| Description of Organization and Business Operations | Note 1 — Description of Organization
and Business Operations FS Development Corp. II (the “Company”)
is a blank check company incorporated in Delaware on August 21, 2020. The Company was formed for the purpose of effecting a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business
Combination”). The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with
emerging growth companies. As of September 30, 2021, the Company had not
commenced any operations. All activity for the period from August 21, 2020 (inception) through September 30, 2021 relates to the Company’s
formation and the initial public offering (the “Initial Public Offering”) described below, and, subsequent to the Initial
Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after
the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest
income from the proceeds derived from the Initial Public Offering (as defined below). The Company has selected December 31 as its fiscal
year end. The Company’s sponsor is FS Development
Holdings II, LLC, a Delaware limited liability company (the “Sponsor”). The registration statements for the Company’s
Initial Public Offering became effective on February 16, 2021. On February 19, 2021, the Company consummated its Initial Public Offering
of 20,125,000 shares of Class A common stock, par value $0.0001 per share (“Class A Common Stock”) including the issuance
of 2,625,000 shares of Class A Common Stock as a result of the underwriter’s exercise in full of its over-allotment option, (each,
a “Public Share” and collectively, the “Public Shares”) at $10.00 per share, generating gross proceeds of approximately
$201.3 million, and incurring offering costs of approximately $11.5 million, of which approximately $7.0 million was for deferred underwriting
commissions (see Note 5). Simultaneously with the closing of the Initial
Public Offering, the Company consummated the private placement (the “Private Placement”) of 602,500 shares of Class A Common
Stock (each, a “Private Placement Share” and collectively, the “Private Placement Shares”), at a price of $10.00
per Private Placement Share to the Sponsor, generating proceeds of approximately $6.0 million (see Note 4). Upon the closing of the Initial Public Offering
and the Private Placement, approximately $201.3 million ($10.00 per share of Class A Common Stock) of the net proceeds of the sale of
the Public Shares in the Initial Public Offering and of the Private Placement Shares in the Private Placement were placed in a trust account
(“Trust Account”) located in the United States, with Continental Stock Transfer & Trust Company acting as trustee, and
are 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 of 1940, as amended (the “Investment Company Act”), which will be invested 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. The Company’s 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 Shares,
although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There
is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial
Business Combinations having 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 the agreement to enter
into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company
owns or acquires 50% or more of the 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 (the “Investment
Company Act”). The Company will provide the holders (the “Public
Stockholders”) of the Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting
called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder
approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders
will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially anticipated
to be $10.00 per Public Share). The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not
be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 5). These Public Shares
will be recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance
with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic
480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination if a majority of the shares
voted are voted in favor of the Business Combination. The Company will not redeem the Public Shares in an amount that would cause its
net tangible assets to be less than $5,000,001. If a stockholder vote is not required by law and the Company does not decide to hold a
stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation
(the “Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and
Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however,
stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal
reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant
to the tender offer rules. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they
vote for or against the proposed transaction. If the Company seeks stockholder approval in connection with a Business Combination, the
Initial Stockholders (as defined below) agreed to vote their Founder Shares (as defined below in Note 4), their Private Placement Shares
and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition, the Initial
Stockholders agreed to waive their redemption rights with respect to their Founder Shares, their Private Placement Shares and Public Shares
in connection with the completion of a Business Combination. The Certificate of Incorporation provides that
a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert
or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)),
will be restricted from redeeming its shares with respect to more than an aggregate of 20% of the Public Shares, without the prior consent
of the Company. The Sponsor and the Company’s officers and
directors (the “Initial Stockholders”) agreed not to propose an amendment to the Certificate of Incorporation to modify the
substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business
Combination within the Combination Period (as defined below) or with respect to any other material provisions relating to stockholders’
rights or pre-initial Business Combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem
their Public Shares in conjunction with any such amendment. If the Company is unable to complete a Business
Combination within 24 months from the closing of the Initial Public Offering, or February 19, 2023, or during any extended period of time
that the Company may have to consummate a Business Combination as a result of an amendment to the Certificate of Incorporation (the “Combination
Period”), the Company 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 taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding
Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive
further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of the remaining stockholders and the board of directors, liquidate and dissolve, subject in each case to the Company’s obligations
under Delaware law to provide for claims of creditors and the requirements of other applicable law. The Initial Stockholders agreed to waive their
rights to liquidating distributions from the Trust Account with respect to the Founder Shares and Private Placement Shares if the Company
fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders acquire Public Shares in
or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public
Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriter has agreed to waive its
rights to the deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business
Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account
that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share
value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.00. In order to protect
the amounts held in the Trust Account, the Sponsor agreed to be liable to the Company if and to the extent any claims by a third party
