POPULATION HEALTH INVESTMENT CO., INC. – 10-K/A – Management’s discussion and analysis of financial condition and results of operations

References to the “Company,” “Population Health Investment Co., Inc.,” “our,” “us” or “we” refer to…

References to the “Company,” “Population Health Investment Co., Inc.,” “our,”
“us” or “we” refer to Population Health Investment Co., Inc. The following
discussion and analysis of the Company’s financial condition and results of
operations should be read in conjunction with the financial statements and the
notes thereto contained elsewhere in this report. Certain information contained
in the discussion and analysis set forth below includes forward-looking
statements that involve risks and uncertainties.

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Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K/A includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Exchange Act. We have based these forward-looking statements
on our current expectations and projections about future events. These
forward-looking statements are subject to known and unknown risks, uncertainties
and assumptions about us that may cause our actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as “may,” “should,” “could,” “would,” “expect,”
“plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such
terms or other similar expressions Such statements include, but are not limited
to, possible business combinations and the financing thereof, and related
matters, as well as all other statements other than statements of historical
fact included in this Form 10-K. Factors that might cause or contribute to such
a discrepancy include, but are not limited to, those described in our other
Securities and Exchange Commission (“SEC”) filings.

In this Amendment No. 2 (“Amendment No. 2”) to the Annual Report on Form 10-K of
Population Health Investment Co., Inc. (the “Company”) for the fiscal year ended
December 31, 2020, we are restating our audited financial statements as of
December 31, 2020, and for the period from September 11, 2020 (inception)
through December 31, 2020 and the audited balance sheet issued in connection
with our initial public offering on November 20, 2020 (the “Initial Public
Offering”).

In preparation of our financial statements as of and for quarterly period ended
September 30, 2021, we concluded we should restate our previously filed
financial statements to classify all Class A ordinary shares subject to possible
redemption in temporary equity. In accordance with the SEC and its staff’s
guidance on redeemable equity instruments in ASC 480-10-S99, redemption
provisions not solely within our control require ordinary shares subject to
redemption to be classified outside of permanent equity. We had previously
classified a portion of its Class A ordinary shares in permanent equity, or
total shareholders’ equity. Although we did not specify a maximum redemption
threshold, our charter currently provides that we will not redeem our public
shares in an amount that would cause our net tangible assets to be less than
$5,000,001. Previously, we did not consider redeemable shares classified as
temporary equity as part of net tangible assets. Effective with its financial
statements for quarterly period ended September 30, 2021, we revised this
interpretation to include temporary equity in net tangible assets. In addition,
in connection with the change in presentation for the Class A ordinary shares
subject to possible redemption, we determined we should restate our earnings per
share calculation to allocate income and losses shared pro rata between the two
classes of shares. This presentation contemplates an initial business
combination as the most likely outcome, in which case, both classes of shares
share pro rata in our income and losses.

After further consideration of the impact of the error that led to the revised
September 30, 2021 financial statements, on December 16, 2021, the Company’s
management and the audit committee of the Company’s board of directors (the
“Audit Committee”) concluded that the Company’s previously issued (i) audited
balance sheet as of November 20, 2020 (the “Post IPO Balance Sheet”), as
previously restated in Amendment No. 1 to the Annual Report on Form 10-K/A of
the Company for the fiscal year ended December 31, 2020, as filed with the SEC
on May 19, 2021 (the “First Amended Filing”), (ii) audited financial statements
for the period ended December 31, 2020 included in the First Amended Filing,
(iii) unaudited interim 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 24, 2021 and reported as revised in the Company’s Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2021 ( the
“Original Q3 Form 10-Q”), (iv) unaudited interim 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 13, 2021 and reported as revised in
the Company’s Original Q3 Form 10-Q, and (v) footnote 2 to the unaudited interim
financial statements and Item 4 of Part 1 included in the Company’s Original Q3
Form 10-Q (collectively, the “Affected Periods”), should be restated to report
all public shares as temporary equity and should no longer be relied upon. As
such, the Company is restating its financial statements for the Affected Periods
in (i) this Form 10-K/A with respect to the Post IPO Balance Sheet and the
Company’s audited financial statements for the period ended December 31, 2020
included in the First Amended Filing and (ii) a Form 10-Q/A for the quarterly
period ended September 30, 2021 with respect to its unaudited condensed
financial statements for the periods ended March 31, 2021, June 30, 2021 and
September 30, 2021.

