Item 1.01. Entry into a Material Definitive Agreement.
Business Combination Agreement
Overview
Future Health ESG Corp., a Delaware corporation ("Future Health"), entered into
a business combination agreement, effective as of June 13, 2022 (the "Business
Combination Agreement"), to acquire 100% of the issued and outstanding shares of
common stock (the "Purchased Shares") of Excelera DCE, a California corporation
("Excelera"), from its sole owner, MacArthur Court Acquisition Corp., a
California corporation ("Seller"), in exchange for the issuance of 40,000,000
shares of Future Health Common Stock at the Closing ("Closing Stock
Consideration") and an additional 20,000,000 shares of Future Health Common
Stock (the "Earnout Shares") to be paid in accordance with the terms, and
subject to the conditions, set forth in Exhibit D of the Business Combination
Agreement (the "Business Combination"). The acquisition is intended to be
treated by all parties as a tax-free reorganization within the meaning of
Sections 368(a)(1)(C) or (D) of the Internal Revenue Code of 1986, as amended
(the "Intended Tax Treatment"). Upon completion of the transaction, the combined
company is expected to operate as Excelera Health, Inc., and is expected to be
listed on the Nasdaq under the new ticker symbol "XLRA". Unless otherwise
defined herein, the capitalized terms used herein are defined in the Business
Combination Agreement.
No later than three business days following the satisfaction or waiver of the
conditions set forth in the Business Combination Agreement (other than those
conditions that by their nature are to be satisfied at the Closing, but subject
to the satisfaction or waiver of those conditions at such time), the Business
Combination will be consummated by the transfer of the Purchased Shares to
Future Health and the issuance of the Closing Stock Consideration to Seller.
Transfer of Securities; Issuance of Securities in exchange for Transferred
Securities
On the Closing Date, (i) Seller will sell, assign, transfer, convey and deliver
to Future Health, and Future Health will purchase, assume, acquire and accept
from Seller, all of Seller's rights, title and interest in and to the Purchased
Shares, in each case, free and clear of any Liens (other than transfer
restrictions imposed thereon by applicable securities Law) and (ii) Future
Health will instruct its transfer agent to cause the Closing Stock Consideration
to be accepted into The Depository Trust Company and to be issued (in
uncertificated book-entry form) to the Seller.
Earnout Shares
As additional purchase consideration, Future Health will deliver (or cause to be
delivered) to Seller or Seller's permitted Assignee(s), 20,000,000 shares of
Future Health Common Stock (which will be equitably adjusted for share splits,
(including share consolidations), combinations, exchanges, readjustments of
shares, or similar transactions, or any stock dividends or distributions paid in
shares, reclassifications, share dividends, combinations, recapitalizations and
the like with respect to Future Health common stock occurring after the Closing)
(the "Earnout Payment") within five business days after the filing (but in no
event later than the fifth anniversary of the Closing Date) of the first Future
Health Quarterly Report on Form 10-Q or Annual Report on Form 10-K (each
prepared in accordance with GAAP) in which Consolidated Revenues in the most
recent fiscal quarter included therein shall have exceeded One Hundred Fifty
Million U.S. Dollars ($150,000,000), provided that such Earnout Payment shall
only be payable if the filing of such qualifying Form 10-Q or Form 10-K occurs
prior to the fifth anniversary of the Closing Date (the "Earnout Period").
