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Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Research from Water Tower Research

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Thematic (Sector/Industry)

Multiple Countries / Thematic (Sector/Industry)

<h3>KEY HIGHLIGHTS</h3>
<ul>
<li>More of the same as 2023 begins.&nbsp;The SPAC IPO market continues to run on a very slow drip, but we do at least have one pricing to report. On January 13, 2023, Israeli technology-focused SPAC Israeli Acquisitions Corp. (ISRLU) became the first SPAC IPO to be priced in 2023, raising $125 million, which is at the higher end of recent gross proceeds raised. Meanwhile, there have been no new SPAC IPO registrations filed since December 7, 2022, and four registration withdrawals so far this month, leaving the pipeline of pending SPAC IPOs at 71, the lowest number since before 2021. SPACs continue to liquidate, with three completed so far in January. Another six SPACs are slated to liquidate before the end of the month.</li>
<li>IBC deal activity.&nbsp;We are seeing more activity with respect to SPAC IBC deals, continuing the trend of the past six months. As of writing, 10 IBC deals have been penned in January, but deal size continues to shrink, with the average IBC value at ~$230 million, or around one-third of the average deal value ($645 million) recorded for 2022. There have also been a couple of deal terminations to report: DTRT’s $681 million combination with home healthcare company Consumer Direct Holdings and IGAC’s $400 million merger with fantasy sports online betting platform PlayUp. SPAC IGAC proceeded to liquidate its trust on January 11.</li>
<li>De-SPAC me once, De-SPAC me twice.&nbsp;Our SPAC Talk Focus this week continues with the theme of value hunting in the ravaged de-SPAC sector. The latest post de-SPACing transaction has a new twist. In fact, it is not a straight buyout, but a merger involving another SPAC. On January 10, 2023, SPAC USCT announced that it intends to merge with vehicle data provider WEJO. Will more SPACs join the fray of bargain hunters in and among the de-SPAC wreckage?</li>
</ul>
<h2>SPAC STATISTICS</h2>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/870/original/image_53263976921673657425205.png?1673657428" class="editor-image img-responsive" data-smartkarma-image-id="319870"></figure>
<div class="content-remarks">
<p>Source: WTR</p>
</div>
<h2>SPAC HAPPENINGS IN JANUARY 2023</h2>
<p>Figure 1: IPO Pricings/Completed Liquidations</p>
<p>IGAC returned $276 million from its trust to redeeming shareholders in 2022.</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/871/original/image_97594945031673657455459.png?1673657457" class="editor-image img-responsive" data-smartkarma-image-id="319871"></figure>
<div class="content-remarks">
<p>Source: WTR Research</p>
</div>
<p>Figure 2: IBC Announcements/Terminations</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/872/original/image_59828924041673657481892.png?1673657484" class="editor-image img-responsive" data-smartkarma-image-id="319872"></figure>
<div class="content-remarks">
<p>Source: WTR Research</p>
</div>
<p>Figure 3: De-SPACings</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/873/original/image_51547001451673657594506.png?1673657597" class="editor-image img-responsive" data-smartkarma-image-id="319873"></figure>
<div class="content-remarks">
<p>Source: WTR Research</p>
</div>
<h2>SPAC/DE-SPAC RETURNS</h2>
<p>Figure 4: Live IBCs (Initial Business Combinations)—Key Stats</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/874/original/image_48535578261673657622096.png?1673657624" class="editor-image img-responsive" data-smartkarma-image-id="319874"></figure>
<div class="content-remarks">
<p>Source: WTR Research</p>
</div>
<p>Figure 5: Top 5 Live IBCs by Share Price</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/875/original/image_54921007771673657678538.png?1673657679" class="editor-image img-responsive" data-smartkarma-image-id="319875"></figure>
<div class="content-remarks">
<p>Source: WTR Research</p>
</div>
<p>Figure 6: Bottom 5 Live IBCs by Share Price</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/876/original/image_81051910181673657717403.png?1673657718" class="editor-image img-responsive" data-smartkarma-image-id="319876"></figure>
<div class="content-remarks">
<p>Source: WTR Research</p>
</div>
<p>Figure 7: De-SPACs—Key Stats</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/878/original/image_208436697101673657755031.png?1673657756" class="editor-image img-responsive" data-smartkarma-image-id="319878"></figure>
<div class="content-remarks">
<p>Source: WTR Research</p>
</div>
<p>Figure 8: Top 5 De-SPAC Performers by Share Price</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/879/original/image_184459579111673657781013.png?1673657783" class="editor-image img-responsive" data-smartkarma-image-id="319879"></figure>
<div class="content-remarks">
<p>Source: WTR Research</p>
</div>
<p>Figure 9: Bottom 5 De-SPAC Performers by Share Price</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/880/original/image_196660060121673657803405.png?1673657805" class="editor-image img-responsive" data-smartkarma-image-id="319880"></figure>
<div class="content-remarks">
<p>Source: WTR</p>
</div>
<h2>SPAC TALK FOCUS</h2>
<h2>Rummaging through the De-SPAC Wreckage</h2>
<h2>More Bankruptcy Candidates Likely…</h2>
