UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)


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

For the quarter ended June 30, 2021


☐	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: 001-39962

EQ HEALTH ACQUISITION CORP.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

85-2877347

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

4611 Bee Cave Road, Ste. 213

Austin, TX 78746

(Address of principal executive offices)

(512) 329-6977

(Issuer’s telephone number)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A Common Stock, $0.0001 par value, and one-half of one redeemable warrant	EQHA.U	The New York Stock Exchange
Class A Common Stock, $0.0001 par value	EQHA	The New York Stock Exchange
Redeemable warrants	EQHA.WS	The New York Stock Exchange

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of August 10, 2021, there were 21,999,960 shares of Class A common stock, $0.0001 par value, and 5,499,990 shares of Class B common stock, $0.0001 par value, issued and outstanding.


	Page
Part I. Financial Information	3
Item 1. Financial Statements (Unaudited)	3
Condensed Balance Sheets as of June 30, 2021 and December 31, 2020	3
Condensed Statement of Operations for the three and six months ended June 30, 2021	4
Condensed Statement of Changes in Stockholders’ Equity for the three and six months ended June 30, 2021	5
Condensed Statement of Cash Flows for the six months ended June 30, 2021	6
Notes to Unaudited Condensed Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk	22
Item 4. Controls and Procedures	22
Part II. Other Information	23
Item 1. Legal Proceedings	23
Item 1A. Risk Factors	23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 6. Exhibits	25
Part III. Signatures	26


	June 30,		December 31,
	2021		2020
	(Unaudited)
ASSETS
Current assets
Cash	$	1,055,612	$	21,900
Prepaid expenses		14,449		—
Total Current Assets		1,070,061		21,900

Deferred offering costs		—		188,869
Marketable securities held in Trust Account		220,034,079		—
TOTAL ASSETS	$	221,104,140	$	210,769

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	1,650,248	$	1,000
Accrued offering costs		50,000		135,769
Promissory note — related party		—		50,000
Total Current Liabilities		1,700,248		186,769

Warrant liability		12,353,980		—
Deferred underwriting fee payable		7,699,986		—
TOTAL LIABILITIES		21,754,214		186,769

Commitments and Contingencies

Class A common stock subject to possible redemption 19,434,992 and no shares at redemption value at June 30, 2021 and December 31, 2020, respectively		194,349,920		—

Stockholders’ Equity
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding		—		—
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 2,564,968 and no shares issued and outstanding (excluding 19,434,992 and no shares subject to possible redemption) at June 30, 2021 and December 31, 2020, respectively		256		—
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 5,499,990 shares issued and outstanding, at June 30, 2021 and December 31, 2020		550		550
Additional paid-in capital		5,468,410		24,450
Accumulated deficit		(469,210)		(1,000)
Total Stockholders’ Equity		5,000,006		24,000
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	221,104,140	$	210,769


	Three Months		Six Months
	Ended June 30,		Ended June 30,
	2021		2021
Operating and formation costs	$	1,823,709	$	2,124,070
Loss from operations		(1,823,709)		(2,124,070)

Other income (expense):
Interest earned on marketable securities held in Trust Account		(3,649)		9,976
Change in fair value of warrants		(3,653,994)		9,047,985
Transaction costs allocated to warrant liabilities		—		(794,263)
Loss on initial issuance of private warrants		—		(1,471,998)
Unrealized gain on marketable securities held in Trust Account		12,844		24,511
Other income (expense), net		(3,644,759)		6,816,211

(Loss) income before income taxes		—		—
Benefit (provision) for income taxes		—		—
Net income (loss)	$	(5,468,468)	$	4,692,141

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption		19,981,838		19,503,236
Basic and diluted net (loss) income per share, Class A common stock subject to possible redemption	$	0.00	$	0.00
Basic and diluted weighted average shares outstanding, Non-redeemable common stock		7,518,112		7,410,715
Basic and diluted net (loss) income per share, Non-redeemable common stock	$	(0.73)	$	0.63