Notwithstanding anything to the contrary herein, all Earnout Shares required to
be paid will be paid within 5 years of the Closing. In the event, and only in
the event, of a Going Private Transaction prior to the end of the Earnout
Period, Future Health will deliver (or cause to be delivered) to Seller or, in
connection with Seller's liquidation following the Closing or as otherwise
permitted by Rev. Proc. 84-42, to an Affiliate of Seller or the shareholders of
the Seller, a pro rata portion of the Earnout Shares (the "Going Private
Earnout"), within five (5) Business Days after the closing of the Going Private
Transaction, based on the most recently filed Future Health Quarterly Report on
Form 10-Q or Annual Report on Form 10-K, as the case may be, with such Going
Private Earnout being the number of shares of Future Health Common Stock equal
to the product of (a) 20,000,000 multiplied by (b) the difference of (A) the
Consolidated Revenues (determined in accordance with GAAP) of Future Health in
the most recent fiscal quarter included in such Form 10-Q or Form 10-K less (B)
$88,000,000, being the agreed quarterly revenue for the first quarter of 2022,
divided by (c) $62,000,000.
Pursuant to the Business Combination Agreement, Future Health and Seller shall
in connection with the Closing enter into a separate registration rights
agreement with respect to the Earnout Shares in form and substance satisfactory
to each of them.
Representations and Warranties; Covenants
The Business Combination Agreement contains representations and warranties and
covenants of the parties thereto that are customary for transactions of this
type. The representations and warranties in the Business Combination Agreement
include, among others, those relating to, (a) entity organization and authority,
(b) capitalization, (c) authorization to enter into the Business Combination
Agreement, (d) legal compliance and approvals, (e) financial statements and
liabilities, (f) absence of changes, (g) litigation, (h) employee benefit
matters, (i) labor and employment matters, (j) taxes, (k) in the case of
Excelera only, (1) sufficiency of assets, (2) real property, (3) intellectual
property, (4) environmental matters, (5) material contracts, (6) insurance, (7)
material healthcare providers, (8) certain business practices, sanctions, (9)
data privacy and data protection, (10) interested party transactions, (11)
Exchange Act, (12) information provided for private placements and proxy
statement, (13) healthcare and insurance laws and (14) healthcare and insurance
permits, and (l) in the case of Future Health only, (1) its public filings, (2)
the PIPE Investment and FPA Investment (each as defined below), (3) its listing,
(4) its investigation and reliance, and (5) its trust account. The covenants in
the Business Combination Agreement are customary for transactions of this type
and include, among others, those relating to, (a) pre-closing conduct of
business by the parties, (b) financing efforts, (c) absence of claims against
the trust account, (d) not to solicit or negotiate with third parties regarding
alternative transactions and comply with certain related restrictions and to
cease discussions regarding alternative transactions, (e) the filing of a
registration statement on Form S-4 or a proxy statement in connection with the
Business Combination (the "Registration Statement"), (f) filing all Tax Returns
consistent with the Intended Tax Treatment, and (g) cooperation in obtaining
necessary approvals from governmental agencies.
. . .
Item 3.02. Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K
with respect to the issuance of shares of common stock of Future Health to the
PIPE Investor and the FPA Investor is incorporated herein by reference in this
Item 3.02. The shares of common stock of Future Health issuable to the PIPE
Investor and the FPA Investor in connection with the PIPE Investment and the FPA
Investment will not be registered under the Securities Act of 1933, as amended
(the "Securities Act"), and will be issued in reliance on the exemption from
registration provided by Section 4(a)(2) of the Securities Act.
Item 7.01. Regulation FD Disclosure.
On June 14, 2022, Future Health and Excelera issued a joint press release
announcing the execution of the Business Combination Agreement. A copy of the
press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and
is incorporated herein by reference.
Exhibit 99.1 and the information set forth therein will not be deemed to be
filed for purposes of Section 18 of the Exchange Act, or otherwise be subject to
the liabilities of that section, nor will they be deemed to be incorporated by
reference in any filing under the Securities Act or the Exchange Act, regardless
of any general incorporation language in such filings. This Current Report on
Form 8-K will not be deemed an admission as to the materiality of any
information contained in this Item 7.01, including Exhibit 99.1.
Important Information for Stockholders
This Current Report on Form 8-K does not constitute an offer to sell or the
solicitation of an offer to buy any securities or constitute a solicitation of
any vote or approval. This Current Report on Form 8-K shall also not constitute
an offer to sell or the solicitation of an offer to buy any securities, or a
solicitation of any vote or approval, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act, or an
exemption therefrom.
