Stock Option exceeds this limit, it shall constitute a Nonstatutory Stock Option.
(c) Exercise Price. The Board shall establish the exercise price of each Option and specify the exercise price in the applicable option agreement. The exercise price shall be not less than 100% of the Fair Market Value (as defined below) on the date the Option is granted. In the case of an Incentive Stock Option that is granted to an employee who owns or is deemed to own more than 10% of the combined voting power of all classes of stock of the Company or any of its parent or subsidiaries (a Ten Percent Owner), the exercise price of such Incentive Stock Option shall be not less than 110% of the Fair Market Value on the date the Incentive Stock Option is granted.
(d) Duration of Options. Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement, but no Stock Option shall be exercisable more than ten years after the date the Option is granted. In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the term of such Option shall be no more than five years.
(e) Exercise of Options. Options may be exercised by delivery to the Company of a written notice of exercise signed by the proper person or by any other form of notice (including electronic notice) approved by the Board together with payment in full as specified in Section 5(f) for the number of shares for which the Option is exercised. Shares of Common Stock subject to the Option will be delivered by the Company as soon as practicable following exercise.
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(f) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for as follows:
(1) in cash, by certified or bank check, by wire transfer of immediately available funds, or other instrument acceptable to the Board;
(2) if the Common Stock is registered under the Exchange Act, except as may otherwise be provided in the applicable Option agreement, by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding;
(3) if the Common Stock is registered under the Exchange Act and to the extent provided for in the applicable Option agreement or approved by the Board, in its sole discretion, by delivery (either by actual delivery or attestation) of shares of Common Stock owned by the Participant valued at their fair market value as determined by (or in a manner approved by) the Board (Fair Market Value), provided (i) such method of payment is then permitted under applicable law, (ii) such shares of Common Stock, if acquired directly from the Company, were owned by the Participant for such minimum period of time, if any, as may be established by the Board in its discretion and (iii) such shares of Common Stock are not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;
(4) If permitted by the Board with respect to Options that are not Incentive Stock Options, by a net exercise arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price;
(5) to the extent permitted by applicable law and provided for in the applicable option agreement or approved by the Board, in its sole discretion, by (i) delivery of a promissory note of the Participant to the Company on terms determined by the Board, or (ii) payment of such other lawful consideration as the Board may determine; or
(6) by any combination of the above permitted forms of payment.
6. Restricted Stock; Restricted Stock Units
(a) General. The Board may grant Awards entitling recipients to acquire shares of Common Stock (Restricted Stock), subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) from the recipient in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Award. The Board may also grant Awards entitling the recipient to receive an award of stock units to a Participant, which may be settled in cash or shares of Common Stock at the time such Award vests (Restricted Stock Units) (Restricted Stock and Restricted Stock Units are each referred to herein as a Restricted Stock Award).
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(b) Terms and Conditions for All Restricted Stock Awards. The Board shall determine the terms and conditions of a Restricted Stock Award, including the conditions for vesting and repurchase (or forfeiture) and the issue price, if any.
(c) Additional Provisions Relating to Restricted Stock.
(1) Dividends. Participants holding shares of Restricted Stock will be entitled to all ordinary cash dividends paid with respect to such shares, unless otherwise provided by the Board. Unless otherwise provided by the Board, if any dividends or distributions are paid in shares, or consist of a dividend or distribution to holders of Common Stock other than an ordinary cash dividend, the shares, cash or other property will be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid. Each dividend payment will be made no later than the end of the calendar year in which the dividends are paid to shareholders of that class of stock or, if later, the 15th day of the third month following the date the dividends are paid to shareholders of that class of stock.
(2) Stock Certificates. The Company may require that any stock certificates issued in respect of shares of Restricted Stock shall be deposited in escrow by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). At the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to the beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participants death (the Designated Beneficiary). In the absence of an effective designation by a Participant, Designated Beneficiary shall mean the Participants estate.
7. Other Stock-Based Awards
Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, shares of Common Stock or other property, may be granted hereunder to Participants (Other Stock-Based Awards), including without limitation stock appreciation rights (SARs) and Awards entitling recipients to receive shares of Common Stock to be delivered in the future. Such Other Stock-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan or as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock-Based Awards may be paid in shares of Common Stock or cash, as the Board shall determine. Subject to the provisions of the Plan, the Board shall determine the terms and conditions of each Other Stock-Based Award, including any purchase price applicable thereto.
8. Adjustments for Changes in Common Stock and Certain Other Events
(a) Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under this Plan, (ii) the number and class of securities and exercise price per share of each outstanding Option, (iii) the number of shares subject to and the repurchase price per share
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subject to each outstanding Restricted Stock Award, and (iv) the terms of each other outstanding Award shall be equitably adjusted by the Company (or substituted Awards may be made, if applicable) in the manner determined by the Board. Without limiting the generality of the foregoing, in the event the Company effects a split of the Common Stock by means of a stock dividend and the exercise price of and the number of shares subject to an outstanding Option are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then an optionee who exercises an Option between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.
(b) Reorganization Events.
