UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

☒

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

For the fiscal year ended December 31, 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: 001-39769

HUMANCO ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

Delaware		85-3357217
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

P.O. Box 90608 Austin, TX		78709 (Zip Code)
(Address of principal executive offices)

Registrant’s telephone number, including area code: (512) 535-0440

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

Title of each class	Trading Symbol	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	HMCOU	The Nasdaq Capital Market
Class A common stock included as part of the units	HMCO	The Nasdaq Capital Market
Redeemable warrants included as part of the units, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50	HMCOW	The Nasdaq Capital Market

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 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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

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 Exchange Act). ☒ Yes ☐ No

As of June 30, 2021, the aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was $143,154,419.36 based on the closing sales price of the registrant’s common equity on June 30, 2021 as reported on The Nasdaq Capital Market.

As of December 31, 2021, 31,250,000 Class A shares of common stock and 7,187,500 Class B shares of common stock were issued and outstanding.

TABLE OF CONTENTS

Part I		5

Item 1.	Business.	5

Item 1A.	Risk factors.	19

Item 1B.	Unresolved Staff Comments.	54

Item 2.	Properties.	54

Item 3.	Legal Proceedings.	54

Item 4.	Mine Safety Disclosures.	54

Part II		55

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	55

Item 6.	Selected Financial Data.	56

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	56

Item 7A.	Quantitative and Qualitative Disclosures about Market Risk.	59

Item 8.	Financial Statements and Supplementary Data.	59

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	59

Item 9A.	Controls and procedures.	59

Item 9B.	Other Information.	60

Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	60

Part III		61

Item 10.	Directors, Executive Officers and Corporate Governance.	61

Item 11.	Executive Compensation.	65

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	66

Item 13.	Certain Relationships and Related Transactions, and Director Independence.	67

Item 14.	Principal Accounting Fees and Services.	69

Part IV		71

Item 15.	Exhibits and Financial Statement Schedules.	71

Item 16.	Form 10-K Summary.	74

SIGNATURES		75

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Form 10-K may constitute “forward-looking statements.” Our forward-looking statements include, but are not limited to, statements regarding our or our management team’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,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “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.

The forward-looking statements contained in this Form 10-K are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will 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, the following risks, uncertainties and other factors:

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our being a company with no operating history and no revenues;

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our ability to select an appropriate target business or businesses;

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our ability to complete our initial business combination, particularly given competition from other blank check companies and financial and strategic buyers;

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our expectations around the performance of the prospective target business or businesses, including competitive prospects of the business following 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 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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the number, variety and characteristics of prospective target businesses;

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our ability to consummate an initial business combination amidst the uncertainty resulting from the ongoing COVID-19 pandemic, and the effects of the ongoing pandemic on the H&W and related industries, the economy and any business or businesses with which we consummate our initial business combination;

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

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our public securities’ potential liquidity and trading;

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the lack of a market for our securities;

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the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

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the trust account not being subject to claims of third parties;

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our financial performance; and

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the other risks and uncertainties discussed in “Risk Factors” and elsewhere in this Form 10-K.

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.

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SUMMARY OF RISK FACTORS

An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this Annual Report on Form 10-K, before making a decision to invest in our securities. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Such risks include, but are not limited to:

•

We are a recently incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.

•

Past performance by HumanCo, our management team, directors and their respective affiliates may not be indicative of future performance of an investment in us.

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Our stockholders may not be afforded an opportunity to vote on our proposed initial Business Combination, which means we may complete our initial Business Combination even though a majority of our stockholders do not support such a combination.

•

Your only opportunity to affect the investment decision regarding a potential Business Combination may be limited to the exercise of your right to redeem your shares from us for cash.

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If we seek stockholder approval of our initial Business Combination, our sponsor and members of our management team have agreed to vote in favor of such initial Business Combination, regardless of how our public stockholders vote.

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The ability of our public stockholders and holders of the Private Placement Shares 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 a Business Combination with a target.

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The ability of our public stockholders and holders of the Private Placement Shares to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable Business Combination or optimize our capital structure.

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The ability of our public stockholders and holders of the Private Placement Shares to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial Business Combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.