In connection with the Business Combination, Future Health will file a proxy
statement or a Registration Statement on Form S-4 with the SEC, which
registration statement will include a proxy statement for Future Health. Future
Health also plans to file other documents with the SEC regarding the Business
Combination. After the proxy statement or the Registration Statement has been
cleared by the SEC, a definitive proxy statement will be mailed to the
stockholders of Future Health. STOCKHOLDERS OF FUTURE HEALTH ARE URGED TO READ
THE PROXY STATEMENT (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER
DOCUMENTS RELATING TO THE PROPOSED TRANSACTIONS THAT WILL BE FILED WITH THE SEC
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. Stockholders will
be able to obtain free copies of the proxy statement and other documents
containing important information about Future Health and Excelera once such
documents are filed with the SEC, through the website maintained by the SEC
at http://www.sec.gov.
Participants in the Solicitation
Future Health and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the stockholders of Future
Health in connection with the Business Combination. Excelera and its officers
and directors may also be deemed participants in such solicitation. Information
about the directors and executive officers of Future Health is set forth in
Future Health's final prospectus filed with the SEC pursuant to Rule 424(b) of
the Securities Act on September 10, 2021 and is available free of charge at the
SEC's website at www.sec.gov or by directing a request to: 8 The Green Suite
12081, Dover, DE 19901. Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials to be filed with the SEC when
they become available.
Forward Looking Statements
The information included herein and in any oral statements made in connection
herewith include forward-looking statements within the meaning of the federal
securities laws, which statements involve substantial risks and uncertainties.
These statements are based on the beliefs and assumptions of the respective
management teams of Future Health, Excelera and Seller. Although Future Health,
Excelera and Seller believe that their respective plans, intentions and
expectations reflected in or suggested by these forward-looking statements are
reasonable, none of Future Health, Excelera or Seller can assure you that it
will achieve or realize these plans, intentions or expectations. Forward-looking
statements are inherently subject to risks, uncertainties and assumptions.
Forward-looking statements generally relate to future events or future financial
or operating performance. In some cases, you can identify forward-looking
statements because they contain words such as "may," "will," "should," "expect,"
"plan," "anticipate," "could," "intend," "target," "contemplate," "believe,"
"estimate," "predict," "potential," or "continue" or the negative of these words
or other similar terms or expressions that concern Future Health, Excelera or
Seller's expectations, strategy, plans or intentions. Forward-looking statements
contained in this Current Report on Form 8-K include statements about:
? the anticipated benefits of the Business Combination;
? the ability of Future Health, Excelera and the Seller to complete the Business
Combination, including satisfaction or waiver of the conditions to the Business
Combination;
? the anticipated costs associated with the proposed Business Combination;
? Excelera's financial and business performance following the Business
Combination, including financial projections and business metrics;
? Excelera's ability to effectively grow and to effectively expand operations;
? the potential business or economic disruptions caused by current and future
pandemics, such as the COVID-19 pandemic;
? the ability to obtain and/or maintain the listing of Future Health's common
stock and the warrants on Nasdaq, and the potential liquidity and trading of
its securities;
? the risk that the proposed Business Combination disrupts current plans and
operations of Excelera as a result of the announcement and consummation of the
proposed Business Combination;
? the ability to recognize the anticipated benefits of the proposed Business
Combination, which may be affected by, among other things, competition, the
ability of the combined company to grow and manage growth profitably, and
retain its key employees;
? changes in applicable laws or regulations;
? Excelera's ability to raise financing in the future;
? Excelera's officers and directors allocating their time to other businesses and
potentially having conflicts of interest with Excelera's business or in
approving the Business Combination;
? the projected financial information, growth rate, strategies, and market
