UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K/A

(Amendment No. 1)


☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-39612

5:01 ACQUISITION CORP.

(Exact name of registrant as specified in its charter)


Delaware		85-2790755
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

501 Second Street San Francisco, California (Address of principal executive offices)		94107 (Zip Code)

(415) 993-8570

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common Stock, par value $0.0001 per share	FVAM	The Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☒ No ☐

The registrant was formed on August 31, 2020 and therefore it cannot calculate the aggregate market value of its voting and non-voting common equity held by non-affiliates as of June 30, 2020. The registrant’s Class A common stock began trading on the Nasdaq Capital Market on October 14, 2020. The aggregate market value of Class A common stock held by non-affiliates of the registrant based upon the closing sale price of the Class A common stock on December 31, 2020, as reported on The Nasdaq Capital Market, was approximately $84.0 million.

As of December 8, 2021, a total of 8,621,399 shares of Class A common stock, par value $0.0001 per share, were issued and outstanding, and 2,064,068 shares of Class B common stock, par value $0.0001 per share, were issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

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TABLE OF CONTENTS

		Page
	PART I
Item 1.	Business	1
Item 1A.	Risk Factors	15
Item 1B.	Unresolved Staff Comments	41
Item 2.	Properties	41
Item 3.	Legal Proceedings	41
Item 4.	Mine Safety Disclosures	41
	PART II
Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	42
Item 6.	Selected Financial Data	42
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 8.	Financial Statements and Supplementary Data	47
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	47
Item 9A.	Controls and Procedures	48
Item 9B.	Other Information	49
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	50
Item 11.	Executive Compensation	56
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	57
Item 13.	Certain Relationships and Related Transactions, and Director Independence	58
Item 14.	Principal Accounting Fees and Services	61
	PART IV
Item 15.	Exhibits, Financial Statement Schedules	63
Item 16.	Form 10-K/A Summary	F-17

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EXPLANATORY NOTE

References to the “Company,” “our,” “us” or “we” refer to 5:01 Acquisition Corp., a blank check company incorporated on company incorporated in Delaware on August 31, 2020. References to our “Sponsor” refer to 5:01 Acquisition LLC, an entity affiliated with two of our directors, or the Sponsor.

This Amendment No. 1 ("Amendment No. 1") to the Annual Report on Form 10-K/A amends the Annual Report on Form 10-K of 5:01 Acquisition Corp. for the period from August 31, 2020 (inception) through December 31, 2020, as filed with the Securities and Exchange Commission ("SEC") on March 17, 2021 (the "Original Filing")

The Company has re-evaluated the Company’s application of ASC 480-10-S99-3A to its accounting classification of the Class A common stock, par value $0.0001 per share, sold in the Company’s initial public offering (the “IPO”) on October 16, 2020 and upon exercise of the underwriters’ over-allotment option (collectively, the “Public Shares”). Historically, a portion of the outstanding Public Shares was classified as permanent equity to maintain stockholders’ equity greater than $5,000,000 on the basis that the Company will not redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as described in the Company’s amended and restated certificate of incorporation (the “Charter”). Pursuant to such re-evaluation, the Company has determined that the Public Shares include certain provisions that require classification of all of the Public Shares as temporary equity regardless of the net tangible assets redemption limitation contained in the Charter. In addition, in connection with the change in presentation for the Public Shares, the Company determined it should restate its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares share pro rata in the income and losses of the Company.

Therefore, on December 6, 2021, the audit committee of the Company’s board of directors (the “Audit Committee”) concluded, after discussion with the Company’s management, that the Company’s previously issued (i) audited balance sheet as of October 16, 2020 (the "Post IPO Balance Sheet"); (ii) audited financial statements included in the Annual Report on Form 10-K for the period from August 31, 2020 (inception) through December 31, 2020, filed with the SEC on March 17, 2021 (“2020 Form 10-K”); (iii) unaudited condensed financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on May 7, 2021; (iv) unaudited condensed financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the SEC on August 11, 2021; and (v) Note 2 to the unaudited interim financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, filed with the SEC on November 10, 2021 (collectively, the “Affected Periods”), should be restated to report all Public Shares as temporary equity and restate earnings per share and should no longer be relied upon. As such, the Company will restate its financial statements for the Affected Periods in this Form 10-K/A for the Post IPO Balance Sheet and the Company's audited financial statements included in the 2020 Form 10-K, and the unaudited condensed financial statements for the periods ended March 31, 2021 and June 30, 2021 in the Company’s amended Quarterly Report on Form 10-Q/A for the quarterly period ended September 30, 2021, to be filed with the SEC (the “Q3 Form 10-Q/A”).