								Additional				Total
	Class A Common Stock			Class B Common Stock				Paid		Accumulated		Stockholders'
	Shares	Amount		Shares		Amount		in Capital		Deficit		Equity
Balance - January 1, 2021	—	$	—		5,499,990	$	550	$	24,450	$	(1,000)	$	24,000

Sale of 21,999,960 Unit, net of underwriting discounts, initial fair value of public warrants, and offering expenses	21,999,960		2,200						194,631,585				194,633,785

Class A common stock subject to possible redemption	(19,981,838)		(1,998)		—		—		(194,656,035)		(5,160,351)		(199,818,384)

Net income	—		—		—		—		—		10,160,609		10,160,609

Balance - March 31, 2021	2,018,122	$	202		5,499,990	$	550	$	—	$	4,999,258	$	5,000,010

Class A common stock subject to possible redemption	546,846		54		—		—		5,468,410				5,468,464

Net loss	—		—		—		—		—		(5,468,468)		(5,468,468)

Balance – June 30, 2021	2,564,968	$	256		5,499,990	$	550	$	5,468,410	$	(469,210)	$	5,000,006


Cash Flows from Operating Activities:
Net income	$	4,692,141
Adjustments to reconcile net income to net cash used in operating activities:
Change in fair value of warrant liability		(9,047,985)
Loss on initial issuance of private warrants		1,471,998
Interest earned on marketable securities held in Trust Account		(9,976)
Transaction costs allocated to warrant liabilities		794,263
Unrealized gain on marketable securities held in Trust Account		(24,551)
Changes in operating assets and liabilities:
Prepaid expenses		(14,449)
Accounts payable and accrued expenses		1,649,248
Net cash used in operating activities		(489,271)

Cash Flows from Investing Activities:
Investment of cash in Trust Account		(219,999,592)
Net cash used in investing activities		(219,999,592)

Cash Flows from Financing Activities:
Proceeds from sale of Units, net of underwriting discounts paid		215,599,607
Proceeds from sale of Private Warrants		6,399,992
Repayment of promissory note - related party		(90,000)
Proceeds from promissory note - related party		40,000
Payment of offering costs		(427,024)
Net cash provided by financing activities		221,522,575

Net Change in Cash		1,033,712
Cash - Beginning of period		21,900
Cash - End of period	$	1,055,612

Non-Cash investing and financing activities:
Payment of deferred offering costs by the Sponsor in exchange for the issuance of Class B common stock	$	50,000
Initial classification of common stock subject to possible redemption	$	208,793,480
Change in value of common stock subject to possible redemption	$	(14,443,560)
Deferred offering costs included in accrued offering costs	$	7,699,986


Description	Level	June 30, 2021
Assets:
Marketable securities held in Trust Account	1	$	220,034,079

Liabilities:
Warrant Liability – Public Warrants	1		7,809,986
Warrant Liability – Private Placement Warrants	3		4,543,994


	June 30,			February 2,
	2021			2021
Risk-free interest rate		1.01	%		0.62	%
Time to expiration, in Years		5.79			6.00
Expected volatility		12.75	%		14.0 - 23.0	%
Dividend yield		0.00	%		0.00	%
Exercise price	$	11.50		$	11.50
Stock Price	$	9.66		$	10.00


	Private Placement
	₍₁₎		Public	Warrant Liabilities
Fair value as of January 1, 2021	$	—	—	—
Initial measurement on February 2, 2021		7,871,990	13,529,975	21,401,965
Change in valuation inputs or other assumptions		(3,327,996)	(5,719,989)	(9,047,985)
Fair value as of June 30, 2021	$	4,543,994	7,809,986	12,353,980


No.		Description of Exhibit
31.1*		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document


	EQ HEALTH ACQUISITION CORP.

Date: August 10, 2021	By:	/s/ Scott Ellyson
	Name:	Scott Ellyson
	Title:	Chief Executive Officer, President and Chief Financial Officer
		(Principal Executive Officer and Principal Financial and Accounting Officer)

SEC Form 10-Q filed by EQ Health Acquisition Corp.