(Amendment No. 1)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
applicable(1)applicable(1)
anon-accelerateda 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 RuleLarge accelerated filer ☐ Accelerated filer ☐ ☒ Smaller reporting company ☒ Emerging growth company ☒
(1) | In September 2021, the registrant became a fully remote company. Accordingly, it does not maintain a principal executive office. |
EXPLANATORY Table of Contents
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Item 1. | Condensed Financial Statements. |
March 31, 2022 | December 31, 2021 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 322,022 | $ | 709,182 | ||||
Prepaid expenses | 202,137 | 227,173 | ||||||
Total Current Assets | 524,159 | 936,355 | ||||||
Forward Purchase Agreement derivative asset | 105,200 | 107,000 | ||||||
Cash and Investments held in Trust Account | 600,302,692 | 600,166,685 | ||||||
TOTAL ASSETS | $ | 600,932,051 | $ | 601,210,040 | ||||
LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND | ||||||||
Current liabilities | ||||||||
Accrued expenses | $ | 396,129 | $ | 427,817 | ||||
Accrued offering costs | 25,000 | 25,000 | ||||||
Income taxes payable | 4,060 | |||||||
Due to related party | 20,099 | 1,753 | ||||||
Total Current Liabilities | 445,288 | 454,570 | ||||||
Warrant liabilities | 8,428,800 | 16,853,334 | ||||||
Deferred underwriting fee payable | 21,000,000 | 21,000,000 | ||||||
Total Liabilities | 29,874,088 | 38,307,904 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A common stock subject to possible redemption 60,000,000 shares at $10.00per share redemption value as of March 31, 2022 and December 31, 2021 | 600,000,000 | 600,000,000 | ||||||
Stockholders’ Deficit | ||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 0shares issued or outstanding | 0 | 0 | ||||||
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; 0 shares issued or outstanding, exclusive of 60,000,000 shares subject to redemption as of March 31, 2022 and December 31, 2021 | 0 | 0 | ||||||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 15,000,000 shares issued and outstanding as of March 31, 2022 and December 31, 2021 | 1,500 | 1,500 | ||||||
Additional paid-in capital | 0 | 0 | ||||||
Accumulated deficit | (28,943,537 | ) | (37,099,364 | ) | ||||
Total Stockholders’ Deficit | (28,942,037 | ) | (37,097,864 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 600,932,051 | $ | 601,210,040 | ||||
For The Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Formation and operating costs | $ | 398,854 | $ | 1,299,835 | ||||
Loss from operations | (398,854 | ) | (1,299,835 | ) | ||||
Other income: | ||||||||
Change in fair value of warrant liabilities and forward purchase agreement derivative asset | 8,422,734 | 196,400 | ||||||
Interest earned on marketable securities held in Trust Account | 136,007 | 15,104 | ||||||
Total other incom e | 8,558,741 | 211,504 | ||||||
Income (loss) before provision for income taxes | 8,558,741 | 211,504 | ||||||
8,159,887 | (1,088,331 | ) | ||||||
Provision for income taxes | (4,060 | ) | 0 | |||||
Net income (loss) | $ | 8,155,827 | $ | (1,088,331 | ) | |||
Weighted average shares outstanding of Class A common stock | 60,000,000 | 22,000,000 | ||||||
Basic and diluted net income (loss) per share, Class A common stock | $ | 0.11 | $ | (0.03 | ) | |||
Weighted average shares outstanding of Class B common stock | 15,000,000 | 13,812,500 | ||||||
Basic net income (loss) per share, Class B common stock | $ | 0.11 | $ | (0.03 | ) | |||
Weighted average shares outstanding of Class B common stock | 15,000,000 | 15,000,000 | ||||||
Diluted net income (loss) per share, Class B common stock | $ | 0.11 | $ | (0.03 | ) | |||
Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Deficit | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance — January 1, 2022 (unaudited) | 0 | $ | 0 | 15,000,000 | $ | 1,500 | $ | 0 | $ | (37,099,364 | ) | $ | (37,097,864 | ) | ||||||||||||||
Net incom e | — | — | — | — | — | 8,155,827 | 8,155,827 | |||||||||||||||||||||
Balance – March 31, 2022 (unaudited) | 0 | 0 | 15,000,000 | $ | 1,500 | $ | 0 | $ | (28,943,537 | ) | $ | (28,942,037 | ) | |||||||||||||||
Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance — January 1, 2021 (unaudited) | 0 | $ | 0 | 15,093,750 | $ | 1,509 | $ | 23,491 | $ | (1,268 | ) | $ | 23,732 | |||||||||||||||
Proceeds in excess of fair value Private Placement Warrant s | — | — | — | — | 1,663,200 | — | 1,663,200 | |||||||||||||||||||||
Forfeiture of Founder Shares | — | — | (93,750 | ) | (9 | ) | 9 | — | — | |||||||||||||||||||