The restatement does not have an impact on its cash position and cash held in the trust account established in connection with the IPO (the “Trust Account”).

The Company’s management has concluded that a material weakness remains in the Company’s internal control over financial reporting and that the Company’s disclosure controls and procedures were not effective. The Company’s remediation plan with respect to such material weakness will be described in more detail in Item 9A of Part II to this Amendment No. 1.

We are filing this Amendment No. 1 to amend and restate the Original Filing with modification as necessary to reflect the restatements. The following items have been amended to reflect the restatements:

Part I, Item 1A. Risk Factors

Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations

Part II, Item 8. Financial Statements and Supplementary Data

Part II, Item 9A. Controls and Procedures

In addition, the Company’s principal executive officer and principal financial officer have provided new certifications dated as of the date of this filing in connection with this Form 10-K/A (Exhibits 31.1, 31.2 and 32.1).

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Except as described above, no other information included in the Original Filing is being amended or updated by this Amendment No. 1 and, other than as described herein, this Amendment No. 1 does not purport to reflect any information or events subsequent to the Original Filing.

We have not amended our previously filed Post IPO Balance Sheet, dated October 16, 2020, filed on a Current Report on Form 8-K on October 22, 2020. This Amendment No. 1 continues to describe the conditions as of the date of the Original Filing and, except as expressly contained herein, we have not updated, modified or supplemented the disclosures contained in the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing and with our filings with the SEC subsequent to the Original Filing.

This Annual Report on Form 10-K contains statistical data, estimates and forecasts that are based on independent industry publications or other publicly available information, as well as other information based on our internal sources. While we believe the industry and market data included in this report are reliable and are based on reasonable assumptions, these data involve many assumptions and limitations, and you are cautioned not to give undue weight to these estimates. While we are not aware of any misstatements regarding any such third-party information presented in this report, we have not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information. None of the industry publications referred to in this report were prepared on our or on our affiliates’ behalf or at our expense. Our business is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in Item 1A. “Risk Factors,” which could cause results to differ materially from those expressed in these publications and other publicly available information.

The sources of certain statistical data, estimates and forecasts contained in this report are the following independent industry publications or reports: EvaluatePharma® World Preview 2020, Outlook to 2026, July 2020, Evaluate Ltd, and www.pitchbook.com, accessed March 4, 2021, PitchBook Data, Inc.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Annual Report on Form 10-K/A, which reflect our current views with respect to future events and financial performance, and any other statements of a future or forward- looking nature, constitute “forward-looking statements” for the purpose of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this report may include, for example, statements about:

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our ability to complete our initial business combination;

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our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

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our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination, as a result of which

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they would then receive expense reimbursements;

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our potential ability to obtain additional financing to complete our initial business combination;

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our pool of prospective target businesses;

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the ability of our officers and directors to generate a number of potential investment opportunities;

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the ability to have our securities continue to be listed on Nasdaq, including following a business combination;

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our public securities’ potential liquidity and trading;

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our ability to consummate an initial business combination despite the continued uncertainty resulting from the ongoing COVID-19 pandemic or the outbreak of other infectious diseases;

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the potential market for our securities; or

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our financial performance.

The forward-looking statements contained in this Annual Report on Form 10-K/A are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in Item 1A. “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward- looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these

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statements as predictions of future results. Our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

iii

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RISK FACTOR SUMMARY

Investing in our Class A common stock involves a high degree of risk. Below is a summary of material factors that make an investment in our securities speculative or risky. Importantly, this summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, as well as other risks that we face, can be found under Item 1A. “Risk Factors.”

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We have identified a material weakness in our internal control over financial reporting. This material weakness could continue to adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.

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We are a newly formed blank check company at an early stage with no operating history and no revenues, and our stockholders have no basis on which to evaluate our ability to achieve our business objective.

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Past performance by 5AM Venture Management, LLC, or 5AM, including our management team, may not be indicative of future performance of an investment in us.

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Because we intend to seek a business combination with a target business in the healthcare industry, we expect our future operations to be subject to risks associated with the healthcare industry.

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The requirement that the target business or businesses that we acquire must satisfy the 80% of net assets test at the time of the agreement to enter into the initial business combination may limit the type and number of companies with which we may complete such a business combination.

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The holders of our public shares, or our public stockholders, may not be afforded an opportunity to vote on our proposed business combination, which means we may consummate our initial business combination even though a majority of our public stockholders do not support such a combination.

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If we seek stockholder approval of our initial business combination, our sponsor, directors and officers have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.

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The only opportunity for our stockholders to affect the investment decision regarding a potential business combination may be limited to the exercise of their rights to redeem their shares from us for cash unless we seek stockholder approval of such business combination.

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The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into our initial business combination with a target.

