Part I [Business](index=5&type=section&id=Item%201.%20Business) Digital Transformation Opportunities Corp. is a blank check company seeking a healthcare technology business combination by March 2023 - The company is a **blank check company** formed for a business combination[8](index=8&type=chunk) - The company has until **March 12, 2023** (24 months from its IPO closing) to complete an initial business combination, or it will be required to liquidate and return funds held in the Trust Account to public stockholders[8](index=8&type=chunk) - The company's business strategy is to merge with a **high-growth company** that has leveraged technology to improve the healthcare industry, focusing on sectors like **Consumer-Driven Healthcare** and **Value-Based Healthcare**[15](index=15&type=chunk)[16](index=16&type=chunk)[18](index=18&type=chunk) Initial Public Offering and Trust Account Details | Metric | Value | | :--- | :--- | | IPO Date | March 12, 2021 | | Units Offered | 33,350,000 Units | | Price per Unit | $10.00 | | Gross Proceeds | $333.5 million | | Amount Placed in Trust Account | $333.5 million ($10.00 per Unit) | [Company Overview](index=5&type=section&id=Company%20Overview) Digital Transformation Opportunities Corp. is a blank check company that completed its IPO in March 2021, raising **$333.5 million** - The company is a **blank check company** formed for the purpose of a business combination[8](index=8&type=chunk) - Simultaneously with the IPO, the Sponsor purchased **6,113,333 Private Placement Warrants** at **$1.50 each**, generating approximately **$9.2 million** in gross proceeds[8](index=8&type=chunk) - The company must complete a business combination by **March 12, 2023**, or it will cease operations and redeem public shares[8](index=8&type=chunk) [Our Management Team and Board of Directors](index=5&type=section&id=Our%20Management%20Team%20and%20Board%20of%20Directors) The company's management and board, led by Kevin Nazemi and Kyle Francis, bring extensive healthcare and technology experience - The management team and board possess collective experience as entrepreneurs, operators, executives, and investors in the healthcare and technology sectors[9](index=9&type=chunk) - **Kevin Nazemi**, Chairman & CEO, co-founded Oscar Health and Renew Health[10](index=10&type=chunk) - The team's strengths include deep healthcare industry relationships, a differentiated approach to value creation, a robust pipeline of potential targets, and experience positioning private companies for public markets[12](index=12&type=chunk) [Market Opportunity](index=7&type=section&id=Market%20Opportunity) The U.S. healthcare industry, with **$4.1 trillion** spending in 2020, offers a significant market for digital transformation - U.S. healthcare spending reached **$4.1 trillion**, or **$12,530 per person**, in 2020, representing **19.7% of GDP**[13](index=13&type=chunk) - The company identifies significant opportunities for digital transformation to disrupt and improve the healthcare system, citing examples like GoodRx, Livongo, and Teladoc[14](index=14&type=chunk) [Business Strategy and Acquisition Criteria](index=8&type=section&id=Business%20Strategy%20and%20Acquisition%20Criteria) The company's strategy targets high-growth, technology-leveraged healthcare companies, focusing on consumer-driven and value-based healthcare - The strategy focuses on merging with a **high-growth company** that has leveraged technology to improve the healthcare industry[15](index=15&type=chunk) - Key investment themes include **Consumer-Driven Healthcare** and **Value-Based Healthcare**[16](index=16&type=chunk)[18](index=18&type=chunk) - Acquisition criteria include: a **technology-first business model**, compelling customer value proposition, strong competitive position, favorable industry tailwinds, attractive unit economics, and an entrepreneurial management team[19](index=19&type=chunk) [Initial Business Combination](index=10&type=section&id=Initial%20Business%20Combination) The initial business combination must be at least **80%** of the Trust Account value, ensuring a controlling interest and public stockholder redemption rights - The initial business combination must have a fair market value of at least **80%** of the Trust Account value[21](index=21&type=chunk)[31](index=31&type=chunk) - The company will only complete a business combination if it acquires **50% or more** of the target's outstanding voting securities or a controlling interest[21](index=21&type=chunk)[31](index=31&type=chunk) - Public stockholders have the opportunity to redeem their Class A common stock for cash upon completion of the initial business combination[39](index=39&type=chunk) - If no business combination is completed by **March 12, 2023**, the company will liquidate and return funds in the Trust Account to public shareholders[47](index=47&type=chunk) [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks as a SPAC, including potential liquidation by March 2023, conflicts of interest, and a material weakness in internal controls - The company is a newly incorporated entity with **no operating history**, and its management team lacks prior blank check company experience[136](index=136&type=chunk) - Failure to complete an initial business combination by the **March 12, 2023** deadline will result in liquidation, with public stockholders receiving approximately **$10.00 per share** and worthless warrants[59](index=59&type=chunk) - The Sponsor's and insiders' financial interests may conflict with public stockholders, potentially incentivizing approval of a less-than-ideal transaction if a business combination is not completed[132](index=132&type=chunk) - A **material weakness** in internal control over financial reporting has been identified related to accounting for complex financial instruments, potentially affecting accurate financial reporting[134](index=134&type=chunk) - The independent auditor included a **"going concern"** explanatory paragraph, citing mandatory liquidation if a business combination is not completed by the deadline[64](index=64&type=chunk) [Unresolved Staff Comments](index=55&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - No unresolved staff comments[148](index=148&type=chunk) [Properties](index=55&type=section&id=Item%202.%20Properties) The company's executive offices are located at **10207 Clematis Court, Los Angeles, CA 90077**, considered adequate for current operations - The company's executive offices are located at **10207 Clematis Court, Los Angeles, CA 90077**[148](index=148&type=chunk) [Legal Proceedings](index=55&type=section&id=Item%203.%20Legal%20Proceedings) The company reports no legal proceedings - No legal proceedings are currently reported[148](index=148&type=chunk) [Mine Safety Disclosures](index=55&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[148](index=148&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=56&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's units, Class A common stock, and warrants trade on Nasdaq, with IPO and private placement proceeds deposited into a trust account - The company's securities trade on Nasdaq under symbols **DTOCU** (Units), **DTOC** (Class A common stock), and **DTOCW** (Warrants)[151](index=151&type=chunk) - The company has not paid and does not intend to pay cash dividends prior to completing a business combination[152](index=152&type=chunk) - Gross proceeds of **$333.5 million** from the IPO and approximately **$9.2 million** from the private placement were generated, with **$333.5 million** deposited into the Trust Account[153](index=153&type=chunk)[155](index=155&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=57&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For the year ended December 31, 2021, the company reported **$8.39 million** net income, primarily from a non-cash gain on warrant liabilities, with management noting going concern doubt Results of Operations Summary | Item | For the year ended Dec 31, 2021 | For the period from Nov 17, 2020 to Dec 31, 2020 | | :--- | :--- | :--- | | Loss from Operations | $(1,632,489) | $(834) | | Change in fair value of warrant liabilities | $10,666,695 | $0 | | **Net Income (Loss)** | **$8,394,719** | **$(834)** | - As of December 31, 2021, the company held approximately **$0.8 million** in its operating bank account and **$0.2 million** in working capital[160](index=160&type=chunk) - Management concluded that the **March 12, 2023** mandatory liquidation date, if a business combination is not consummated, raises **substantial doubt** about the company's ability to continue as a going concern[162](index=162&type=chunk) - A critical accounting policy classifies warrants as liabilities measured at fair value, with changes recognized in the Statement of Operations due to warrant agreement provisions precluding equity classification[165](index=165&type=chunk) [Controls and Procedures](index=62&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were **not effective** as of December 31, 2021, due to a **material weakness** in internal control over financial reporting - Management concluded that disclosure controls and procedures were **not effective** as of December 31, 2021[175](index=175&type=chunk) - The ineffectiveness stems from a **material weakness** in internal control over financial reporting related to accounting for complex equity and equity-linked instruments[175](index=175&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=63&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company is led by Kevin Nazemi and Kyle Francis, with a four-member board including three independent directors, and established audit and compensation committees Directors and Executive Officers | Name | Age | Position | | :--- | :-- | :--- | | Kevin Nazemi | 40 | Chairman of the Board and Chief Executive Officer | | Kyle Francis | 48 | Chief Financial Officer and Secretary | | Bradley Fluegel | 60 | Director | | Jim Moffatt | 63 | Director | | Heather Zynczak | 50 | Director | - The board has two standing committees: an **audit committee** and a **compensation committee**[183](index=183&type=chunk)[185](index=185&type=chunk) - The board determined that **Bradley Fluegel, Jim Moffatt, and Heather Zynczak** are independent directors[203](index=203&type=chunk) [Executive Compensation](index=66&type=section&id=Item%2011.