Accretion for Class A common stock to redemption amount | — | — | — | — | (1,686,700 | ) | (46,493,019 | ) | (48,179,719 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (1,088,331 | ) | (1,088,331 | ) | |||||||||||||||||||
Balance – March 31, 2021 (unaudited) | 0 | 0 | 15,000,000 | 1,500 | $ | 0 | $ | (47,582,618 | ) | $ | (47,581,118 | ) | ||||||||||||||||
Three months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income (loss) | $ | 8,155,827 | $ | (1,088,331 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Change in fair value of warrant liabilities and forward purchase agreement derivative asset | (8,422,734 | ) | (196,400 | ) | ||||
Transaction costs incurred in connection with Initial Public Offering | — | 878,490 | ||||||
Interest earned on marketable securities held in Trust Account | (136,007 | ) | (15,104 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses and other current assets | 25,036 | (556,461 | ) | |||||
Due to related party | 18,346 | — | ||||||
Accrued expenses | (31,688 | ) | 336,965 | |||||
Income taxes payable | 4,060 | — | ||||||
Net cash used in operating activities | (387,160 | ) | (640,841 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Investment of cash into trust Account | — | (600,000,000 | ) | |||||
Net cash used in investing activities | — | (600,000,000 | ) | |||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from sale of Units, net of underwriting discounts paid | — | 588,000,000 | ||||||
Proceeds from sale of Private Placements Warrants | — | 14,000,001 | ||||||
Repayment of promissory note—related party | — | (189,155 | ) | |||||
Payment of offering costs | — | (254,054 | ) | |||||
Net cash provided by Financing Activities | — | 601,556,792 | ||||||
Net Change in Cash | (387,160 | ) | 915,951 | |||||
Cash – Beginning of period | 709,182 | 185 | ||||||
Cash – End of period | $ | 322,022 | $ | 916,136 | ||||
Non-Cash Investing and Financing Activities: | ||||||||
Offering costs paid by Sponsor in exchange for issuance of founder shares | $ | — | $ | 25,000 | ||||
Offering costs paid through promissory note | $ | — | $ | 163,505 | ||||
Payment of prepaid expenses through promissory note | $ | — | $ | 8,483 | ||||
Accretion for Class A Common Stock to redemption amount | $ | — | $ | 48,179,719 | ||||
Deferred underwriting fee payable | $ | — | $ | 21,000,000 | ||||
1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Gross proceeds | $ | 600,000,000 | ||
Less: | ||||
Proceeds allocated to Public Warrants | (15,565,200 | ) | ||
Class A common stock issuance costs | (32,614,519 | ) | ||
Plus: | ||||
Accretion of carrying value to redemption value | 48,179,719 | |||
Class A common stock subject to possible redemption | $ | 600,000,000 | ||
Three Months Ended March 31, | ||||||||||||||||
2022 | 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income (loss) per common stock | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income (loss), as adjusted | $ | 6,524,662 | $ | 1,631,165 | $ | (668,573 | ) | $ | (419,758 | ) | ||||||
Denominator: | ||||||||||||||||
Basic weighted average stock outstanding | 60,000,000 | 15,000,000 | 22,000,000 | 13,812,500 | ||||||||||||
Basic net income (loss) per common stock | $ | 0.11 | $ | 0.11 | $ | (0.03 | ) | $ | (0.03 | ) |
Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
Level 3: | Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
Held-To-Maturity | Level | Amortized Cost | Gross Holding Loss | Fair Value | ||||||||||||||
Assets: | ||||||||||||||||||
March 31, 2022 | U.S. Treasury Securities (Mature on 6/14/2022) | 1 | $ | 600,236,797 | $ | (79,330 | ) | $ | 600,157,467 | |||||||||
March 31, 2022 | FPA Derivative Asset | 3 | $ | 105,200 | ||||||||||||||
December 31, 2021 | Marketable Securities held in Trust Account – Treasury Trust Money Market Fund | 1 | $ | 600,166,685 | ||||||||||||||
December 31, 2021 | FPA Derivative Asset | 3 | $ | 107,000 | ||||||||||||||
Liabilities: | ||||||||||||||||||
March 31, 2022 | Warrant Liability – Public Warrants | 1 | $ | 4,741,200 | ||||||||||||||
March 31, 2022 | Warrant Liability – Private Placement Warrants | 2 | $ | 3,687,600 | ||||||||||||||
December 31, 2021 | Warrant Liability – Public Warrants | 1 | $ | 9,480,000 | ||||||||||||||
December 31, 2021 | Warrant Liability – Private Placement Warrants | 2 | $ | 7,373,334 |
March 31, 2022 | December 31, 2021 | |||||||
Forward Purchase Price (per unit) | $ | 10.00 | $ | 10.00 | ||||
Implied Stock Price Range (per share) | $ | 9.77 | $ | 9.72 | ||||