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We may not be able to consummate our initial business combination within the required time period, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.00 per share, or less than such amount in certain circumstances.

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Management’s flexibility in identifying and selecting a prospective acquisition candidate, along with our management’s financial interest in consummating our initial business combination, may lead management to enter into an acquisition agreement that is not in the best interests of our stockholders.

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Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.

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PART I

ITEM 1. BUSINESS.

Introduction

We are a newly organized blank check company incorporated in August 2020 as a Delaware corporation whose primary business purpose is to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to as our initial business combination. We have not selected any potential business combination target and we have not generated any operating revenues to date and we do not expect that we will generate operating revenues until we consummate our initial business combination.

We intend to initially focus on industries that complement our management team’s background, and to capitalize on the ability of our management team to identify and acquire a business. In particular, we intend to target early stage North American or European companies in the biotechnology sector of the healthcare industry where our management has extensive investment and operational experience. We may also pursue a transaction in which our stockholders immediately prior to the completion of our initial business combination would collectively own a minority interest in the post-business combination company.

Our Founders

Our sponsor is an affiliate of 5AM Venture Management, LLC, or 5AM, a leading venture capital firm focused on building next-generation life science companies solving important healthcare needs with cutting- edge breakthroughs in medicine and science. Founded in 2002, 5AM has invested over $1.2 billion in 88 companies across biotechnology, drug delivery technology and other life sciences sectors of the healthcare industry, with 48 active investments in its portfolio. We believe that 5AM’s track record of investing in early stage companies that subsequently are acquired or complete initial public offerings, or IPOs, at a preclinical or early clinical stage indicates that early stage investing is a “sweet spot” for 5AM. 5AM’s portfolio companies aim to spearhead novel approaches to prevent and treat a wide range of medical conditions. As of the date of the Annual Report on Form 10-K, the U.S. Food and Drug Administration, or FDA, had approved, cleared or authorized 15 products that were developed by 5AM portfolio companies, and 5AM’s portfolio companies have enrolled over 50,000 patients in more than 35 clinical trials.

5AM’s 27 in-house investment professionals, venture partners and advisors possess strong scientific, medical, operational, legal and finance expertise. The 5AM team combines the talents of established venture capitalists, entrepreneurs, operating executives and leading scientists. Outside of their engagement with 5AM, 5AM’s team members have served as senior executives, chairpersons, board members, employees and/or advisors at life science companies such as Affymax, Affymetrix, Aileron Therapeutics, Akcea Therapeutics, Alkermes, Amgen, Blueprint Medicines, Bristol Myers Squibb, Catalytica Pharmaceuticals, Cubist Pharmaceuticals, CV Therapeutics, Editas Medicine, F. Hoffmann-La Roche, Genentech, GlaxoSmithKline, Heptares Therapeutics, Ingenuity Systems, LJL BioSystems, Merck & Co., Millennium Pharmaceuticals, Moderna Therapeutics, Novartis, Novo Nordisk, Nurix Therapeutics, Nycomed Salutar, Praxis Precision Medicines, Proteostasis Therapeutics, PTC Therapeutics, Relay Therapeutics, Sage Therapeutics, Sanofi Genzyme, Stemcentrx, uniQure, Verge Genomics and XenoPort. Most 5AM team members have forged long working relationships together and their mutual respect and cohesiveness is vital to 5AM’s long-term performance.

The 5AM team has compiled a long-term record as operating executives, scientists, and investment professionals in the life science industry and has invested in several successful, innovative and valuable life science companies. Since its inception in 2002 through the date of the Annual Report on Form 10-K, 5AM has delivered strong performance across its funds through investments in 88 private companies across biotechnology, drug delivery technology and other life sciences sectors, of which 18 companies have been acquired and 18 companies have successfully completed their IPOs. Of the 18 companies that have successfully completed their IPOs, 5AM Ventures team members hold or have held Chairman or director roles in 14 of these companies after going public. Recent representative investments include: Akouos (Nasdaq: AKUS), Aprea Therapeutics (Nasdaq: APRE), Artiva Biotherapeutics, Arvinas (Nasdaq: ARVN), Audentes Therapeutics

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(Nasdaq: BOLD, prior to acquisition by Astellas Pharma for approximately $3.0 billion), BlueLight Therapeutics, Cabaletta Bio (Nasdaq: CABA), Cidara Therapeutics (CDTX), Cleave Therapeutics, CinCor Pharma, Crinetics Pharmaceuticals (Nasdaq: CRNX), EnLiven Therapeutics, Entrada Therapeutics, Escient Pharmaceuticals, Expansion Therapeutics, Faraday Pharmaceuticals, Homology Medicines (Nasdaq: FIXX), Ideaya Biosciences (Nasdaq: IDYA), Impel NeuroPharma, Kinaset Therapeutics, Neurogastrx, Nido Biosciences, NodThera, Nouscom, Novome, Novira Therapeutics (which was acquired by Johnson & Johnson for an undisclosed sum), Pearl Therapeutics (which was acquired by AstraZeneca for up to $1.15 billion), Pear Therapeutics, RallyBio, Relypsa (Nasdaq: RLYP, prior to acquisition by Galenica for approximately $1.5 billion), scPharmaceuticals (Nasdaq: SCPH) and Vor Biopharma (Nasdaq: VOR).