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. As a result of that
reassessment, we determined that our disclosure controls and procedures for such
periods were not effective with respect to the proper accounting and
classification of complex financial instruments. For more information, see Item
9A included in this Annual Report on Form 10-K/A. The restatement is more fully
described in Note 2 of the notes to the financial statements included herein.

Overview

We are a blank check company incorporated on September 11, 2020 as a Cayman
Islands
exempted company for the purpose of effecting a merger, share exchange,
asset acquisition, share purchase, reorganization or similar business
combination with one or more businesses or entities. We are an emerging growth
company and, as such, we are subject to all of the risks associated with
emerging growth companies.

Our Sponsor is Population Health Investment Holding, Inc., a Cayman Islands
exempted company. Our registration statement for the Initial Public Offering
became effective on October 21, 2020. On November 20, 2020, we consummated the
Initial Public Offering of 17,250,000 units (the “Units” and, with respect to
the Class A ordinary shares included in the Units, the “Public Shares”),
including 2,250,000 additional Units to cover over-allotments (the
“Over-Allotment Units”), at $10.00 per Unit, generating gross proceeds of
$172.5 million, and incurring offering costs of approximately $10.2 million,
inclusive of approximately $6.0 million in deferred underwriting commissions.

Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement (“Private Placement”) of 3,633,333 warrants (each, a
“Private Placement Warrant” and collectively, the “Private Placement Warrants”),
at a price of $1.50 per Private Placement Warrant with the Sponsor, generating
gross proceeds of approximately $5.5 million.

Upon the closing of the Initial Public Offering and the Private Placement,
$172.5 million($10.00 per Unit) of the net proceeds of the Initial Public
Offering and certain of the proceeds of the Private Placement were placed in a
trust account (the “Trust Account”), located in the United States with
Continental Stock Transfer & Trust Company acting as trustee, and invested only
in U.S. “government securities” within the meaning of Section 2(a)(16) of the
Investment Company Act having a maturity of 185 days or less or in money market
funds meeting certain conditions under Rule 2a-7 promulgated under the
Investment Company Act which invest only in direct U.S. government treasury
obligations, as determined by the Company, until the earlier of: (i) the
completion of a Business Combination and (ii) the distribution of the Trust
Account as described below.

Our management has broad discretion with respect to the specific application of
the net proceeds of the Initial Public Offering and the sale of Private
Placement Warrants, although substantially all of the net proceeds are intended
to be applied generally toward consummating a Business Combination.

If we have not completed a Business Combination within 24 months from the
closing of the Initial Public Offering, or November 20, 2022 (the “Combination
Period”), we will (i) cease all operations except for the purpose of winding up;
(ii) as promptly as reasonably possible but not more than ten business days
thereafter, redeem the Public Shares, at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the Trust Account, including
interest earned on the funds held in the Trust Account and not previously
released to the Company to pay its income taxes, if any (less up to $100,000 of
interest to pay dissolution expenses), divided by the number of the
then-outstanding Public Shares, which redemption will completely extinguish
Public Shareholders’ rights as shareholders (including the right to receive
further liquidation distributions, if any); and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the remaining
shareholders and the board of directors, liquidate and dissolve, subject in the
case of clauses (ii) and (iii) to the Company’s obligations under Cayman Islands
law to provide for claims of creditors and the requirements of other applicable
law.

Liquidity and Capital Resources

At December 31, 2020, we had $0.7 million in cash and working capital of
approximately $1.1 million.