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The requirement that we consummate an initial Business Combination within 24 months after the closing of our Initial Public Offering may give potential target businesses leverage over us in negotiating a Business Combination and may limit the time we have in which to conduct due diligence on potential Business Combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial Business Combination on terms that would produce value for our stockholders.

•

Our search for a Business Combination, and any target business with which we ultimately consummate a Business Combination, may be materially adversely affected by the ongoing COVID-19 pandemic and the status of debt and equity markets.

•

We may not be able to consummate an initial Business Combination within 24 months after the closing of the Initial Public Offering, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.

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If we seek stockholder approval of our initial Business Combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase public shares or warrants, which may influence a vote on a proposed Business Combination and reduce the public “float” of our Class A common stock or public warrants.

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•

If a stockholders fails to receive notice of our offer to redeem our public shares in connection with our initial Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

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You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.

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Nasdaq Capital Markets may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

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You will not be entitled to protections normally afforded to investors of many other blank check companies.

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If we seek stockholder approval of our initial Business Combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A common stock.

•

Because of our limited resources and the significant competition for Business Combination opportunities, it may be more difficult for us to complete our initial Business Combination. If we have not consummated our initial Business Combination within the required time period, our public stockholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.

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If the net proceeds of our Initial Public Offering and the sale of the Sponsor Warrants not being held in the trust account are insufficient to allow us to operate for the 24 months following the closing of our Initial Public Offering, it could limit the amount available to fund our search for a target business or businesses and our ability to complete our initial Business Combination, and we will depend on loans from our sponsor, its affiliates or members of our management team to fund our search and to complete our initial Business Combination.

•

The other risks and uncertainties discussed in “Risk Factors” and elsewhere in this Annual Report on Form 10-K.

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PART I

References in this Annual Report on Form 10-K to “we,” “us,” “our,” “Company” or “our company” are to HumanCo Acquisition Corp. References to our “management” or our “management team” are to our executive officers and directors, and references to our “sponsor” are to HumanCo Acquisition Holdings LLC, a Delaware limited liability company. References to our “initial stockholders” refer to our sponsor and the Company’s executive officers and directors.

ITEM 1.

BUSINESS.

Introduction

We are a blank check company incorporated on October 5, 2020, as a Delaware corporation 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 (a “Business Combination”). We intend to effectuate our initial Business Combination using cash from the proceeds of our Initial Public Offering (as defined below) and the sale of the Sponsor Warrants (as defined below), our shares, debt or a combination of cash, equity and debt. Based on our business activities, the Company is a “shell company,” as defined under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), because we have no operations and nominal assets consisting almost entirely of cash.

Our business strategy is to identify and complete our initial business combination with a company that complements the experiences and skills of our leadership team and can benefit from their operational expertise. We are backed by HumanCo, a company that invests in and builds brands focused on healthier living and sustainability. We are focused on investing in and building a uniquely-positioned company within the H&W ecosystem.

The HumanCo leadership team has diverse and long-term operational and investment experience in consumer businesses; strong track records in both private and public companies; and proven success as first hand operators in the H&W space. HumanCo has established itself as an authentic voice within health, wellness and sustainability, and is led by its fanatical co-founder, Jason H. Karp, who has a demonstrated mission and track record within H&W investing. HumanCo’s founders, Jason H. Karp and Ross Berman, bring 35+ combined years in investment management as Chief Investment Officers, partners and founders of multi-billion dollar asset management firms, in addition to an authenticity that mission-driven entrepreneurs cannot find in traditional SPAC sponsors. Additionally, they are operators and board members of multiple CPG businesses including Hu, one of the fasting growing healthy snack businesses in the U.S.