(1) Definition. A Reorganization Event shall mean: (i) the dissolution or liquidation of the Company, (ii) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (iii) a merger, reorganization or consolidation pursuant to which the holders of the Companys outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the surviving or resulting entity (or its ultimate parent, if applicable), (iv) the acquisition of all or a majority of the outstanding voting stock of the Company in a single transaction or a series of related transactions by a person or group of persons, or (v) any other merger, acquisition, reorganization, consolidation, combination or reclassification of the Company, as determined by the Board; provided, however, that the Companys first firm commitment underwritten public offering of its Common Stock under the Securities Act of 1933, as amended, any subsequent public offering or another capital raising event, or a merger effected solely to change the Companys domicile shall not constitute a Reorganization Event.
(2) Consequences of a Reorganization Event on Awards Other than Restricted Stock Awards. In connection with a Reorganization Event, the Board may take any one or more of the following actions as to all or any (or any portion of) outstanding Awards other than Restricted Stock Awards on such terms as the Board determines: (i) provide that Awards shall be assumed, or substantially equivalent Awards shall be substituted with new awards, by the acquiring or succeeding corporation (or an affiliate thereof), (ii) provide that the Participants unexercised Awards will terminate immediately prior to the consummation of such Reorganization Event unless exercised by the Participant within a specified period determined by the Board, (iii) provide that outstanding Awards shall become exercisable, realizable, or deliverable, or restrictions applicable to an Award shall lapse, in whole or in part prior to or upon such Reorganization Event, (iv) in the event of a Reorganization Event under the terms of which holders of Common Stock will receive upon consummation thereof a cash payment for each share surrendered in the Reorganization Event in such amount as determined by the Board (the Acquisition Price), make or provide for a cash payment to a Participant equal to the excess, if any, of (A) the Acquisition Price times the number of shares of Common Stock subject to the vested portion of a Participants Awards (to the extent the exercise price does not exceed the Acquisition Price) over (B) the aggregate exercise price of all such outstanding Awards and any applicable tax withholdings, in exchange for the termination of such Awards, (v) provide that, in connection with a liquidation or dissolution of the Company, Awards shall convert into the right
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to receive liquidation proceeds (if applicable, net of the exercise price thereof and any applicable tax withholdings) and (vi) any combination of the foregoing. In taking any of the actions permitted under this Section 8(b), the Board shall not be obligated by the Plan to treat all Awards, all Awards held by a Participant, or all Awards of the same type, identically.
For purposes of clause (i) above, an Option shall be considered assumed if, following consummation of the Reorganization Event, the Option confers the right to purchase, for each share of Common Stock subject to the Option immediately prior to the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders of Common Stock for each share of Common Stock held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise of Options to consist solely of common stock of the acquiring or succeeding corporation (or an affiliate thereof) equivalent in value (as determined by the Board) to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Reorganization Event.
(3) Consequences of a Reorganization Event on Restricted Stock Awards. Upon the occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, the Board may take any one or more of the following actions as to all or any (or any portion of) outstanding Restricted Stock Awards on such terms as the Board determines (i) provide that such Restricted Stock Awards shall be assumed, continued or substituted by the acquiror and the repurchase and other rights of the Company under each outstanding Restricted Stock Award shall inure to the benefit of the Companys successor and shall, unless the Board determines otherwise, apply to the cash, securities or other property which the Common Stock was converted into or exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as they applied to the Common Stock subject to such Restricted Stock Award, (ii) provide that any Restricted Stock Awards shall be forfeited immediately prior to the effective time of any such Reorganization Event and any such Restricted Stock so forfeited shall be repurchased from the Participant at a price per share equal to the original per share purchase price paid by the Participant (subject to adjustment as provided herein) for such Shares; (iii) notwithstanding anything to the contrary set forth herein, the Company shall have the right, but not the obligation, to make or provide for a cash payment to the Participants who hold Restricted Stock Awards, without consent of such Participants, in exchange for the cancellation thereof, in an amount equal to the Acquisition Price times the number of Shares subject to such Awards, to be paid at the time of such Reorganization Event or upon the later vesting of such Awards; and (iv) any combination of the foregoing. In taking any of the actions permitted under this Section 8(b), the Board shall not be obligated by the Plan to treat all Awards, all Awards held by a Participant, or all Awards of the same type, identically.
Upon the occurrence of a Reorganization Event involving the liquidation or dissolution of the Company, except to the extent specifically provided to the contrary in the instrument evidencing any Restricted Stock Award or any other agreement between a Participant and the Company, all restrictions and conditions on all Restricted Stock Awards then outstanding shall automatically be deemed terminated or satisfied.
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9. General Provisions Applicable to Awards
(a) Transferability of Awards. Except as the Board may otherwise determine or provide in an Award Agreement (as defined below), Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an Incentive Stock Option, pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be exercisable only by the Participant. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees.
(b) Documentation. Each Award shall be evidenced in such form (written, electronic or otherwise) as the Board shall determine (each an Award Agreement). Each Award Agreement may contain terms and conditions in addition to those set forth in the Plan, which may include, without limitation, the provisions applicable in the event employment or service terminates, and the Companys authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award.