<p>In the de-SPAC world, the two prevalent operative words start with the letter ‘B’ for bankruptcy and buyout. Since last summer, six de-SPACs have filed for bankruptcy, the latest being crypto miner CORZ, which filed voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code on December 21, 2022.</p>
<p>Figure 10: Bankrupt De-SPACs</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/881/original/image_254435582131673657833733.png?1673657835" class="editor-image img-responsive" data-smartkarma-image-id="319881"></figure>
<div class="content-remarks">
<p>Source: WTR</p>
</div>
<p>As the specter of recession in the battle against inflation colors the outlook for 2023, it is probable that more de-SPACs will be forced to look to bankruptcy, particularly among the 59 or one-fifth of those de-SPACed since the start of 2021 currently trading under $1.</p>
<h2>… And More Hidden Gems for the Taking</h2>
<p>During the course of the past year, 11 de-SPAC buyouts have been completed and two other announced post de-SPACing transactions that have yet to close. To be more accurate, most of these buyouts amount to takeunders, with acquisitors taking a trip to the bargain basement to find cheaply valued assets. Excluding biogas producer LFG, which was a rare outperformer among de-SPACs even before BP made its offer, the average buyout price is about two-thirds below the SPAC IPO price of $10.</p>
<p>Figure 11: De-SPAC Buyouts</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/882/original/image_247077381141673657862669.png?1673657864" class="editor-image img-responsive" data-smartkarma-image-id="319882"></figure>
<div class="content-remarks">
<p>Source: WTR</p>
</div>
<p>We have previously commented that as far as de-SPACs are concerned, we may be close to the trough of the disillusionment stage of the hype cycle and, at some point this year, and we may see greater interest from value hunters, whether they be strategic or financial buyers in searching for hidden gems in and among the de-SPAC wreckage. While we have said that the sub-$1 de-SPAC club is likely littered with candidates for bankruptcy, this group may also contain hidden gems that will be targets for acquisitors. This is evident from our list in Figure 11. Five out of the 13 (~40%) buyouts involve de-SPACs that were trading sub-$1 pre-announcement, including the newest transaction involving WEJO.</p>
<h2>WEJO – A Post De-SPACing Transaction with a Difference</h2>
<p>Earlier this week, there was a post de-SPACing transaction announcement with a difference, involving a UK-based vehicle data aggregator. In fact, this is not a buyout, but rather a merger. On January 10, 2023, WEJO that it had entered into a definitive merger agreement with SPAC TKB Critical Technologies I (USCT). WEJO had been de-SPACed in November 2021 in an $800 million combination with another SPAC Virtuoso Acquisition Corp. (formerly VOSO). However, as Figure 12 clearly demonstrates, the IBC has not gone well from a value creation point of view since de-SPACing, with WEJO consistently trading well below $1 since last summer.</p>
<p>Figure 12: WEJO – Once De-SPACed, Twice Not So Shy</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/883/original/image_648482799151673657967380.png?1673657969" class="editor-image img-responsive" data-smartkarma-image-id="319883"></figure>
<div class="content-remarks">
<p>Source: SPAC Research</p>
</div>
<p>In light of WEJO’s proposed business combination with SPAC USCT, WEJO stands to be de-SPACed for the second time. The proposed combination is being structured as a stock-for-stock transaction. At closing of the transaction, each issued and outstanding share and warrant of USCT will be exchanged for the right to receive a number of WEJO common shares and warrants, respectively, based on an exchange ratio calculated by dividing $11.25 per USCT share by the volume weighted average price per WEJO common share for the 15 consecutive trading days immediately preceding the second trading day prior to the date of WEJO’s shareholders’ meeting, subject to a collar range of $0.50-3.00 and exchange ratios of 22.5-3.75. This translates into an implied enterprise value range of ~$122-412 million, with the top end of the range representing about half the valuation announced at the time of the VOSO/WEJO IBC announcement in August 2021.</p>
<p>Figure 13: USCT/WEJO Transaction Overview</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/884/original/image_605877461161673658005237.png?1673658007" class="editor-image img-responsive" data-smartkarma-image-id="319884"></figure>
<div class="content-remarks">
<p>Source: USCT, WEJO Investor Presentation, January 2023</p>
</div>
<p>This transaction is targeted to close in 2Q23 and is expected to bring $100 million of proceeds to WEJO from USCT’s cash in trust and a PIPE. Since USCT held $236 million in trust, as of September 30, 2022, there does seem to be an embedded assumption of a high redemption from the SPAC’s public shareholders ahead of the de-SPACing, but for WEJO, the transaction brings much needed funds as it looks to accelerate its revenue growth trajectory and goal of achieving cash profitability within the next three years. It also brings SPAC sponsors who offer deep financial and operational experience in leading and building scalable and sustainable public and private global technology companies with a solid track record of unlocking shareholder value. Among the sponsors is Angela Blatteis, a former Managing Director and Ambassador at The Gores Group, where she led several high-profile acquisitions and divestitures and co-headed Global Equity Capital at the prolific and reputable SPAC sponsor.</p>