Number of Warrants per unit | 0.20 | 0.20 | ||||||
Concluded Unit Value | $ | 9.85 | $ | 9.88 | ||||
Time to Initial Business Combination | 0.45 | 0.58 | ||||||
Risk free rate | 0.96 | % | 0.22 | % |
Private Placement | Public | Warrant Liabilities | ||||||||||
Fair value as of January 1, 2021 | $ | — | $ | — | $ | — | ||||||
Initial measurement on January 28, 2021 | 12,336,801 | 15,565,200 | 27,902,001 | |||||||||
Change in fair value | (4,963,467 | ) | (66,000 | ) | (5,029,467 | ) | ||||||
Transfer to Level 1 | — | (15,499,200 | ) | (15,499,200 | ) | |||||||
Transfer to Level 2 | (7,373,334 | ) | — | (7,373,334 | ) | |||||||
Fair value as of March 31, 2022 | $ | 0 | $ | — | $ | 0 | ||||||
Forward Purchase Agreement Derivative | ||||
Fair value as of December 31, 2021 | $ | (107,000 | ) | |
Change in valuation inputs or other assumptions | 1,800 | |||
Fair value as of March 31, 2022 | $ | (105,200 | ) | |
This Quarterly Report is being filed to amend Part I, Item 4 “Controls and Procedures”March 31, 2022. The Company’s securities filings can be accessed on the EDGAR section of the Original Quarterly ReportSEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Except as described above, this Quarterly Report does not amend, update or change any other items or disclosures contained in the Original Quarterly Report. Accordingly, this Quarterly Report does not reflect or purport to reflect any information or events occurring after November 15, 2021 or modify or update those disclosures affected by subsequent events. Accordingly, this Quarterly Report should be read in conjunction with the Original Quarterly Report and the Company’s other filings with the SEC.
HUDSON EXECUTIVE INVESTMENT CORP. III
FORM 10-Q/A FOR THE QUARTER ENDED SEPTEMBER 30, 2021
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i
Under
During the fiscal quarter ended September 30, 2021, there has been
Factors that could cause our actual results to differ materially from thoseOriginal Quarterly Report, as amended by this Quarterly Reportoffering were registered under the Securities Act on registration statements on Form10-Q/A include anyrisks described below as well as those describedInitial Public Offering, the Company consummated the sale of 9,333,334 warrants at a price of $1.50 per Private Placement Warrant in our final prospectus relatinga private placement to HEIC Sponsor III, LLC, generating gross proceeds of $14,000,001. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.Offering dated February 23, 2021, filed withOffering. In addition, the SEC on February 25, 2021 (the “Prospectus”). Anyunderwriters agreed to defer $21,000,000 in underwriting discounts and commissions.these factors could result in a significant or material adverse effect on our resultsthe use of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.We have identified a material weaknessthe proceeds generated in our internal control over financial reporting as of June 30, 2021. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.We have identified a material weakness in our internal control over financial reporting related to the Company’s accounting and reporting of complex financial instruments, including application of ASC 480-10-S99-3A to its accounting classification of public shares and earnings per share. As a resultInitial Public Offering, see Part I, Item 2 of this material weakness, our management has concluded that our disclosure controls and procedures were not effective asForm
31.1* Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1** Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2** Certification of 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* ** Inline 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* ** Inline XBRL Taxonomy Extension Schema Document 101.CAL* ** Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* ** Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* ** Inline XBRL Taxonomy Extension Labels Linkbase Document 101.PRE* ** Inline XBRL Taxonomy Extension Presentation Linkbase Document 104* ** Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS) * ** ***Previously filed.3
HUDSON EXECUTIVE INVESTMENT CORP. III | ||||||
Date: | By: | /s/ Douglas G. Bergeron | ||||
Name: | Douglas G. Bergeron | |||||
Title: | Chief Executive Officer (Principal Executive Officer) | |||||
Date: | By: | /s/ Ira Mosberg | ||||
Name: | Ira Mosberg | |||||
Title: | Chief Financial Officer (Principal Financial and Accounting Officer) |
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