Prior to the completion of the Initial Public Offering, our liquidity needs had
been satisfied by a contribution of $25,000 from our Sponsor to cover for
certain offering costs in exchange for the issuance of the Founder Shares, the
loan of $300,000 from our Sponsor pursuant to a promissory note (“Note”), and
the proceeds from the consummation of the Private Placement not held in the
Trust Account. As of December 31, 2020, the Note remains outstanding. In
addition, in order to finance transaction costs in connection with a Business
Combination, our Sponsor may, but is not obligated to, provide us working
capital loans. To date, there were no amounts outstanding under any working
capital loan.



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Based on the foregoing, our management believes that we will have sufficient
working capital and borrowing capacity to meet our needs through the earlier of
the consummation of a Business Combination or one year from this filing. Over
this time period, we will be using these funds for paying existing accounts
payable, identifying and evaluating prospective initial Business Combination
candidates, performing due diligence on prospective target businesses, paying
for travel expenditures, selecting the target business to merge with or acquire,
and structuring, negotiating and consummating the Business Combination.

Results of Operations

Our entire activity from inception up to December 31, 2020 was in preparation
for our formation and the preparation of our Initial Public Offering. We will
not be generating any operating revenues until the closing and completion of our
initial Business Combination, at the earliest.

For the period from September 11, 2020 (inception) through December 31, 2020, we
had a net loss of approximately $2.1 million, which consisted of approximately
$1.5 million loss from changes in fair value of derivative warrant liabilities,
general and administrative expenses of approximately $248,900 and transaction
costs – derivative liabilities of approximately $0.4 million, partly offset by
approximately $200 of net gain from investments held in the Trust Account.

As a result of the restatement described in Note 2 of the notes to the financial
statements included herein, we classify the warrants issued in connection with
our Initial Public Offering and Private Placement as liabilities at their fair
value and adjust the warrant instruments to fair value at each reporting period.
These liabilities are subject to re-measurement at each balance sheet date until
exercised, and any change in fair value is recognized in our statement of
operations. For the period from November 20, 2020 (inception) through December
31, 2020
, the change in fair value of warrants was an increase of $1.5 million.

Contractual Obligations

Registration Rights

The holders of Founder Shares, Private Placement Warrants, Class A ordinary
shares underlying the Private Placement Warrants and warrants that may be issued
upon conversion of Working Capital Loans (and any Class A ordinary shares
issuable upon the exercise of the Private Placement Warrants and warrants that
may be issued upon conversion of Working Capital Loans) are entitled to
registration rights pursuant to a registration rights agreement. The holders of
these securities are entitled to make up to three demands, excluding short form
demands, that we register such securities. These holders will be entitled to
certain demand and “piggyback” registration rights. We will bear the expenses
incurred in connection with the filing of any such registration statements.

Underwriting Agreement

We granted the underwriters a 45-day option from the final prospectus relating
to the Initial Public Offering to purchase up to 2,250,000 additional Units to
cover over-allotments, if any, at the Initial Public Offering price less the
underwriting discounts and commissions. On November 20, 2020, the underwriters
fully exercised their over-allotment option.

The underwriters were entitled to an underwriting discount of $0.20 per Unit, or
$3.5 million in the aggregate, paid upon the closing of the Initial Public
Offering. In addition, $0.35 per unit, or approximately $6.0 million in the
aggregate will be payable to the underwriters for deferred underwriting
commissions. The deferred fee will become payable to the underwriters from the
amounts held in the Trust Account solely in the event that the Company completes
a Business Combination, subject to the terms of the underwriting agreement.

Critical Accounting Policies and Estimates

Class A Ordinary Shares Subject to Possible Redemption

Class A ordinary shares subject to mandatory redemption (if any) are classified
as liability instruments and are measured at fair value. Conditionally
redeemable Class A ordinary shares (including Class A ordinary shares that
feature redemption rights that are either within the control of the holder or
subject to redemption upon the occurrence of uncertain events not solely within
our control) are classified as temporary equity. At all other times, Class A
ordinary shares are classified as shareholders’ equity. Our Class A ordinary
shares feature certain redemption rights that are considered to be outside of
our control and subject to occurrence of uncertain future events, Accordingly,
at December 31, 2020, a total of 17,250,000 Class A ordinary shares subject to
possible redemption are presented at redemption value as temporary equity,
outside of the shareholders’ equity section of the Company’s balance sheet.