<p>One of the most interesting aspects of this transaction is that it points to an additional pathway for SPACs to secure an IBC. While predominantly targeting private companies, and in a few instances publicly traded OTC companies, this is the first time to the best of our knowledge that a SPAC has targeted a company that has already been de-SPACed. In this instance, although USCT was running against an imminent merger deadline of January 29, 2023, in the WEJO webinar presentation on the transaction, USCT’s Blatteis suggested that WEJO was an excellent fit for USCT, claiming that the company is the on the crux of transforming itself from a pure data aggregator to a value-added solutions and SaaS provider and that this pivot in product mix and services along with better cost containment will lead to a significant expansion in margin accelerating WEJO’s pathway to profitability and cash flow positivity. Blatteis added that she believed that at WEJO’s prevailing equity value, there was huge value upside for investors. While the current projections are toned down somewhat from those presented when WEJO entered into an IBC agreement with VOSO in August 2021, they still indicate a feisty growth trajectory.</p>
<p>Figure 14: WEJO’S Projections, Then and Now</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/319/885/original/image_348128484171673658032871.png?1673658035" class="editor-image img-responsive" data-smartkarma-image-id="319885"></figure>
<div class="content-remarks">
<p>Source: USCT, WEJO Investor Presentation, January 2023, WTR</p>
</div>
<p>We expect the momentum for de-SPAC value hunting either via a buyout or merger will increase in 2023, and we might even see more targetless SPACs jumping into the fray with other bargain hunters.</p>
<h3>DISCLOSURES</h3>
<p>Water Tower Research (“WTR”) is a professional publisher of investment research reports on public companies and, to a lesser extent, private firms (“the Companies”). WTR provides investor-focused content and digital distribution strategies designed to help companies communicate with investors.<br><br>WTR is not a registered investment adviser or a broker/dealer nor does WTR provide investment banking services. WTR operates as an exempt investment adviser under the so called “publishers’ exemption” from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940. WTR does not provide investment ratings / recommendations or price targets on the companies it reports on. Readers are advised that the research reports are published and provided solely for informational purposes and should not be construed as an offer to sell or the solicitation of an offer to buy securities or the rendering of investment advice. The information provided in this report should not be construed in any manner whatsoever as personalized advice. All users and readers of WTR’s reports are cautioned to consult their own independent financial, tax and legal advisors prior to purchasing or selling securities.<br><br>Robert Sassoon, who is the writer of this report, covers the Healthcare &amp; Healthcare Services and Emerging Growth &amp; Special Situations sectors for WTR. Mr. Sassoon and members of his household have no personal or business-related relationship to the subject company other than providing digital content and any ancillary services WTR may offer.<br><br>Unless otherwise indicated, WTR intends to provide continuing coverage of the covered companies. WTR will notify its readers through website postings or other appropriate means if WTR determines to terminate coverage of any of the companies covered.<br><br>In certain instances, including this report, WTR will write research covering non-clients. Readers should assume that WTR may seek to turn these non-paying companies into paying clients. Likewise, WTR may seek to transform these non-clients into paying clients of it or of its affiliate, which provides services such as presenting at sponsored investor conferences, distributing press releases, advising on investor relations and broader corporate communications and public relations strategies as well as performing certain other related services (“Ancillary Services”). The companies that WTR covers in our research are not required to purchase or use Ancillary Services of WTR or an affiliate might offer to clients.<br><br>The manner of WTR’s potential research compensation and Ancillary Services to covered companies raise actual and perceived conflicts of interest. WTR is committed to manage those conflicts to protect its reputation and the objectivity of employees/analysts by adhering to strictly written compliance guidelines.<br><br>The views and analyses included in our research reports are based on current public information that we consider to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, timeliness, or correctness. Neither we nor our analysts, directors, officers, employees, representatives, independent contractors or agents shall be liable for any omissions, errors or inaccuracies, regardless of cause, foreseeability or the lack of timeliness of, or any delay or interruptions in the transmission of our reports to content users. This lack of liability extends to direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, losses, lost income, lost profit or opportunity costs.<br><br>All investment information contained herein should be independently verified by the reader or user of this report. For additional information, all readers of this report are encouraged to visit WTR’s website www.watertowerresearch.com.</p>