Our Management Team

Members of our management team have spent most of their careers investing in the life science industry and have worked together over many years to help create stockholder value for 5AM’s portfolio companies. We believe that our management team is well-positioned to take advantage of the growing set of acquisition and investment opportunities within the biotechnology sector. Our management team (including our board members) have extensive experience in the sector as executives and directors for both publicly-listed and privately-owned companies. We believe our management team’s and directors’ experience with acquisitions, divestitures, corporate strategy and implementation will significantly benefit us as we evaluate potential acquisition or merger candidates. See Item 10 “Directors, Executive Officers and Corporate Governance” for more information regarding our management team.

The past performance of the members of our management team, 5AM or their respective affiliates is not a guarantee that we will be able to identify a suitable candidate for our initial business combination or of success with respect to any initial business combination we may consummate. You should not rely on the historical record of the performance of our management, 5AM or any of their respective affiliates’ or managed funds’ performance as indicative of our future performance.

Competitive Advantages

We believe that our management team is well-positioned within the biotechnology sector to identify potential opportunities for the reasons outlined below:

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Track Record of Success: Members of our management team have established long-term track records as operating executives, scientists, and investment professionals in the biotechnology industry and have invested in several successful, innovative and valuable biotechnology companies. Since its inception in 2002 through the date of the Annual Report on Form 10-K, 5AM has delivered strong performance across its funds through investments in 88 private companies across biotechnology, drug delivery technology and other life sciences sectors, of which 18 companies been acquired and 18 companies have successfully completed their IPOs.

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Extensive Transaction Sourcing: We believe our management team has access to high-quality deal flow, due in large part to their broad range of industry contacts, 5AM’s high profile in the biotechnology venture community and 5AM’s entrepreneurial scientific advisors. We place great emphasis on building and maintaining relationships throughout the global biotechnology industry (with executives, entrepreneurs, researchers, academics, venture capitalists, attorneys and bankers), which we believe will potentially give us access to attractive deal flow for a potential initial business combination. We expect our management team’s reputation at 5AM for having a well-defined focus and deep industry expertise will also attract referrals from industry colleagues. 5AM’s team sources, reviews and builds relationships with hundreds of early stage private investments every year. Many of these companies may not be known to late stage or public investors, and thus we believe our management team is in a strong position to identify attractive early stage investment and acquisition opportunities due to our relationship with 5AM.

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Driving Value Creation Through Hands-on Involvement: 5AM and our management team have a history of working closely with portfolio companies as “operator friendly” company builders. The in-house 5AM team assists its portfolio company management teams by providing business, scientific, financial, intellectual property, recruiting and deal-making advice and often takes a hands-on approach to help devise strategic plans and drive stockholder

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value. We believe that input into operating plans, strategy and portfolio company management team development has a major impact on creating and realizing stockholder value. We believe that our management team’s blend of operating and investment experience will help us identify transformational technologies and subsequently assist companies in maximizing their potential value. Further, 5AM’s and our management team’s experience in building teams and shaping strategy provides us with deep experience in pursuing early stage acquisition targets, with potentially broad platform technologies.

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Broad Experience Across Private and Public Markets: 5AM has an established track record investing out of its six early stage life sciences venture capital funds as well as its first fund targeting investments in later stage private companies, called 5AM Opportunities I. 5AM Opportunities I was raised in 2018, and as of December 31, 2020, has generated strong returns, based on its portfolio of investments in five publicly traded companies and six late clinical-stage privately held companies. Over the past four years, nine 5AM portfolio companies have completed a successful IPO, leading to meaningful realized and unrealized returns, as of December 31, 2020. During their time at 5AM, current 5AM team members have served as directors on the board for 14 biotechnology companies that successfully completed IPOs.