(c) Lock-Up. If requested by the Company, a Participant shall not sell or otherwise transfer or dispose of any Shares (including, without limitation, pursuant to Rule 144 under the Securities Act of 1933, as amended) held by him or her for such period following the effective date of a public offering by the Company of Shares as the Company shall specify reasonably and in good faith. If requested by the underwriter engaged by the Company, each Participant shall execute a separate letter confirming his or her agreement to comply with this Section.
(d) Board Discretion. Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award need not be identical, and the Board need not treat Participants uniformly.
(e) Termination of Status. The Board shall determine the effect on an Award of the disability, death, termination or other cessation of employment or service, authorized leave of absence or other change in the employment or service or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participants legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award.
(f) Withholding. The Participant must satisfy all applicable federal, state, and local or other income and employment tax withholding obligations before the Company will deliver stock certificates or otherwise recognize ownership of Common Stock or make any cash payment under an Award. The Company may decide to satisfy the withholding obligations through additional withholding on salary or wages. If the Company elects not to or cannot withhold from other compensation, the Participant must pay the Company the full amount, if any, required for withholding or have a broker tender to the Company cash equal to the withholding obligations. Payment of withholding obligations is due before the Company will
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issue any shares on exercise, release from forfeiture, or settlement of an Award or, if the Company so requires, at the same time as payment of the exercise price unless the Company determines otherwise. If provided for in an Award or approved by the Board in its sole discretion, a Participant may satisfy such tax obligations in whole or in part by delivery of shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value; provided, however, except as otherwise provided by the Board, that the total tax withholding where stock is being used to satisfy such tax obligations cannot exceed the Companys statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income). Such tax withholding may also be satisfied by the Company causing its transfer agent to sell a number of Shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due and remitting the proceeds from such sale to the Company. Shares surrendered to satisfy tax withholding requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.
(g) Amendment of Award.
(1) The Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option. The Participants consent to such action shall be required unless (i) the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participants rights under the Plan or (ii) the change is permitted under Section 8 hereof.
(2) The Board may, without stockholder approval, amend any outstanding Award granted under the Plan to provide an exercise price per share that is lower than the then-current exercise price per share of such outstanding Award. The Board may also, without stockholder approval, cancel any outstanding award (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan covering the same or a different number of shares of Common Stock and having an exercise price per share lower than the then-current exercise price per share of the cancelled award; provided, that such price, if any, must satisfy the requirements that would apply to the substituted or amended award if it were then initially granted under the Plan for purpose of satisfying changes in law or for any other lawful purpose).
(h) Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Companys counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.
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(i) Acceleration. The Board may at any time provide that any Award shall become immediately exercisable in full or in part, free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be.
10. Miscellaneous
(a) No Right To Employment or Other Status. No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder of such shares.
(c) Effective Date and Term of Plan. The Companys 2011 Stock Incentive Plan was originally effective on , 2011. This Amended and Restated 2011 Stock Incentive Plan shall become effective on the date on which it is adopted by the Board. No Awards shall be granted under the Plan after the expiration of 10 years from the earlier of (i) the date on which the Plan was adopted by the Board or (ii) the date the Plan was approved by the Companys stockholders, but Awards previously granted may extend beyond that date.
(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time; provided that if at any time the approval of the Companys stockholders is required as to any modification or amendment under Section 422 of the Code or any successor provision with respect to Incentive Stock Options, the Board may not effect such modification or amendment without such approval. Unless otherwise specified in the amendment, any amendment to the Plan adopted in accordance with this Section 10(d) shall apply to, and be binding on the holders of, all Awards outstanding under the Plan at the time the amendment is adopted, provided the Board determines that such amendment does not materially and adversely affect the rights of Participants under the Plan.
(e) Authorization of Sub-Plans. The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements to this Plan containing (i) such limitations on the Boards discretion under the Plan as the Board deems necessary or desirable or (ii) such additional or different terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any jurisdiction which is not the subject of such supplement.
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(f) Compliance with Code Section 409A. Awards are intended to be exempt from Section 409A to the greatest extent possible and to otherwise comply with Section 409A. The Plan and all Awards shall be interpreted in accordance with such intent. To the extent that any Award is determined to constitute nonqualified deferred compensation within the meaning of Section 409A (a 409A Award), the Award shall be subject to such additional rules and requirements as specified by the Board from time to time in order to comply with Section 409A. Further, the settlement of any 409A Award may not be accelerated except to the extent permitted by Section 409A. In this regard, if any amount under a 409A Award is payable upon a separation from service (within the meaning of Section 409A) to a grantee who is considered a specified employee (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the grantees separation from service, or (ii) the grantees death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A. The Company shall have no liability to a Participant, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A is not so exempt or compliant or for any action taken by the Board.
(g) Governing Law. The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than such state.
11
Nonstatutory Stock Option Agreement
Granted Under the Amended and Restated 2011 Stock Incentive Plan
11. Grant of Option.
This agreement evidences the grant by Akili Interactive Labs, Inc., a Delaware corporation (the Company), on (the Grant Date) to , a consultant of the Company (the Participant), of an option to purchase, in whole or in part, on the terms provided herein and in the Companys Amended and Restated 2011 Stock Incentive Plan (the Plan), a total of shares (the Shares) of common stock, $0.0001 par value per share, of the Company (Common Stock) at $ . per Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on [10 years from Grant Date] (the Final Exercise Date).