KEY HIGHLIGHTS

More of the same as 2023 begins.&nbsp;The SPAC IPO market continues to run on a very slow drip, but we do at least have one pricing to report. On January 13, 2023, Israeli technology-focused SPAC Israeli Acquisitions Corp. (ISRLU) became the first SPAC IPO to be priced in 2023, raising $125 million, which is at the higher end of recent gross proceeds raised. Meanwhile, there have been no new SPAC IPO registrations filed since December 7, 2022, and four registration withdrawals so far this month, leaving the pipeline of pending SPAC IPOs at 71, the lowest number since before 2021. SPACs continue to liquidate, with three completed so far in January. Another six SPACs are slated to liquidate before the end of the month.
IBC deal activity.&nbsp;We are seeing more activity with respect to SPAC IBC deals, continuing the trend of the past six months. As of writing, 10 IBC deals have been penned in January, but deal size continues to shrink, with the average IBC value at ~$230 million, or around one-third of the average deal value ($645 million) recorded for 2022. There have also been a couple of deal terminations to report: DTRT’s $681 million combination with home healthcare company Consumer Direct Holdings and IGAC’s $400 million merger with fantasy sports online betting platform PlayUp. SPAC IGAC proceeded to liquidate its trust on January 11.
De-SPAC me once, De-SPAC me twice.&nbsp;Our SPAC Talk Focus this week continues with the theme of value hunting in the ravaged de-SPAC sector. The latest post de-SPACing transaction has a new twist. In fact, it is not a straight buyout, but a merger involving another SPAC. On January 10, 2023, SPAC USCT announced that it intends to merge with vehicle data provider WEJO. Will more SPACs join the fray of bargain hunters in and among the de-SPAC wreckage?

SPAC STATISTICS


Source: WTR

SPAC HAPPENINGS IN JANUARY 2023
Figure 1: IPO Pricings/Completed Liquidations
IGAC returned $276 million from its trust to redeeming shareholders in 2022.