opportunities for Excelera;
? Excelera's ability to successfully expand in its existing markets and into new
markets;
? Exelera's ability to provide physicians with precision medicine insights and
financial resources;
? Excelera's ability, assessment of and strategies to compete with its
competitors;
? the success of Excelera's marketing strategies;
? Excelera's ability to attract and retain talent and the effectiveness of its
compensation strategies and leadership;
? general economic conditions and their impact on demand for the Excelera
platform;
? Excelera's ability to maintain its licenses and operate in regulated
industries;
? Excelera's ability to prevent and guard against cybersecurity attacks;
? Excelera's reliance on third party service providers for processing payments,
web and mobile operating systems, software, background checks, and insurance
policies;
? seasonal sales fluctuations;
? Excelera's future capital requirements and sources and uses of cash;
? the outcome of any known and unknown litigation and regulatory proceedings,
including the occurrence of any event, change or other circumstances, including
the outcome of any legal proceedings that may be instituted against Future
Health, Excelera and Seller following the announcement of the Business
Combination Agreement and the transactions contemplated therein, that could
give rise to the termination of the Business Combination Agreement;
? Excelera's ability to maintain and protect its brand and its intellectual
property; and
? other factors detailed under the section entitled "Risk Factors" in the proxy
statement or the Registration Statement on Form S-4 to be filed in connection
with the Business Combination.
The forward-looking statements contained herein are based on current
expectations and beliefs concerning future developments and their potential
effects on Future Health and/or Excelera. There can be no assurance that future
developments affecting Future Health and/or Excelera will be those that Future
Health and/or Excelera have anticipated. These forward-looking statements
involve a number of risks, uncertainties (some of which are beyond our control
or the control of Excelera), or other assumptions that may cause actual results
or performance to be materially different from those expressed or implied by
these forward-looking statements. These risks and uncertainties include, but are
not limited to, those factors described under the heading "Risk Factors" in the
proxy statement or the Registration Statement on Form S-4 to be filed in
connection with the Business Combination. Should one or more of these risks or
uncertainties materialize, or should any of our assumptions prove incorrect,
actual results may vary in material respects from those projected in these
forward-looking statements. Some of these risks and uncertainties may in the
future be amplified by the potential business or economic disruptions caused by
current and future pandemics, such as the COVID-19 pandemic and there may be
additional risks that we consider immaterial or which are unknown. It is not
possible to predict or identify all such risks. Future Health, Excelera and
Seller undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are filed with this Form 8-K:
Exhibit
Number Description
1.1 Amendment to Underwriting Agreement, dated as of June 13, 2022, by and
between Future Health ESG Corp. and Cantor Fitzgerald & Co.
2.1† Business Combination Agreement, dated as of June 13, 2022, by and
among Future Health ESG Corp., MacArthur Court Acquisition Corp. and
Excelera DCE.
10.1 Subscription Agreement, dated June 13, 2022, by and between Future
Health ESG Corp. and the subscriber thereto.
10.2 Forward Purchase Agreement, dated June 13, 2022, by and between Future
Health ESG Corp. and the buyer thereto.
10.3 Lock-Up Agreement, dated June 13, 2022, by and among Future Health ESG
Corp. and each of the parties signatories thereto.
10.4 Form of Amended and Restated Registration Rights Agreement by and
among Excelera Health, Inc. (f/k/a Future Health ESG Corp.), MacArthur
Court Acquisition Corp., Future Health ESG Associates 1, LLC, and the
other parties signatories thereto.
10.5 Sponsor Stockholder Support Agreement, dated as of June 13, 2022, by
and among Future Health ESG Corp., Excelera DCE, and the other parties
signatories thereto
99.1 Press Release dated June 14, 2022.
104 Cover Page Interactive Data File (the Cover Page Interactive Data File
is embedded within the Inline XBRL document).
† Certain of the exhibits and schedules to this Exhibit have been omitted in
accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish
a copy of all omitted exhibits and schedules to the SEC upon its request.
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