It is intended that the option evidenced by this agreement shall not be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the Code). Except as otherwise indicated by the context, the term Participant, as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms.
12. Vesting Schedule.
[This option is fully vested.]
[This option will become exercisable (vest) as to 25% of the original number of Shares on (the Vesting Commencement Date) and as to 12.5% of the original number of Shares at the end of each successive six-month period following the Vesting Commencement Date, provided the Participant remains in continuous service with the Company through each such vesting date.
The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all Shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under Section 3 hereof or the Plan.
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13. Exercise of Option.
(a) Form of Exercise. Each election to exercise this option shall be in writing, signed by the Participant, and received by the Company at its principal office, accompanied by this agreement, and payment in full in the manner provided in the Plan. The Participant may purchase less than the number of Shares covered hereby, provided that no partial exercise of this option may be for any fractional share.
(b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this option may not be exercised unless the Participant, at the time he or she exercises this option, is, and has been at all times since the Grant Date, an employee or officer or director of, or consultant or advisor to, the Company or any other entity the employees, officers, directors, consultants, or advisors of which are eligible to receive option grants under the Plan (an Eligible Participant).
(c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the right to exercise this option shall terminate three months after such cessation (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation. Notwithstanding the foregoing, if the Participant, prior to the Final Exercise Date, violates the non-competition or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company, the right to exercise this option shall terminate immediately upon such violation.
(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date while he or she is an Eligible Participant and the Company has not terminated such relationship for cause as specified in paragraph (e) below, this option shall be exercisable, within the period of one year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized transferee), provided that this option shall be exercisable only to the extent that this option was exercisable by the Participant on the date of his or her death or disability, and further provided that this option shall not be exercisable after the Final Exercise Date.
(e) Termination for Cause. If, prior to the Final Exercise Date, the Participants employment or other relationship with the Company is terminated by the Company for Cause (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such termination of employment or other relationship. If the Participant is party to an employment, consulting or severance agreement with the Company that contains a definition of cause for termination of employment or other relationship, Cause shall have the meaning ascribed to such term in such agreement. Otherwise, Cause shall mean willful misconduct by the Participant or willful failure by the Participant to perform his or her responsibilities to the Company (including, without limitation, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the Participant and the Company), as determined by the Company, which determination shall be conclusive. The Participants employment or other relationship shall be considered to have been terminated for Cause if the Company determines, within 30 days after the Participants resignation, that termination for Cause was warranted.
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14. Company Right of First Refusal.
(a) Notice of Proposed Transfer. If the Participant proposes to sell, assign, transfer, pledge, hypothecate or otherwise dispose of, by operation of law or otherwise (collectively, transfer) any Shares acquired upon exercise of this option, then the Participant shall first give written notice of the proposed transfer (the Transfer Notice) to the Company. The Transfer Notice shall name the proposed transferee and state the number of such Shares the Participant proposes to transfer (the Offered Shares), the price per share and all other material terms and conditions of the transfer.
(b) Company Right to Purchase. For 30 days following its receipt of such Transfer Notice, the Company shall have the option to purchase all or part of the Offered Shares at the price and upon the terms set forth in the Transfer Notice. In the event the Company elects to purchase all or part of the Offered Shares, it shall give written notice of such election to the Participant within such 30-day period. Within 10 days after his or her receipt of such notice, the Participant shall tender to the Company at its principal offices the certificate or certificates representing the Offered Shares to be purchased by the Company, duly endorsed in blank by the Participant or with duly endorsed stock powers attached thereto, all in a form suitable for transfer of the Offered Shares to the Company. Promptly following receipt of such certificate or certificates, the Company shall deliver or mail to the Participant a check in payment of the purchase price for such Offered Shares; provided that if the terms of payment set forth in the Transfer Notice were other than cash against delivery, the Company may pay for the Offered Shares on the same terms and conditions as were set forth in the Transfer Notice; and provided further that any delay in making such payment shall not invalidate the Companys exercise of its option to purchase the Offered Shares.
(c) Shares Not Purchased By Company. If the Company does not elect to acquire all of the Offered Shares, the Participant may, within the 30-day period following the expiration of the option granted to the Company under subsection (b) above, transfer the Offered Shares which the Company has not elected to acquire to the proposed transferee, provided that such transfer shall not be on terms and conditions more favorable to the transferee than those contained in the Transfer Notice. Notwithstanding any of the above, all Offered Shares transferred pursuant to this Section 4 shall remain subject to the right of first refusal set forth in this Section 4 and such transferee shall, as a condition to such transfer, deliver to the Company a written instrument confirming that such transferee shall be bound by all of the terms and conditions of this Section 4.
(d) Consequences of Non-Delivery. After the time at which the Offered Shares are required to be delivered to the Company for transfer to the Company pursuant to subsection (b) above, the Company shall not pay any dividend to the Participant on account of such Offered Shares or permit the Participant to exercise any of the privileges or rights of a stockholder with respect to such Offered Shares, but shall, insofar as permitted by law, treat the Company as the owner of such Offered Shares.