While we may acquire a business in any industry, we intend to focus on industries that complement our management team’s background and capitalize on their ability to identify and acquire a business focused on H&W and related industries in the United States. There is a massive cultural awakening within health, wellness and sustainability, and significant opportunities exist within the $4.5 trillion H&W industry, according to the Global Wellness Economy Monitor October 2018 report. The market is comprised of large and growing categories including the following: personal care, beauty, and anti-aging ($1.08 trillion); physical activity ($828 billion); healthy eating, nutrition and weight loss ($702 billion); wellness tourism ($639 billion); preventative and personalized medicine and public health ($575 billion); traditional and complementary medicine ($360 billion); wellness real estate ($134 billion); spa economy ($119 billion); thermal / mineral springs ($56 billion); and workplace wellness ($48 billion), according to Global Wellness Economy Monitor.

On December 11, 2020, we consummated an initial public offering of 28,750,000 Units, which included the full exercise by the underwriters of the over-allotment option to purchase an additional 3,750,000 Units, at $10.00 per Unit, generating gross proceeds of $287,500,000 (the “Initial Public Offering”). Simultaneously with the consummation of the Initial Public Offering and the issuance and sale of the Public Units, the Company consummated the private placement of 8,075,000 private placement warrants (the “Sponsor Warrants”) at a price of $1.00 per Sponsor Warrant, generating gross proceeds of $8,075,000 (the “Private Placement”). In addition, simultaneously with the consummation of the Initial Public Offering and the issuance and sale of the Public Units, the Company consummated the private placement of 2,500,000 units to CAVU Venture Partners III, LP (“CAVU”) at a price of $10.00 per unit (the “Private Placement Units”), each Private Placement Unit consisting of one share of our Class A Common Stock (the “Private Placement Shares”) and one-half of one redeemable warrants (the “Private Placement Warrants”), generating gross proceeds of $25,000,000 (the “CAVU Private Placement”).

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Prior to the consummation of the Initial Public Offering, in October 2020, our sponsor paid $25,000, or approximately $0.001 per share, to cover certain of our offering and formation costs in consideration of 7,187,500 shares of Class B common stock, $0.0001 par value (the “Founder Shares”). In November 2020, our sponsor transferred 75,000 Founder Shares to each of our independent directors.

A total of $312,500,000 of the net proceeds from the Initial Public Offering, the Private Placement and the CAVU Private Placement (which includes the underwriters’ deferred discount of $10,062,500) was placed in a segregated trust account located in the United States, with Continental Stock Transfer & Trust Company acting as trustee (the “Trust Account”). The amounts held in the Trust Account are invested in permitted United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act that invest only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our franchise and income tax obligations and to pay up to $100,000 in dissolution expenses, the proceeds from the Initial Public Offering, the sale of the Sponsor Warrants and the CAVU private placement will not be released from the trust account until the earliest to occur of: (a) the completion of our initial business combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares and Private Placement Shares if we do not complete our initial business combination within 24 months from the closing of the Initial Public Offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, and (c) the redemption of our public shares and Private Placement Shares if we do not complete our initial business combination within 24 months from the closing of the Initial Public Offering or during any Extension Period, subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.

As of December 31, 2021, there was approximately $312,514,788 in investments and cash held in the Trust Account and approximately $$339,570 of cash held outside the Trust Account. As of December 31, 2021, $45,459 had been withdrawn from the Trust Account to pay taxes.

Recent Developments

On February 15, 2022, certain funds and accounts managed by BlackRock, Inc. (collectively, the “Investors”) each entered into a Unit Purchase Agreement (together, the “Unit Purchase Agreements”) with CAVU pursuant to which the Investors, severally and not jointly, purchased the 2,500,000 Private Placement Units from CAVU.

On February 15, 2022, we entered into a Share Purchase Agreement (together, the “Share Purchase Agreements”) with our sponsor and each of the Investors. Pursuant to the Share Purchase Agreements, our sponsor agreed to forfeit an aggregate of 1,370,247 of the Founder Shares it owns, and we have agreed to issue an aggregate of 1,370,247 shares of our Class A common stock (or shares of common stock issuable upon conversion thereof) (the “Investor Shares”) to the Investors at the time of our initial Business Combination, for an aggregate purchase price of $4,900. Like the Founder Shares, the Investor Shares will not be transferable or salable until the earlier of (i) one year after the completion of our initial Business Combination or (ii) subsequent to our initial Business Combination, (A) if the last reported sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial Business Combination or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property.