Source: WTR Research

Figure 2: IBC Announcements/Terminations


Source: WTR Research

Figure 3: De-SPACings


Source: WTR Research

SPAC/DE-SPAC RETURNS
Figure 4: Live IBCs (Initial Business Combinations)—Key Stats


Source: WTR Research

Figure 5: Top 5 Live IBCs by Share Price


Source: WTR Research

Figure 6: Bottom 5 Live IBCs by Share Price


Source: WTR Research

Figure 7: De-SPACs—Key Stats


Source: WTR Research

Figure 8: Top 5 De-SPAC Performers by Share Price


Source: WTR Research

Figure 9: Bottom 5 De-SPAC Performers by Share Price


Source: WTR

SPAC TALK FOCUS
Rummaging through the De-SPAC Wreckage
More Bankruptcy Candidates Likely…
In the de-SPAC world, the two prevalent operative words start with the letter ‘B’ for bankruptcy and buyout. Since last summer, six de-SPACs have filed for bankruptcy, the latest being crypto miner CORZ, which filed voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code on December 21, 2022.
Figure 10: Bankrupt De-SPACs


Source: WTR

As the specter of recession in the battle against inflation colors the outlook for 2023, it is probable that more de-SPACs will be forced to look to bankruptcy, particularly among the 59 or one-fifth of those de-SPACed since the start of 2021 currently trading under $1.
… And More Hidden Gems for the Taking
During the course of the past year, 11 de-SPAC buyouts have been completed and two other announced post de-SPACing transactions that have yet to close. To be more accurate, most of these buyouts amount to takeunders, with acquisitors taking a trip to the bargain basement to find cheaply valued assets. Excluding biogas producer LFG, which was a rare outperformer among de-SPACs even before BP made its offer, the average buyout price is about two-thirds below the SPAC IPO price of $10.
Figure 11: De-SPAC Buyouts


Source: WTR

We have previously commented that as far as de-SPACs are concerned, we may be close to the trough of the disillusionment stage of the hype cycle and, at some point this year, and we may see greater interest from value hunters, whether they be strategic or financial buyers in searching for hidden gems in and among the de-SPAC wreckage. While we have said that the sub-$1 de-SPAC club is likely littered with candidates for bankruptcy, this group may also contain hidden gems that will be targets for acquisitors. This is evident from our list in Figure 11. Five out of the 13 (~40%) buyouts involve de-SPACs that were trading sub-$1 pre-announcement, including the newest transaction involving WEJO.
WEJO – A Post De-SPACing Transaction with a Difference
Earlier this week, there was a post de-SPACing transaction announcement with a difference, involving a UK-based vehicle data aggregator. In fact, this is not a buyout, but rather a merger. On January 10, 2023, WEJO that it had entered into a definitive merger agreement with SPAC TKB Critical Technologies I (USCT). WEJO had been de-SPACed in November 2021 in an $800 million combination with another SPAC Virtuoso Acquisition Corp. (formerly VOSO). However, as Figure 12 clearly demonstrates, the IBC has not gone well from a value creation point of view since de-SPACing, with WEJO consistently trading well below $1 since last summer.
Figure 12: WEJO – Once De-SPACed, Twice Not So Shy


Source: SPAC Research

In light of WEJO’s proposed business combination with SPAC USCT, WEJO stands to be de-SPACed for the second time. The proposed combination is being structured as a stock-for-stock transaction. At closing of the transaction, each issued and outstanding share and warrant of USCT will be exchanged for the right to receive a number of WEJO common shares and warrants, respectively, based on an exchange ratio calculated by dividing $11.25 per USCT share by the volume weighted average price per WEJO common share for the 15 consecutive trading days immediately preceding the second trading day prior to the date of WEJO’s shareholders’ meeting, subject to a collar range of $0.50-3.00 and exchange ratios of 22.5-3.75. This translates into an implied enterprise value range of ~$122-412 million, with the top end of the range representing about half the valuation announced at the time of the VOSO/WEJO IBC announcement in August 2021.
Figure 13: USCT/WEJO Transaction Overview