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(e) Exempt Transactions. The following transactions shall be exempt from the provisions of this Section 4:
(1) any transfer of Shares to or for the benefit of any spouse, child or grandchild of the Participant, or to a trust for their benefit;
(2) any transfer pursuant to an effective registration statement filed by the Company under the Securities Act of 1933, as amended (the Securities Act); and
(3) the sale of all or substantially all of the outstanding shares of capital stock of the Company (including pursuant to a merger or consolidation);
provided, however, that in the case of a transfer pursuant to clause (1) above, such Shares shall remain subject to the right of first refusal set forth in this Section 4.
(f) Assignment of Company Right. The Company may assign its rights to purchase Offered Shares in any particular transaction under this Section 4 to one or more persons or entities.
(g) Termination. The provisions of this Section 4 shall terminate upon the earlier of the following events:
(1) the closing of the sale of shares of Common Stock in an underwritten public offering pursuant to an effective registration statement filed by the Company under the Securities Act; or
(2) the sale of all or substantially all of the outstanding shares of capital stock, assets or business of the Company, by merger, consolidation, sale of assets or otherwise (other than a merger or consolidation in which all or substantially all of the individuals and entities who were beneficial owners of the Companys voting securities immediately prior to such transaction beneficially own, directly or indirectly, more than 50% (determined on an as-converted basis) of the outstanding securities entitled to vote generally in the election of directors of the resulting, surviving or acquiring corporation in such transaction).
(h) No Obligation to Recognize Invalid Transfer. The Company shall not be required (1) to transfer on its books any of the Shares which shall have been sold or transferred in violation of any of the provisions set forth in this Section 4, or (2) to treat as owner of such Shares or to pay dividends to any transferee to whom any such Shares shall have been so sold or transferred.
(i) Legends. The certificate representing Shares shall bear a legend substantially in the following form (in addition to, or in combination with, any legend required by applicable federal and state securities laws and agreements relating to the transfer of the Company securities):
The shares represented by this certificate are subject to a right of first refusal in favor of the Company, as provided in a certain stock option agreement with the Company.
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15. Agreement in Connection with Initial Public Offering.
The Participant agrees, in connection with the initial underwritten public offering of the Common Stock pursuant to a registration statement under the Securities Act, (i) not to (a) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any other securities of the Company or (b) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of shares of Common Stock or other securities of the Company, whether any transaction described in clause (a) or (b) is to be settled by delivery of securities, in cash or otherwise, during the period beginning on the date of the filing of such registration statement with the Securities and Exchange Commission and ending 180 days after the date of the final prospectus relating to the offering (plus up to an additional 34 days to the extent requested by the managing underwriters for such offering in order to address Rule 2711(f) of the National Association of Securities Dealers, Inc. or any similar successor provision), and (ii) to execute any agreement reflecting clause (i) above as may be requested by the Company or the managing underwriters at the time of such offering. The Company may impose stop-transfer instructions with respect to the shares of Common Stock or other securities subject to the foregoing restriction until the end of the lock-up period.
16. Withholding.
No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.
17. Transfer Restrictions.
(a) This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.
(b) The Participant agrees that he or she will not transfer any Shares issued pursuant to the exercise of this option unless the transferee, as a condition to such transfer, delivers to the Company a written instrument confirming that such transferee shall be bound by all of the terms and conditions of Section 4 and Section 5; provided that such a written confirmation shall not be required with respect to (1) Section 4 after such provision has terminated in accordance with Section 4(g) or (2) Section 5 after the completion of the lock-up period in connection with the Companys initial underwritten public offering.
18. Provisions of the Plan.
This option is subject to the provisions of the Plan (including the provisions relating to amendments to the Plan), a copy of which is furnished to the Participant with this option.
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PARTICIPANTS ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Companys 2011 Stock Incentive Plan.
PARTICIPANT: | ||
Sign: |
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[NAME] | ||
Address: |
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Incentive Stock Option Agreement
Granted Under the Amended and Restated 2011 Stock Incentive Plan
19. Grant of Option.
This agreement evidences the grant by Akili Interactive Labs, Inc., a Delaware corporation (the Company), on ______________ (the Grant Date) to ___________________, an employee of the Company (the Participant), of an option to purchase, in whole or in part, on the terms provided herein and in the Amended and Restated Companys 2011 Stock Incentive Plan (the Plan), a total of _______________ shares (the Shares) of common stock, $0.0001 par value per share, of the Company (Common Stock) at $_.__ per Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on [10 years from Grant Date] (the Final Exercise Date).
It is intended that the option evidenced by this agreement shall be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the Code). Except as otherwise indicated by the context, the term Participant, as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms. To the extent any portion of the option does not so qualify, it shall be deemed a non-qualified stock option.
20. Vesting Schedule.
This option will become exercisable (vest) as to 25% of the original number of Shares on _______________ (the Vesting Commencement Date) and as to 12.5% of the original number of Shares at the end of each successive six-month period following the Vesting Commencement Date, provided the Participant remains in continuous service with the Company through each such vesting date.