On February 15, 2022, our sponsor and each of the Investors also entered into a Warrant Purchase Agreement (together, the “Warrant Purchase Agreements”) under which our sponsor sold an aggregate of 2,005,243 of its Sponsor Warrants to the Investors (the “Investor Private Placement Warrants”). The terms of these warrants are described in the Company’s Registration Statement on Form S-1 (File No. 333-250630, the “Registration Statement”), as such description is amended by the Amendment (as defined below).

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In order to facilitate the transactions contemplated by the Unit Purchase Agreements, the Share Purchase Agreements and the Warrant Purchase Agreements, on February 15, 2022 we, our sponsor, HMCO Acquisition, LLC, CAVU and members of our board of directors and/or management team entered into Amendment No. 1 to that certain Letter Agreement, dated as of December 8, 2020 (the “Amendment”). The Amendment (i) removed certain transfer restrictions contained in the Letter Agreement from the Sponsor Warrants and Private Placement Units and (ii) eliminated the waiver of the redemption right by the holder of the Private Placement Units in connection with the Company’s Initial Business Combination. The Private Placement Units are identical to the units sold to the public in our initial public offering and described in the Registration Statement, except for that the Private Placement Units and the shares and warrants underlying the Private Placement Units have registration rights set forth in the Registration Rights Agreement (as defined below). We also waived certain transfer restrictions under the Warrant Agreement, dated as of December 8, 2020, between the Company and Continental Stock Transfer & Trust Company, with respect to the Private Placement Warrants purchased by the Investors (the “Waiver”).

We also entered into a Registration Rights Agreement on February 15, 2022, with each of the Investors, which provides for customary demand and piggy-back registration rights for the Investors on the Private Placement Units owned by them, the Investor Shares and the Investor Private Placement Warrants.

On February 15, 2022, we issued an unsecured promissory note (the “Note”) in the principal amount of $2,000,000, of which we have drawn down $666,697 as of March 18, 2022, to our sponsor. The Note does not bear interest and is repayable in full upon consummation of our initial Business Combination. If we do not complete a Business Combination, the Note shall not be repaid and all amounts owed under it will be forgiven. Upon the consummation of a Business Combination, our sponsor shall have the option, but not the obligation, to convert the principal balance of the Note, in whole or in part, to warrants of the Company, at a price of $1.00 per warrant, the terms of which will be identical to the terms of the Sponsor Warrants The Note is subject to customary events of default, the occurrence of which automatically trigger the unpaid principal balance of the Note and all other sums payable with regard to the Note becoming immediately due and payable.

Effecting our initial Business Combination

General

We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate our initial business combination using cash from the proceeds of the Initial Public Offering, the Sponsor Warrants and the CAVU private placement, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing. We may seek to complete our initial Business Combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.

If our initial Business Combination is paid for using equity or debt, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial Business Combination or used for redemptions of our Class A common stock, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-Business Combination company, the payment of principal or interest due on indebtedness incurred in completing our initial Business Combination, to fund the purchase of other companies or for working capital.

We have not selected any Business Combination target. Accordingly, there is no current basis for investors to evaluate the possible merits or risks of the target business with which we may ultimately complete our initial Business Combination. Although our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter.

Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely affect a target business.

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Sources of Target Businesses

We anticipate that target business candidates will be brought to our attention from various sources, including our global networks, as well as other sources such as investment bankers and investment professionals. 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 may also introduce us to target businesses in which they think we may be interested on an unsolicited basis. Our sponsor, officers and directors and their respective affiliates may also 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. 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, advisory 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 interest to pursue.

In no event will our sponsor or any of our existing officers or directors, or any entity with which our sponsor or officers are affiliated, be paid any finder’s fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation by the company prior to, or in connection with, any services rendered in order to effectuate the completion of our initial business combination (regardless of the type of transaction that it is). Although none of our sponsor, officers or directors, or any of their respective affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective business combination target in connection with a contemplated initial business combination, we do not have a policy that prohibits our sponsor, officers or directors, or any of their respective affiliates, from negotiating for the reimbursement of out-of-pocket expenses by a target business. Some of our officers and directors may enter into employment or consulting agreements with the post-transaction company following our initial business combination. The presence or absence of any such fees or arrangements will not be used as a criterion in our selection process of an initial business combination candidate.