Source: USCT, WEJO Investor Presentation, January 2023

This transaction is targeted to close in 2Q23 and is expected to bring $100 million of proceeds to WEJO from USCT’s cash in trust and a PIPE. Since USCT held $236 million in trust, as of September 30, 2022, there does seem to be an embedded assumption of a high redemption from the SPAC’s public shareholders ahead of the de-SPACing, but for WEJO, the transaction brings much needed funds as it looks to accelerate its revenue growth trajectory and goal of achieving cash profitability within the next three years. It also brings SPAC sponsors who offer deep financial and operational experience in leading and building scalable and sustainable public and private global technology companies with a solid track record of unlocking shareholder value. Among the sponsors is Angela Blatteis, a former Managing Director and Ambassador at The Gores Group, where she led several high-profile acquisitions and divestitures and co-headed Global Equity Capital at the prolific and reputable SPAC sponsor.
One of the most interesting aspects of this transaction is that it points to an additional pathway for SPACs to secure an IBC. While predominantly targeting private companies, and in a few instances publicly traded OTC companies, this is the first time to the best of our knowledge that a SPAC has targeted a company that has already been de-SPACed. In this instance, although USCT was running against an imminent merger deadline of January 29, 2023, in the WEJO webinar presentation on the transaction, USCT’s Blatteis suggested that WEJO was an excellent fit for USCT, claiming that the company is the on the crux of transforming itself from a pure data aggregator to a value-added solutions and SaaS provider and that this pivot in product mix and services along with better cost containment will lead to a significant expansion in margin accelerating WEJO’s pathway to profitability and cash flow positivity. Blatteis added that she believed that at WEJO’s prevailing equity value, there was huge value upside for investors. While the current projections are toned down somewhat from those presented when WEJO entered into an IBC agreement with VOSO in August 2021, they still indicate a feisty growth trajectory.
Figure 14: WEJO’S Projections, Then and Now


Source: USCT, WEJO Investor Presentation, January 2023, WTR

We expect the momentum for de-SPAC value hunting either via a buyout or merger will increase in 2023, and we might even see more targetless SPACs jumping into the fray with other bargain hunters.
DISCLOSURES
Water Tower Research (“WTR”) is a professional publisher of investment research reports on public companies and, to a lesser extent, private firms (“the Companies”). WTR provides investor-focused content and digital distribution strategies designed to help companies communicate with investors.  WTR is not a registered investment adviser or a broker/dealer nor does WTR provide investment banking services. WTR operates as an exempt investment adviser under the so called “publishers’ exemption” from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940. WTR does not provide investment ratings / recommendations or price targets on the companies it reports on. Readers are advised that the research reports are published and provided solely for informational purposes and should not be construed as an offer to sell or the solicitation of an offer to buy securities or the rendering of investment advice. The information provided in this report should not be construed in any manner whatsoever as personalized advice. All users and readers of WTR’s reports are cautioned to consult their own independent financial, tax and legal advisors prior to purchasing or selling securities.  Robert Sassoon, who is the writer of this report, covers the Healthcare &amp; Healthcare Services and Emerging Growth &amp; Special Situations sectors for WTR. Mr. Sassoon and members of his household have no personal or business-related relationship to the subject company other than providing digital content and any ancillary services WTR may offer.  Unless otherwise indicated, WTR intends to provide continuing coverage of the covered companies. WTR will notify its readers through website postings or other appropriate means if WTR determines to terminate coverage of any of the companies covered.  In certain instances, including this report, WTR will write research covering non-clients. Readers should assume that WTR may seek to turn these non-paying companies into paying clients. Likewise, WTR may seek to transform these non-clients into paying clients of it or of its affiliate, which provides services such as presenting at sponsored investor conferences, distributing press releases, advising on investor relations and broader corporate communications and public relations strategies as well as performing certain other related services (“Ancillary Services”). The companies that WTR covers in our research are not required to purchase or use Ancillary Services of WTR or an affiliate might offer to clients.  The manner of WTR’s potential research compensation and Ancillary Services to covered companies raise actual and perceived conflicts of interest. WTR is committed to manage those conflicts to protect its reputation and the objectivity of employees/analysts by adhering to strictly written compliance guidelines.  The views and analyses included in our research reports are based on current public information that we consider to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, timeliness, or correctness. Neither we nor our analysts, directors, officers, employees, representatives, independent contractors or agents shall be liable for any omissions, errors or inaccuracies, regardless of cause, foreseeability or the lack of timeliness of, or any delay or interruptions in the transmission of our reports to content users. This lack of liability extends to direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, losses, lost income, lost profit or opportunity costs.  All investment information contained herein should be independently verified by the reader or user of this report. For additional information, all readers of this report are encouraged to visit WTR’s website www.watertowerresearch.com.

SPAC Talk: De-SPAC Me Once, De-SPAC Me Twice