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Deep Relationships Across the Biotechnology Ecosystem: 5AM maintains extensive relationships with senior business development and R&D leadership across the biotechnology ecosystem, which we believe provides important access to high quality deal flow, top level talent, and significant insights into industry trends. Further, we believe that these relationships are attractive for potential portfolio companies because they may provide portfolio companies access to direct communication with senior leadership throughout the industry, allowing 5AM’s portfolio companies to explore potential strategic opportunities and exits. Companies affiliated with 5AM access the firm’s network of senior leadership through regular events including 5AM’s Portfolio Day attended by heads of business development from many major pharmaceutical companies, and the rEVOLUTION Symposium attended by senior R&D leadership of several biotechnology companies. Multiple 5AM portfolio therapeutics companies have been acquired by strategic purchasers, including by Amgen, Astellas Pharma, AstraZeneca, Biotie, EntreMed, Johnson & Johnson, Mallinckrodt Pharmaceuticals, Novo Nordisk, Roche, Takeda Pharmaceutical, The Medicines Company, Vifor Pharma, and WuXi AppTec.

Acquisition Strategy

We believe that our management team is well-positioned to identify attractive acquisition opportunities as a result of our reputation, experience and track record of successful investments. Our acquisition strategy is to identify an attractive opportunity within our target industry that offers attractive risk-adjusted equity returns for our stockholders.

As an affiliate of 5AM, we benefit from our access to 5AM’s infrastructure, in-house personnel, network and relationships. The 5AM team reviews hundreds of potential targets annually, with as many as 10 targets in active due diligence at a time. 5AM’s intensive due diligence efforts can range in duration from weeks to months and evaluate substantially all aspects of a potential target, including scientific, development, competitive, financial, management, deal structure and intellectual property assessments. 5AM’s ability to track companies supports identification of companies that our management is familiar with, that have raised venture capital financing and that may benefit from accessing the public markets. Further, we believe that the size of our offering will support a focus on companies which fall in 5AM’s “sweet spot” of investing and will differentiate us from larger special purpose acquisition companies, or SPACs, that may focus on later stage opportunities.

We believe that certain biotechnology companies will see material benefits from being publicly-traded, including greater access to capital, and more liquid securities. Based on 5AM’s and our management team’s experience as active participants in private financings and subsequent IPOs, we believe that we can provide a potential acquisition target with a fast and efficient path to going public by potentially combining a crossover financing and public offering into a single transaction, with a known investor syndicate and acquisition price negotiated upfront. Further, some SPAC merger events may include earnouts, and we believe that in some cases, the use of earnouts in SPAC merger events may positively distinguish merging with a SPAC from traditional IPOs, and may provide greater flexibility in pursuing early stage companies, while also

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providing assurance that investors and other equity holders in the private company can participate in the value creation through the granting of additional equity.

We have identified the following criteria to evaluate prospective target businesses, although we may decide to enter into our initial business combination with a target business that does not meet these criteria. We intend to acquire one or more companies that we believe exhibit the following qualities:

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Scientifically Differentiated: companies that are built on cutting-edge technologies and grounded in breakthrough science, specifically companies that are based on novel treatment modalities.

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Early Stage Companies: companies that have either (i) not established human proof-of-concept in clinical trials, but offer strong mechanistic rationale and preclinical data to support our conviction in future success and meaningful value creation, or (ii) established early clinical human proof-of- concept.

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Addressing High Unmet Needs: companies addressing areas of significant unmet medical need that also represent meaningful commercial opportunities.

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Providing Significant Benefits to Patients: companies developing therapies that have the potential to alter or significantly enhance the treatment paradigm for patients and physicians.

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Unique Competitive Positioning: companies developing therapies that are well-positioned to be potential “best-in-class” or “first-in-class” therapies in their respective categories and are expected to maintain a competitive advantage in the long-term.

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Risk Diversification: companies with novel technology platform(s) or multiple assets under development that would offer risk diversification and opportunity to realize value inflection through multiple avenues.

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Value Arbitrage: companies with embedded or under-capitalized growth opportunities that are not widely recognized.

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Experienced Management Team: companies led by strong management and scientific teams that provide a platform for us to further develop the target’s management capabilities.

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Benefit from Being a Public Company: companies that would benefit from being publicly traded and can effectively utilize the broader access to capital and the public profile that are associated with being a publicly traded company.

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Experienced Investor Base: companies that have been funded to date by experienced biotechnology investors including venture capitalists, pharmaceutical companies and other institutional investors who have also provided strategic inputs to the company.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this report, would be in the form of proxy materials or tender offer documents, as applicable, that we would file with the Securities and Exchange Commission, or SEC.

Industry Opportunity

We believe that the biotechnology industry represents a significant and growing target market with a large number of potential acquisition opportunities. We believe that our investment strategy seeks to capitalize on the macro-environmental

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trends within the biotechnology industry. We believe that the biotechnology industry is attractive for a number of reasons, including:

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Large and Growing End Markets: Global prescription drug sales are expected to grow from approximately $870 billion in 2019 to over $1.4 trillion in 2026, according to EvaluatePharma^®World Preview 2020 report from July 2020 by Evaluate Ltd., driven by an aging population, increased prevalence of chronic disease and improved access to healthcare.