%20Executive%20Compensation) No cash compensation is paid to executive officers or directors, though independent directors and the CFO received Class B common stock, and out-of-pocket expenses are reimbursed - No compensation is paid to the Sponsor, CEO, CFO, or directors for services rendered to effectuate a business combination[189](index=189&type=chunk) - In March 2021, independent directors each received **25,000 shares** of Class B common stock, and CFO Kyle Francis received **150,000 shares** of Class B common stock[189](index=189&type=chunk) - Individuals will be reimbursed for out-of-pocket expenses incurred on the company's behalf[191](index=191&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=67&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of April 11, 2022, officers and directors as a group beneficially owned **20.0%** of outstanding common stock, with the Sponsor as the largest holder Beneficial Ownership as of April 11, 2022 | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Approximate Percentage of Outstanding Common Stock | | :--- | :--- | :--- | | Kevin Nazemi | 8,112,500 (2) | 19.5 % | | Kyle Francis | 150,000 (3) | * | | Bradley Fluegel | 25,000 (3) | * | | Jim Moffatt | 63 | Director | | Heather Zynczak | 25,000 (3) | * | | Digital Transformation Sponsor LLC | 8,112,500 (3) | 19.5 % | | All officers and directors as a group (five individuals) | 8,337,500 (3) | 20.0 % | | Glazer Capital, LLC | 2,854,230 | 6.8 % | - The initial stockholders beneficially own **20.0%** of the issued and outstanding common stock and have the right to elect all directors prior to the initial business combination[195](index=195&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=68&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company has several related party transactions, primarily with its Sponsor, including the purchase of Founder Shares and Private Placement Warrants - The Sponsor purchased **8,625,000 shares** of Class B common stock for **$25,000** and later transferred some shares to directors and the CFO[197](index=197&type=chunk) - The Sponsor purchased **6,113,333 Private Placement Warrants** for **$9.17 million**[197](index=197&type=chunk) - The Sponsor provided a **$300,000** non-interest-bearing promissory note for IPO expenses, fully repaid on **March 12, 2021**[199](index=199&type=chunk) - The board determined that **Bradley Fluegel, Jim Moffatt, and Heather Zynczak** are independent directors[203](index=203&type=chunk) [Principal Accounting Fees and Services](index=70&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Marcum LLP serves as the principal accountant, with aggregate audit fees of **$118,965** in 2021 and **$15,450** in 2020, and all services pre-approved by the audit committee Fees Paid to Marcum LLP | Fee Type | 2021 | 2020 | | :--- | :--- | :--- | | Audit Fees | $118,965 | $15,450 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | Part IV [Exhibits, Financial Statement Schedules](index=71&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Form 10-K, including financial statements and various exhibits such as the Certificate of Incorporation and Warrant Agreement - The financial statements are filed as part of this Form 10-K[206](index=206&type=chunk)[207](index=207&type=chunk) - Exhibits filed include the Amended and Restated Certificate of Incorporation, Warrant Agreement, and Registration and Stockholder Rights Agreement[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) Financial Statements [Report of Independent Registered Public Accounting Firm](index=76&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Marcum LLP issued an opinion on the financial statements, including an explanatory paragraph expressing **substantial doubt** about the company's ability to continue as a going concern - The auditor's report contains an explanatory paragraph regarding the company's ability to continue as a **going concern**[231](index=231&type=chunk) - The going concern uncertainty stems from the **March 12, 2023** deadline to complete a business combination, leading to liquidation if unsuccessful[231](index=231&type=chunk) [Financial Statements Data](index=77&type=section&id=Financial%20Statements%20Data) As of December 31, 2021, total assets were **$334.9 million**, with total liabilities of **$22.3 million**, and a net income of **$8.4 million** for