(except for the Company’s independent registered public accounting firm) for services rendered or products sold to the Company,
or a prospective target business with which the Company has entered into a letter of intent, confidentiality or other similar agreement
or business combination agreement (a “Target”), reduce the amount of funds in the Trust Account to below the lesser of (i)
$10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the
Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, less taxes payable, provided that
such liability will not apply to any claims by a third party or Target that executed a waiver of any and all rights to the monies held
in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of
the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as
amended (the “Securities Act”). The Company will seek to reduce the possibility that the Sponsor will have to indemnify the
Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other
entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any
kind in or to monies held in the Trust Account. Proposed Business Combination and Related
Transaction On June 29, 2021, the Company entered into an
agreement and plan of merger (the “Merger Agreement”) by and among the Company, Orchard Merger Sub, Inc., a Delaware corporation,
a wholly-owned subsidiary of the Company (“Merger Sub”), Pardes Biosciences, Inc., a Delaware corporation (“Pardes”)
and Shareholder Representative Services LLC, solely in its capacity as the representative, agent and attorney-in-fact of the securityholders
of Pardes (in such capacity, the “Stockholders’ Representative”). The Merger Agreement provides, among other things,
that on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Pardes, with Pardes surviving as
a wholly-owned subsidiary of the Company (the “Merger”). Upon the closing of the Merger (the “Closing”), it is
anticipated that the Company will change its name to “Pardes Biosciences, Inc.” and is referred to herein as “New Pardes”
as of the time following such change of name. The date on which the Closing actually occurs is hereinafter referred to as the “Closing
Date.” Consideration and Structure Under the Merger Agreement, the Company has agreed
to acquire all of the outstanding equity interests of Pardes in exchange for 32,500,000 shares of Class A Common Stock, to be paid at
the effective time of the Merger. Pursuant to the Merger Agreement, at or prior
to the effective time of the Merger, each option exercisable for Pardes equity that is outstanding immediately prior to the effective
time of the Merger shall be assumed by the Company and continue in full force and effect on the same terms and conditions as are currently
applicable to such options, subject to adjustments to exercise price and number of shares of Class A Common Stock issued upon exercise. Representations, Warranties and Covenants The parties to the Merger Agreement have agreed
to customary representations and warranties for transactions of this type. The representations and warranties of Pardes made under the
Merger Agreement will not survive the Closing. In addition, the parties to the Merger Agreement agreed to be bound by certain customary
covenants for transactions of this type, including, among others, covenants with respect to the conduct of Pardes, the Company and their
respective subsidiaries during the period between execution of the Merger Agreement and the Closing. The covenants made under the Merger
Agreement will not survive the Closing. Each of the parties to the Merger Agreement has agreed to use its reasonable best efforts to cause
all actions and things necessary to consummate and expeditiously implement the Merger. Conditions to Closing Under the Merger Agreement, the obligations of
the parties to consummate the Merger are subject to the satisfaction or waiver of certain customary closing conditions of the respective
parties, including, without limitation: (i) the approval and adoption of the Merger Agreement and transactions contemplated thereby by
requisite vote of the Company’s stockholders (the “Company Stockholder Approval”) and Pardes’ stockholders (the
“Pardes Stockholder Approval”); (ii) the receipt of consents or approvals from the applicable governmental, regulatory or
administrative authorities; (iii) the aggregate cash proceeds from Company’s trust account, together with the proceeds from the
Subscriptions (as defined below), equaling no less than $100,000,000 (after deducting any amounts paid to Company stockholders that exercise
their redemption rights in connection with the Merger and net of the Company’s unpaid liabilities), (iv) (A) the representations
and warranties of the Company, Pardes and Merger Sub contained in the Merger Agreement (other than each party’s respective Fundamental
Representations, as defined in the Merger Agreement) being true and correct as of the date of the Merger Agreement and as of the Closing
Date, except for any failure to be true and correct that would not have or reasonably be expected to have a Material Adverse Effect (as
defined in the Merger Agreement) and (B) each party’s respective Fundamental Representations being true and correct as of the date
of the Merger Agreement and as of the Closing Date, except for de minimis inaccuracies; (v) the absence of a Material Adverse Effect since
the date of the Merger Agreement; (vi) the Company has not redeemed the Class A Common Stock of the Company in an amount that would cause
the Company to have net tangible assets of less than $5,000,001; and (vii) the Company’s initial listing application with Nasdaq
in connection with the Merger has been conditionally approved and, immediately following the effective time of the Merger, the Company
has satisfied any applicable initial and continuing listing requirements of Nasdaq, and the Company has not received any notice of non-compliance
therewith, and the shares of the Company’s Class A Common Stock has been approved for listing on Nasdaq. Liquidity and Capital Resources As of September 30, 2021, the Company had approximately
$48,000 in cash, and working capital deficit of approximately $1.8 million (not taking into account approximately $149,000 of tax obligations
that may be paid using investment income classified in the Trust Account). The Company’s liquidity needs prior to the
consummation of the Initial Public Offering were satisfied through the payment of $25,000 from the Sponsor to cover certain offering costs
on behalf of the Company in exchange for issuance of Founder Shares (as defined in Note 4), and loan proceeds from the Sponsor of approximately
$200,000 under the Note (see Note 4). The Company repaid the Note in full on February 19, 2021. Subsequent to the consummation of the
Initial Public Offering, the Company’s liquidity has been satisfied through the net proceeds from the consummation of the Initial
Public Offering and the Private Placement held outside of the Trust Account. In addition, in order to finance transaction costs in connection
with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may,
but are not obligated to, provide the Company Working Capital Loans (as defined in Note 4). As of September 30, 2021, there were no amounts
outstanding under any Working Capital Loans. Based on the foregoing, management believes that
the Company will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of
the Company’s officers and directors to meet its needs through the earlier of the consummation of a Business Combination or one
year from this filing. Over this time period, the Company will be using the funds held outside of the Trust Account 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. |