We are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with HumanCo or our sponsor, officers or directors. In the event we seek to complete our initial business combination or, subject to certain exceptions, subsequent material transactions with a company that is affiliated with HumanCo or our sponsor, officers or directors, we, or a committee of independent directors, to the extent required by applicable law or based upon the direction of our board of directors or a committee thereof, will obtain an opinion from an independent investment banking firm or another entity that commonly renders valuation opinions that such initial business combination or transaction is fair to our company from a financial point of view.

If any of our officers or directors becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.

Evaluation of a Target Business and Structuring of Our Initial Business Combination

In evaluating a prospective target business, we expect to conduct an extensive due diligence review which may encompass, as applicable and among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities and a review of financial and other information about the target and its industry. We will also utilize our management team’s operational and capital planning experience. If we determine to move forward with a particular target, we will proceed to structure and negotiate the terms of the Business Combination transaction.

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, and negotiation with, a prospective target business with which our initial Business Combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another Business Combination. The company will not pay any consulting fees to members of our management team, or their respective affiliates, for services rendered to or in connection with our initial Business Combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial Business Combination without the prior consent of our sponsor.

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Our Business Strategy

Our business strategy is to identify and complete our initial business combination with a company that complements the experiences and skills of our leadership team and can benefit from their operational expertise. We are focused on investing in and building a uniquely-positioned company within the H&W ecosystem.

HumanCo Acquisition Corp. has a differentiated ability to generate value for stockholders:

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Target identification and selection:

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Actionable, proprietary deal flow based on highly successful track record and decades of industry relationships

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Track record and value-add capabilities create preferred partner status with founders and CEOs

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Frequent touch points and strong industry relationships across all verticals

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Selection process that leverages our experience providing robust 360˚ value-add capabilities from operations to consumer-facing brand building

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History of successful entry points in private acquisitions and in public equities

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Extensive knowledge of public and private markets

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Deep understanding of risks and shifting trends in H&W

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Partnering with target company

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Unparalleled in-house value-add capabilities and resources

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Understanding the levers that drive stock performance, premium valuations and lower cost of capital

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Deep industry network, from retail relationships to national media partners, built over decades

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Established CPG platform ecosystem and preferential treatment and discounted rates with service providers

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Ability to elevate companies through branding, marketing and revenue growth

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History of top talent recruitment and development

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So long as our securities are listed on The Nasdaq Capital Market, our initial Business Combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of signing a definitive agreement in connection with our initial Business Combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or an independent valuation or appraisal firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of net assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our stockholders. However, if required under applicable law, any proxy statement that we deliver to stockholders and file with the SEC in connection with a proposed transaction will include such opinion.

Nasdaq listing rules require that our initial business combination must be with one or more target businesses that together have an aggregate fair market value equal to at least 80% of the value of the trust account (excluding any deferred underwriting fees and taxes payable on the income earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. We refer to this as the 80% of net assets test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of the 80% of net assets test. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects.

We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the outstanding equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of the 80% of net assets test. If our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.

Our Acquisition Process

Consistent with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines. Our primary investment universe is within consumer and technology markets, including food and beverage, household products and personal care, beauty and wellness, fitness, and nutrition. We intend to seek to acquire companies that fit the following criteria:

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Strong management team with founder-led culture;

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High quality, differentiated products with mission-driven, health-forward approach;

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Signs of market penetration with strong demonstrated performance in existing markets;

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Good unit economics with strong quality of revenue and velocities;

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Attractive, high-growth category with durable tailwinds; and

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Path to become or already are an industry leader.

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 from time to time our management team may deem relevant.

Our officers, directors and any of their respective affiliates may sponsor or form, and, in the case of individuals, serve as a director or officer of, other blank check companies similar to HumanCo Acquisition Corp. during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination. Our officers and directors are not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence.

SEC Form 10-K filed by HumanCo Acquisition Corp.