the year Balance Sheet Highlights (as of Dec 31) | Account | 2021 | 2020 | | :--- | :--- | :--- | | Cash | $803,309 | $0 | | Cash and securities held in Trust Account | $333,520,259 | $0 | | **Total Assets** | **$334,879,010** | **$9,572** | | Warrant liability | $9,555,575 | $0 | | Deferred underwriting fee | $11,672,500 | $0 | | **Total Liabilities** | **$22,256,543** | **$10,406** | | Class A Common Stock subject to possible redemption | $333,500,000 | $0 | | Total stockholders' deficit | $(20,877,533) | $(834) | Statement of Operations Highlights | Account | Year Ended Dec 31, 2021 | Period Ended Dec 31, 2020 | | :--- | :--- | :--- | | Loss from Operations | $(1,632,489) | $(834) | | Change in fair value of warrant liability | $10,666,695 | $0 | | **Net Income (Loss)** | **$8,394,719** | **$(834)** | [Notes to Financial Statements](index=81&type=section&id=Notes%20to%20Financial%20Statements) The notes detail the company's SPAC organization, IPO, private placement, related party transactions, and key accounting policies, including warrant classification as liabilities - The company must complete a business combination within **24 months** from the **March 12, 2021** IPO closing or face liquidation, raising **substantial doubt** about its ability to continue as a going concern[242](index=242&type=chunk)[244](index=244&type=chunk)[247](index=247&type=chunk) - Warrants are classified as liabilities and measured at fair value at each reporting period, with changes affecting the statement of operations[259](index=259&type=chunk) - The fair value of Private Placement Warrants is determined using a **Monte Carlo simulation model**, a **Level 3 fair value measurement** due to unobservable inputs like business combination probability[286](index=286&type=chunk)[291](index=291&type=chunk)

Financial Performance - The company reported a net income of approximately $9.0 million for the nine months ended September 30, 2021, which included a loss from operations of $0.69 million and a gain from the change in fair value of warrant liabilities of $10.3 million [108]. - The company has not completed a Business Combination within 24 months from the IPO closing date, which may lead to the redemption of public shares [107]. - The company has not considered the effect of warrants in the calculation of diluted income (loss) per share, resulting in basic and diluted net income (loss) per share being the same [117]. IPO and Proceeds - The company completed its IPO on March 12, 2021, raising gross proceeds of $333.5 million from the sale of 33,350,000 units at $10.00 per unit, incurring offering costs of approximately $18.9 million [104]. - The company raised gross proceeds of $333.35 million from its IPO of 33,350,000 Units at $10.00 per Unit, including the underwriters' full exercise of the Over-Allotment Option [137]. - Offering costs incurred during the IPO were approximately $18.83 million, which included $11.67 million in deferred underwriting commissions [137]. - The company has placed $333.5 million of net proceeds from the IPO and Private Placement into a trust account, which will be used for a Business Combination [106]. - The company placed $2.1 million of net proceeds from the IPO and certain proceeds from the Private Placement Warrants into the Trust Account [137]. Financial Position - As of September 30, 2021, the company had approximately $0.9 million in its operating bank account and working capital of approximately $1.1 million [109]. - The company has no long-term debt obligations or significant liabilities as of the reporting date [112]. - The company’s management believes it will have sufficient working capital to meet its needs through the earlier of the consummation of a Business Combination or one year from the filing date [111]. Internal Controls and Reporting - The company identified a material weakness in internal control over financial reporting related to complex financial instruments as of September 30, 2021 [132]. - The company continues to evaluate steps to remediate the identified material weakness, which may be time-consuming and costly [133]. - There were no changes in internal control over financial reporting that materially affected the company during the three months ended September 30, 2021 [130]. - The company has not identified any new material weaknesses as of the date of the Quarterly Report, but future weaknesses could impair financial reporting [134]. - The company’s internal controls are necessary to provide reliable financial reports and prevent fraud [133]. - The company’s management has acknowledged the inherent limitations in disclosure controls and procedures, which may not prevent all errors or instances of fraud [129]. Risk Factors - The company’s risk factors, which could materially adversely affect its business, were disclosed in the final prospectus for the IPO filed with the SEC on March 1, 2021 [131].