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Medical Breakthroughs and Innovation: There has been a significant acceleration of medical research in recent years, leading to a better understanding of the molecular origins of disease and the identification of new potential targets for therapeutic intervention. The biotechnology industry has also recently experienced an acceleration in discovery and validation of novel emerging treatment modalities such as genetic medicines and cell therapy, among others. Significant breakthroughs in medicine and science are leading to attractive investment opportunities.

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Strong Equity Market Environment: New biotechnology companies have been created at a significant pace over recent years, with a total of about 300 biotechnology companies completing IPOs in the United States between 2015 and 2020. Despite the equity market volatility resulting from the COVID-19 pandemic, 2020 was a record year for biotechnology companies completing IPOs with more than $13.5 billion of capital raised in 81 IPOs and $41 billion of capital raised in 258 follow-ons, according to an analyst report.

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Need for External Innovation at Larger Pharmaceutical Companies: Large and mid-cap pharmaceutical companies have become avid acquirers of biotechnology companies. They not only have the resources to acquire smaller biotechnology companies, but also the need to replenish their pipelines via external innovation. This has resulted in over 1,900 mergers and acquisition transactions within the biotechnology industry since 2015 through 2020, totaling more than $920 billion during this time period, according to data made available by PitchBook Data, Inc.

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Supportive Regulatory Environment: The significant pace of innovation is also reflected in the FDA’s recent drug approval rates, which have increased from 182 drug approvals in the five-year period from 2011 to 2015, to 228 drug approvals in the five year period from 2016 to 2020, reaching an all-time high in 2018.

We believe early stage biotechnology companies will be significant creators of the future generations of medicines, and that we are well-positioned to benefit from this value creation via our investment and acquisition strategy.

Effecting a Business Combination

General

We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following our IPO. We intend to effectuate our initial business combination using cash from the proceeds of our IPO offering and the private placement, additional placements of our shares, new debt, or a combination of these, as the consideration to be paid in our initial business combination. We may seek to consummate our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth (such as a company that is preclinical and is not yet at the stage of commercial sales and marketing), which would subject us to the numerous risks inherent in such companies and businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal operations.

If our initial business combination is paid for using shares or debt securities, or not all of the funds released from the trust account are used for payment of the purchase price in connection with our business combination or used for redemptions of purchases of our common stock, we may apply the cash released to us from the trust account that is not applied to the purchase price for general corporate purposes, including for maintenance or expansion of operations of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating our initial business combination, to fund the purchase of other companies or for working capital.

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5AM is continuously made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we will not consider a business combination or co-investment opportunity with any company that has already been selected by 5AM as a suitable candidate for it, unless 5AM, in its sole discretion, declines such potential business combination or makes available to our company a co-investment opportunity in accordance with 5AM’s applicable existing and future policies and procedures.

We may seek to raise additional funds through a private offering of debt or equity securities in connection with the consummation of our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust account. Subject to compliance with applicable securities laws, we would consummate such financing only simultaneously with the consummation of our business combination. In the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by law or Nasdaq, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise.

In addition, our sponsor has indicated an interest to purchase $25,000,000 of our shares of Class A common stock in a private placement that would occur concurrently with the consummation of our initial business combination. However, because indications of interest are not binding agreements or commitments to purchase, our sponsor may determine not to purchase any such shares, or to purchase fewer shares than it has indicated an interest in purchasing. Furthermore, we are not under any obligation to sell any such shares. If we sell shares of Class A common stock to our sponsor (or any other investor) in connection with our initial business combination, the equity interest of investors in the combined company may be diluted and the market prices for our securities may be adversely affected. In addition, if the per share trading price of our shares of Class A common stock is greater than the price per share paid in the private placement, the private placement will result in value dilution to you.

Sources of Target Businesses

We anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment bankers, venture capital funds, private equity groups, leveraged buyout funds, management buyout funds and other members of the financial community. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources also may introduce us to target businesses in which they think we may be interested on an unsolicited basis, because many of these sources will have read this report and know what types of businesses we are targeting. Our officers and directors, as well as their affiliates, also may bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conferences. In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the business relationships of our officers and directors. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best

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interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. Although some of our officers and directors may enter into employment or consulting agreements with the acquired business following our initial business combination, the presence or absence of any such arrangements will not be used as a criterion in our selection process of an acquisition candidate.