The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all Shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under Section 3 hereof or the Plan.
21. Exercise of Option.
(a) Form of Exercise. Each election to exercise this option shall be in writing, signed by the Participant, and received by the Company at its principal office, accompanied by this
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agreement, and payment in full in the manner provided in the Plan. The Participant may purchase less than the number of Shares covered hereby, provided that no partial exercise of this option may be for any fractional share.
(b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this option may not be exercised unless the Participant, at the time he or she exercises this option, is, and has been at all times since the Grant Date, an employee or officer or director of, or consultant or advisor to, the Company or any parent or subsidiary of the Company as defined in Section 424(e) or (f) of the Code (an Eligible Participant).
(c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the right to exercise this option shall terminate three months after such cessation (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation. Notwithstanding the foregoing, if the Participant, prior to the Final Exercise Date, violates the non-competition or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company, the right to exercise this option shall terminate immediately upon such violation.
(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date while he or she is an Eligible Participant and the Company has not terminated such relationship for cause as specified in paragraph (e) below, this option shall be exercisable, within the period of one year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized transferee), provided that this option shall be exercisable only to the extent that this option was exercisable by the Participant on the date of his or her death or disability, and further provided that this option shall not be exercisable after the Final Exercise Date.
(e) Termination for Cause. If, prior to the Final Exercise Date, the Participants employment is terminated by the Company for Cause (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such termination of employment. If the Participant is party to an employment or severance agreement with the Company that contains a definition of cause for termination of employment, Cause shall have the meaning ascribed to such term in such agreement. Otherwise, Cause shall mean willful misconduct by the Participant or willful failure by the Participant to perform his or her responsibilities to the Company (including, without limitation, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the Participant and the Company), as determined by the Company, which determination shall be conclusive. The Participants employment shall be considered to have been terminated for Cause if the Company determines, within 30 days after the Participants resignation, that termination for Cause was warranted.
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22. Company Right of First Refusal.
(a) Notice of Proposed Transfer. If the Participant proposes to sell, assign, transfer, pledge, hypothecate or otherwise dispose of, by operation of law or otherwise (collectively, transfer) any Shares acquired upon exercise of this option, then the Participant shall first give written notice of the proposed transfer (the Transfer Notice) to the Company. The Transfer Notice shall name the proposed transferee and state the number of such Shares the Participant proposes to transfer (the Offered Shares), the price per share and all other material terms and conditions of the transfer.
(b) Company Right to Purchase. For 30 days following its receipt of such Transfer Notice, the Company shall have the option to purchase all or part of the Offered Shares at the price and upon the terms set forth in the Transfer Notice. In the event the Company elects to purchase all or part of the Offered Shares, it shall give written notice of such election to the Participant within such 30-day period. Within 10 days after his or her receipt of such notice, the Participant shall tender to the Company at its principal offices the certificate or certificates representing the Offered Shares to be purchased by the Company, duly endorsed in blank by the Participant or with duly endorsed stock powers attached thereto, all in a form suitable for transfer of the Offered Shares to the Company. Promptly following receipt of such certificate or certificates, the Company shall deliver or mail to the Participant a check in payment of the purchase price for such Offered Shares; provided that if the terms of payment set forth in the Transfer Notice were other than cash against delivery, the Company may pay for the Offered Shares on the same terms and conditions as were set forth in the Transfer Notice; and provided further that any delay in making such payment shall not invalidate the Companys exercise of its option to purchase the Offered Shares.
(c) Shares Not Purchased By Company. If the Company does not elect to acquire all of the Offered Shares, the Participant may, within the 30-day period following the expiration of the option granted to the Company under subsection (b) above, transfer the Offered Shares which the Company has not elected to acquire to the proposed transferee, provided that such transfer shall not be on terms and conditions more favorable to the transferee than those contained in the Transfer Notice. Notwithstanding any of the above, all Offered Shares transferred pursuant to this Section 4 shall remain subject to the right of first refusal set forth in this Section 4 and such transferee shall, as a condition to such transfer, deliver to the Company a written instrument confirming that such transferee shall be bound by all of the terms and conditions of this Section 4.
(d) Consequences of Non-Delivery. After the time at which the Offered Shares are required to be delivered to the Company for transfer to the Company pursuant to subsection (b) above, the Company shall not pay any dividend to the Participant on account of such Offered Shares or permit the Participant to exercise any of the privileges or rights of a stockholder with respect to such Offered Shares, but shall, insofar as permitted by law, treat the Company as the owner of such Offered Shares.
(e) Exempt Transactions. The following transactions shall be exempt from the provisions of this Section 4:
(1) any transfer of Shares to or for the benefit of any spouse, child or grandchild of the Participant, or to a trust for their benefit;
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(2) any transfer pursuant to an effective registration statement filed by the Company under the Securities Act of 1933, as amended (the Securities Act); and
(3) the sale of all or substantially all of the outstanding shares of capital stock of the Company (including pursuant to a merger or consolidation);
provided, however, that in the case of a transfer pursuant to clause (1) above, such Shares shall remain subject to the right of first refusal set forth in this Section 4.