Under ASC 480-10-S99, the Company has elected to recognize changes in the
redemption value immediately as they occur and adjust the carrying value of the
security to equal the redemption value at the end of the reporting period. This
method would view the end of the reporting period as if it were also the
redemption date of the security. Immediately upon the closing of the Initial
Public Offering, we recognized the accretion from initial book value to
redemption amount. The change in the carrying value of redeemable shares of
Class A ordinary shares resulted in charges against additional paid-in capital
and accumulated deficit.



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Derivative Warrant liabilities

We do not use derivative instruments to hedge exposures to cash flow, market, or
foreign currency risks. We evaluate all of our financial instruments, including
issued stock purchase warrants, to determine if such instruments are derivatives
or contain features that qualify as embedded derivatives, pursuant to ASC 480
and ASC 815-15. The classification of derivative instruments, including whether
such instruments should be recorded as liabilities or as equity, is re-assessed
at the end of each reporting period.

We issued 5,750,000 warrants to purchase Class A ordinary shares to investors in
our Initial Public Offering and issued 3,633,333 Private Placement Warrants. All
of our outstanding warrants are recognized as derivative liabilities in
accordance with ASC 815-40. Accordingly, we recognize the warrant instruments as
liabilities at fair value and adjust the instruments to fair value at each
reporting period. The liabilities are subject to re-measurement at each balance
sheet date until exercised, and any change in fair value is recognized in our
statement of operations. The fair value of warrants issued in connection with
the Initial Public Offering and Private Placement have been measured at fair
value using a Monte Carlo simulation model.

Net Income (Loss) Per Ordinary Share

We have two classes of shares: Class A ordinary shares and Class B ordinary
shares. Income and losses are shared pro rata between the two classes of shares.
Net income (loss) per share is computed by dividing net income (loss) by the
weighted-average number of ordinary shares outstanding during the period. We do
not consider the effect of the warrants sold in the Initial Public Offering and
the Private Placement, to purchase an aggregate of 9,383,333 of the Company’s
Class A ordinary shares in the calculation of diluted income (loss) per share,
since their exercise is contingent upon future events and their inclusion would
be anti-dilutive under the treasury stock method. As a result, diluted net
income (loss) per share is the same as basic net income (loss) per share for the
period. Accretion associated with the Class A ordinary shares subject to
possible redemption is excluded from earnings per share as the redemption value
approximates fair value.



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Recent Accounting Pronouncements

Our management does not believe that there are any recently issued, but not yet
effective, accounting pronouncements, if currently adopted, that would have a
material effect on our financial statements.

Off-Balance Sheet Arrangements

As of December 31, 2020, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K.

JOBS Act

The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We qualify as an “emerging growth company” and
under the JOBS Act are allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded)
companies. We are electing to delay the adoption of new or revised accounting
standards, and as a result, we may not comply with new or revised accounting
standards on the relevant dates on which adoption of such standards is required
for non-emerging growth companies. As a result, the financial statements may not
be comparable to companies that comply with new or revised accounting
pronouncements as of public company effective dates.

Additionally, we are in the process of evaluating the benefits of relying on the
other reduced reporting requirements provided by the JOBS Act. Subject to
certain conditions set forth in the JOBS Act, if, as an “emerging growth
company,” we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor’s attestation report on our system of
internal controls over financial reporting pursuant to Section 404, (ii) provide
all of the compensation disclosure that may be required of non-emerging growth
public companies under the Dodd-Frank Wall Street Reform and Consumer Protection
Act, (iii) comply with any requirement that may be adopted by the PCAOB
regarding mandatory audit firm rotation or a supplement to the auditor’s report
providing additional information about the audit and the financial statements
(auditor discussion and analysis) and (iv) disclose certain executive
compensation related items such as the correlation between executive
compensation and performance and comparisons of the CEO’s compensation to median
employee compensation. These exemptions will apply for a period of five years
following the completion of our Initial Public Offering or until we are no
longer an “emerging growth company,” whichever is earlier.

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