We are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with 5AM, our sponsor, founders, officers or directors. In the event we seek to complete our initial business combination with such a company, we have agreed not to consummate our initial business combination with an entity that is affiliated with any of the foregoing, unless we have obtained (i) an opinion from an independent investment banking or accounting firm as to the fair market value of the target business and that the business combination is fair to our unaffiliated stockholders from a financial point of view, (ii) the approval by our audit committee and (iii) the approval of a majority of our disinterested and independent directors. In no event will our sponsor or any of the members of our management team be paid any finder’s fee, consulting fee or other similar compensation prior to, or for any services they render in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is).

Selection of a Target Business and Structuring of a Business Combination

Subject to the requirement that our initial business combination must satisfy the 80% of net assets test at the time of the agreement to enter into such initial business combination, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses. In any case, we will only consummate an initial business combination in which we become the majority stockholders of the target (or control the target through contractual arrangements in limited circumstances for regulatory compliance purposes as discussed below) or are otherwise not required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act, or to the extent permitted by law we may acquire interests in a variable interest entity, in which we may have less than a majority of the voting rights in such entity, but in which we are the primary beneficiary. There is no basis for investors to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business combination. To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth (such as a company that is preclinical and is not yet at the stage of commercial sales and marketing), we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we may not properly ascertain or assess all significant risk factors.

In evaluating a prospective target business, we expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of potential or actual customers and suppliers, inspection of facilities, as well as a review of financial and other information which will be made available to us.

The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which a business combination is not ultimately completed will result in our incurring costs and will reduce the funds we can use to complete another business combination. We will not pay any finder’s or consulting fees to members of our management team, or any of their respective affiliates, for services rendered to or in connection with our initial business combination.

Fair Market Value of Target Business or Businesses

The target business or businesses or assets with which we effect our initial business combination must satisfy the 80% of net assets test at the time of the agreement to enter into such initial business combination. If we acquire less than 100% of one or more target businesses in our initial business combination, the aggregate fair market value of the portion or portions we acquire must satisfy the 80% of net assets test at the time of the agreement to enter into such initial business combination. However, we will always acquire at least a controlling interest in a target business. The fair market value of a portion of a target business or assets will likely be calculated by multiplying the fair market value of the entire business by the percentage of the target we acquire. We may seek to consummate our initial business combination with an initial target business or

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businesses with a collective fair market value in excess of the balance in the trust account. In order to consummate such an initial business combination, we may issue a significant amount of debt, equity or other securities to the sellers of such business and/or seek to raise additional funds through a private offering of debt, equity or other securities. If we issue securities in order to consummate such an initial business combination, our stockholders could end up owning a minority of the combined company’s voting securities as there is no requirement that our stockholders own a certain percentage of our company (or, depending on the structure of the initial business combination, an ultimate parent company that may be formed) after our business combination. Because we have no specific business combination under consideration, we have not entered into any such arrangement to issue our debt or equity securities and have no current intention of doing so.

The fair market value of a target business or businesses or assets will be determined by our board of directors based upon standards generally accepted by the financial community, such as actual and potential gross margins, the values of comparable businesses, earnings and cash flow, book value, enterprise value and, where appropriate, upon the advice of appraisers or other professional consultants. Investors will be relying on the business judgment of our board of directors, which will have significant discretion in choosing the standard used to establish the fair market value of a particular target business. If our board of directors is not able to independently determine the fair market value of the target business or businesses, or we are considering an initial business combination with an affiliated entity, we will obtain an opinion from an independent investment banking or accounting firm as to the fair market value of the target business or an independent valuation or accounting firm with respect to the satisfaction of such criteria. Notwithstanding the foregoing, unless we consummate a business combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions on the type of target business we seek to acquire, that the price we are paying is fair to our stockholders.

Lack of Business Diversification

For an indefinite period of time after consummation of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By consummating our initial business combination with only a single entity, our lack of diversification may:

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subject us to negative economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and

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cause us to depend on the marketing and sale of a single product or limited number of products or services.

Limited Ability to Evaluate the Target’s Management Team

Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’ management may not prove to be correct. The future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. Consequently, members of our management team may not become a part of the target’s management team, and the future management may not have the necessary skills, qualifications or abilities to manage a public company. Further, it is also not certain whether one or more of our directors will remain associated in some capacity with us following our initial business combination. Moreover, members of our management team may not have significant experience or knowledge relating to the operations of the particular target business. Our key personnel may not remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.