(f) Assignment of Company Right. The Company may assign its rights to purchase Offered Shares in any particular transaction under this Section 4 to one or more persons or entities.
(g) Termination. The provisions of this Section 4 shall terminate upon the earlier of the following events:
(1) the closing of the sale of shares of Common Stock in an underwritten public offering pursuant to an effective registration statement filed by the Company under the Securities Act; or
(2) the sale of all or substantially all of the outstanding shares of capital stock, assets or business of the Company, by merger, consolidation, sale of assets or otherwise (other than a merger or consolidation in which all or substantially all of the individuals and entities who were beneficial owners of the Companys voting securities immediately prior to such transaction beneficially own, directly or indirectly, more than 50% (determined on an as-converted basis) of the outstanding securities entitled to vote generally in the election of directors of the resulting, surviving or acquiring corporation in such transaction).
(h) No Obligation to Recognize Invalid Transfer. The Company shall not be required (1) to transfer on its books any of the Shares which shall have been sold or transferred in violation of any of the provisions set forth in this Section 4, or (2) to treat as owner of such Shares or to pay dividends to any transferee to whom any such Shares shall have been so sold or transferred.
(i) Legends. The certificate representing Shares shall bear a legend substantially in the following form (in addition to, or in combination with, any legend required by applicable federal and state securities laws and agreements relating to the transfer of the Company securities):
The shares represented by this certificate are subject to a right of first refusal in favor of the Company, as provided in a certain stock option agreement with the Company.
23. Agreement in Connection with Initial Public Offering.
The Participant agrees, in connection with the initial underwritten public offering of the Common Stock pursuant to a registration statement under the Securities Act, (i) not to (a) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any other securities of the Company or (b) enter into any swap or other agreement that transfers, in whole or in part,
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any of the economic consequences of ownership of shares of Common Stock or other securities of the Company, whether any transaction described in clause (a) or (b) is to be settled by delivery of securities, in cash or otherwise, during the period beginning on the date of the filing of such registration statement with the Securities and Exchange Commission and ending 180 days after the date of the final prospectus relating to the offering (plus up to an additional 34 days to the extent requested by the managing underwriters for such offering in order to address Rule 2711(f) of the National Association of Securities Dealers, Inc. or any similar successor provision), and (ii) to execute any agreement reflecting clause (i) above as may be requested by the Company or the managing underwriters at the time of such offering. The Company may impose stop-transfer instructions with respect to the shares of Common Stock or other securities subject to the foregoing restriction until the end of the lock-up period.
24. Tax Matters.
(a) Withholding. No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.
(b) Disqualifying Disposition. The Participant understands that in order to obtain the benefits of an incentive stock option under Section 422 of the Code, no sale or other disposition may be made of Shares for which incentive stock option treatment is desired within the one-year period beginning on the day after the day of the transfer of such Shares to him or her, nor within the two-year period beginning on the day after the Grant Date and further that this option must be exercised within three months after termination of employment as an employee (or 12 months in the case of death or disability to qualify as an incentive stock option). If the Participant disposes of Shares acquired upon exercise of this option within either of these periods, the Participant shall notify the Company in writing within 30 days after such disposition.
25. Transfer Restrictions.
(a) This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.
(b) The Participant agrees that he or she will not transfer any Shares issued pursuant to the exercise of this option unless the transferee, as a condition to such transfer, delivers to the Company a written instrument confirming that such transferee shall be bound by all of the terms and conditions of Section 4 and Section 5; provided that such a written confirmation shall not be required with respect to (1) Section 4 after such provision has terminated in accordance with Section 4(g) or (2) Section 5 after the completion of the lock-up period in connection with the Companys initial underwritten public offering.
26. Provisions of the Plan.
This option is subject to the provisions of the Plan (including the provisions relating to amendments to the Plan), a copy of which is furnished to the Participant with this option.
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PARTICIPANTS ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Companys 2011 Stock Incentive Plan.
PARTICIPANT: | ||
Sign: |
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[NAME] |
Address: |
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Exhibit 21.1
SOCIAL CAPITAL SUVRETTA HOLDINGS CORP. I
LIST OF SUBSIDIARIES
Name |
Jurisdiction of Incorporation |
|
Karibu Merger Sub, Inc. | Delaware |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the use of our report dated June 30, 2021, except as to notes 2 and 13, which are as of February 14, 2022, with respect to the consolidated financial statements of Akili Interactive Labs, Inc., included herein and to the reference to our firm under the heading Experts in the proxy statement/prospectus.
/s/ KPMG LLP
Boston, Massachusetts
February 14, 2022
Exhibit 23.2
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS CONSENT
We consent to the inclusion in this Registration Statement of Social Capital Suvretta Holdings Corp. I (the Company) on Form S-4, of our report dated April 20, 2021, except for the effects of the restatement disclosed in Note 4 as to which the date is June 1, 2021 and Note 8 as to which the date is July 1, 2021 which includes an explanatory paragraph as to the Companys ability to continue as a going concern, with respect to our audit of the financial statements of Social Capital Suvretta Holdings Corp. I as of March 2, 2021 and for the period from February 25, 2021 (Inception) through March 2, 2021, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading Experts in such Prospectus.