Following our initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We may not have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

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Stockholders May Not Have the Ability to Approve an Initial Business Combination

In connection with any proposed business combination, we will either (1) seek stockholder approval of our initial business combination at a meeting called for such purpose at which public stockholders may seek to have their public shares redeemed, regardless of whether they vote for or against (or vote at all with respect to) the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable) or (2) provide our public stockholders with the opportunity to sell their public shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein. Notwithstanding the foregoing, our initial stockholders have agreed, pursuant to written letter agreements with us, not to exercise redemption rights with respect to any public shares held by them into their pro rata share of the aggregate amount then on deposit in the trust account. If we determine to engage in a tender offer, such tender offer will be structured so that each stockholder may tender any or all of his, her or its public shares rather than some pro rata portion of his, her or its shares. The decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. If we so choose and we are legally permitted to do so, we have the flexibility to avoid a stockholder vote and allow our stockholders to sell their shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act of 1934, as amended, or the Exchange Act, which regulate issuer tender offers. In that case, we will file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination as is required under the SEC’s proxy rules. We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, solely if we seek stockholder approval, a majority of the issued and outstanding shares of common stock voted are voted in favor of the business combination.

We chose our net tangible asset threshold of $5,000,001 to ensure that we would avoid being subject to Rule 419. However, if we seek to consummate an initial business combination with a target business that imposes any type of working capital closing condition or requires us to have a minimum amount of funds available from the trust account upon consummation of such initial business combination, our net tangible asset threshold may limit our ability to consummate such initial business combination (as we may be required to have a lesser number of shares redeemed or sold to us) and may force us to seek third party financing that may not be available on terms acceptable to us or at all. As a result, we may not be able to consummate such initial business combination and we may not be able to locate another suitable target within the applicable time period, if at all. Stockholders may therefore have to wait 24 months from the closing of our IPO in order to be able to receive a pro rata share of the trust account.

Our initial stockholders and our officers and directors have agreed (1) to vote any shares of common stock owned by them in favor of any proposed business combination, (2) not to exercise redemption rights with respect to any shares of common stock in connection with a stockholder vote to approve a proposed initial business combination and (3) not sell any shares of common stock in any tender in connection with a proposed initial business combination. As a result, if we sought stockholder approval of a proposed transaction, we would need only 2,913,541 of our public shares (or approximately 35.3% of our public shares) to be voted in favor of the transaction in order to have such transaction approved (assuming that only a quorum was present at the meeting, that the initial stockholders do not purchase any shares of Class A common stock in the after-market).

If we hold a meeting to approve a proposed business combination and a significant number of stockholders vote, or indicate an intention to vote, against such proposed business combination, our officers, directors, initial stockholders or their affiliates could make such purchases in the open market or in private transactions in order to influence the vote. Notwithstanding the foregoing, our officers, directors, initial stockholders and their affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a company’s stock.

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Redemption/Tender Rights

At any meeting called to approve an initial business combination, public stockholders may seek to exercise redemption rights with respect to their public shares, regardless of whether they vote for or against (or vote at all with respect to) the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account, less any taxes then due but not yet paid; provided that a public stockholder, individually or together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in our IPO. Notwithstanding the foregoing, our initial stockholders have agreed, pursuant to written letter agreements with us, not to exercise redemption rights with respect to any public shares or private shares held by them to receive their pro rata share of the aggregate amount then on deposit in the trust account. If we hold a meeting to approve an initial business combination, holders other than our initial stockholders will always have the ability to vote against a proposed business combination and not seek redemption of their shares.

Alternatively, if we engage in a tender offer, each public stockholder will be provided the opportunity to sell his or her public shares to us in such tender offer. The tender offer rules require us to hold the tender offer open for at least 20 business days. Accordingly, this is the minimum amount of time we would need to provide holders to determine whether they want to sell their public shares to us in the tender offer or remain an investor in our company.

Our initial stockholders, officers and directors will not have redemption rights with respect to any shares of common stock owned by them, directly or indirectly, no matter when acquired.

We may also require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the expiration date set forth in the tender offer documents mailed to such holders, or in the event we distribute proxy materials, up to two business days prior to the vote on the proposal to approve the business combination or amendment to our amended and restated certificate of incorporation (1) that would modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our IPO or (2) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, or to deliver their shares to the transfer agent electronically using the DWAC System, at the holder’s option. The proxy solicitation materials that we will furnish to stockholders in connection with the vote for any proposed business combination will indicate whether we are requiring stockholders to satisfy such delivery requirements. Accordingly, a stockholder would have from the time our proxy statement is mailed through the vote on the business combination to deliver his or her shares if he or she wishes to seek to exercise his or her redemption rights. Under Delaware law and our bylaws, we are required to provide at least 10 days’ advance notice of any stockholder meeting, which would be the minimum amount of time a stockholder would have to determine whether to exercise redemption rights. As a result, if we require public stockholders who wish to have their shares of Class A common stock redeemed to receive a pro rata portion of the funds in the trust account to comply with the foregoing delivery requirements, holders may not ha

SEC Form 10-K/A filed by 5:01 Acquisition Corp. (Amendment)