/s/ Marcum LLP
Marcum LLP
Philadelphia, PA
February 14, 2022
Exhibit 99.2
Consent to be Named as a Director
In connection with the filing by Social Capital Suvretta Holdings Corp. I of the Registration Statement on Form S-4 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the Securities Act), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named in the Registration Statement and any and all amendments and supplements thereto as a member of the board of directors of Social Capital Suvretta Holdings Corp. I following the consummation of the business combination, which will be renamed Akili, Inc. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
Dated: February 14, 2022 |
/s/ Walter Edward (Eddie) Martucci, II |
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Name: Walter Edward (Eddie) Martucci, II |
EX-FILING FEES
Calculation of Filing Fee Tables
FORM S-4
(Form Type)
SOCIAL CAPITAL SUVRETTA HOLDINGS CORP. I
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered and Carry Forward Securities
Security
Type |
Security
Class Title |
Fee
Calculation or Carry Forward Rule |
Amount
Registered |
Proposed
Maximum Offering Price Per Share |
Maximum
Aggregate Offering Price |
Fee Rate |
Amount of
Registration Fee |
|||||||||||||||||||||||||
Newly Registered Securities | ||||||||||||||||||||||||||||||||
Fees to Be Paid |
Equity(1) |
|
Common stock,
par value
$0.0001 per
|
|
|
Rules 457(c)
and 457(f) |
|
31,890,000(2) (3) | $ | 9.83 | (4) | $ | 313,478,700.00 | 0.0000927 | $ | 29,059.48 | ||||||||||||||||
Equity(5) |
|
Common stock,
par value
$0.0001 per
|
|
|
Rules 457(c),
457(f) and 457(g) |
|
74,282,565 | $ | 9.83 | (4) | $ | 730,197,613.95 | 0.0000927 | $ | 67,689.32 | |||||||||||||||||
Fees Previously Paid |
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Total Offering Amounts | $ | 1,043,676,313.95 | $ | 96,748.80 | ||||||||||||||||||||||||||||
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Total Fees Previously Paid | $ | 0.00 | ||||||||||||||||||||||||||||||
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Total Fee Offsets | $ | 0.00 | ||||||||||||||||||||||||||||||
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Net Fee Due | $ | 96,748.80 | ||||||||||||||||||||||||||||||
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(1) |
Immediately prior to the consummation of the Merger described in the proxy statement/prospectus forming part of this registration statement (the proxy statement/prospectus), Social Capital Suvretta Holdings Corp. I, a Cayman Islands exempted company with limited liability (SCS), intends to effect a deregistration under the Cayman Islands Companies Act (As Revised) and a domestication under Section 388 of the Delaware General Corporation Law, pursuant to which SCSs jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware (the Domestication). All securities being registered will be issued by SCS (after the Domestication), the continuing entity following the Domestication, which will be renamed Akili, Inc. upon the consummation of the Merger, as further described in the proxy statement/prospectus. As used herein, Akili, Inc. refers to SCS after the Domestication and/or the consummation of the Merger, including after such change of name, as applicable. |
(2) |
The number of shares of Akili, Inc. common stock being registered represents (i) the number of Class A ordinary shares of SCS that were registered pursuant to the Registration Statements on Form S-1 (333-256723 and 333-257543) (collectively, the IPO Registration Statements) and offered by SCS in its initial public offering (the SCS public shares), (ii) the number of Class B ordinary shares of SCS purchased by SCS Sponsor I LLC, a Cayman Islands limited liability company (the Sponsor), in a private placement prior to SCSs initial public offering (the founder shares) and (iii) the number of Class A ordinary shares of SCS purchased by the Sponsor in a private placement that occurred simultaneously with the closing of SCSs initial public offering (the private placement shares). The SCS public shares, the SCS founder shares and the private placement shares will be automatically converted by operation of law into shares of Akili, Inc. common stock in the Domestication (the SCS public shares as converted, Akili, Inc. public shares, the SCS founder shares as converted, Akili, Inc. founder shares and the private placement shares as converted, Akili, Inc. private placement shares). |
(3) |
Pursuant to Rule 416(a) of the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions. |
(4) |
Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the Class A ordinary shares of SCS (the company to which Akili, Inc. will succeed following the Domestication) on Nasdaq on February 9, 2022 ($9.83 per Class A ordinary share) (such date being within five business days of the date that this registration statement was first filed with the SEC). This calculation is in accordance with Rule 457(f)(1) of the Securities Act. |
(5) |
Represents the aggregate number of shares of Akili, Inc. common stock (a) that may be issued in respect of issued and outstanding shares of Akili capital stock in the Merger (including the issuance of the Earnout Shares) and (b) that may be issued following the Merger upon (i) the exercise of options to purchase Akili, Inc. common stock into which options to purchase Akili common stock outstanding as of immediately prior to the closing of the Merger are converted in the Merger and (ii) the exercise of warrants to purchase Akili, Inc. common stock into which warrants to purchase Akili common stock outstanding as of immediately prior to the closing of the Merger are converted. |