COME HEAL References to "we", "us", "our" or the "Company" are to
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). We have based these forward-looking statements on our current
expectations and projections about future events. These forward-looking
statements are subject to known and unknown risks, uncertainties and assumptions
about us that may cause our actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "should," "could," "would," "expect,"
"plan," "anticipate," "believe," "estimate," "continue," or the negative of such
terms or other similar expressions. Such statements include, but are not limited
to, possible business combinations and the financing thereof, and related
matters, as well as all other statements other than statements of historical
fact included in this Form 10-Q. Factors that might cause or contribute to such
a discrepancy include, but are not limited to, those described in our other
Overview
We are a blank check company incorporated in
The registration statement for our Initial Public Offering became effective on
Simultaneously with the closing of the Initial Public Offering, we consummated
the Private Placement of 12,833,333 Private Placement Warrants, at a price of
Upon the closing of the Initial Public Offering and the Private Placement,
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The issuance of additional shares of our stock in a Business Combination:
? may significantly dilute the equity interest of investors in Initial
Public Offering, which dilution would increase if the anti-dilution
provisions in the Class B common stock resulted in the issuance of Class A
shares on a greater than one-to-one basis upon conversion of the Class B
common stock;
? may subordinate the rights of holders of our common stock if preferred
stock is issued with rights senior to those afforded our common stock;
? could cause a change of control if a substantial number of shares of our
common stock is issued, which may affect, among other things, our ability
to use our net operating loss carry forwards, if any, and could result in
the resignation or removal of our present officers and directors;
? may have the effect of delaying or preventing a change of control of us by
diluting the stock ownership or voting rights of a person seeking to
obtain control of us;
? may adversely affect prevailing market prices for our Units, Class A
common stock and/or warrants; and
? may not result in adjustment to the exercise price of our warrants.
Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or owners of a target, it could result in:
? default and foreclosure on our assets if our operating revenues after an
initial Business Combination are insufficient to repay our debt
obligations;
? acceleration of our obligations to repay the indebtedness even if we make
all principal and interest payments when due if we breach certain
covenants that require the maintenance of certain financial ratios or
reserves without a waiver or renegotiation of that covenant;
? our immediate payment of all principal and accrued interest, if any, if
the debt is payable on demand;
? our inability to obtain necessary additional financing if the debt
contains covenants restricting our ability to obtain such financing while
the debt is outstanding;
? our inability to pay dividends on our common stock;
? using a substantial portion of our cash flow to pay principal and interest
on our debt, which will reduce the funds available for dividends on our
common stock if declared, our ability to pay expenses, make capital
expenditures and acquisitions, and fund other general corporate purposes;
? limitations on our flexibility in planning for and reacting to changes in
our business and in the industry in which we operate;
? increased vulnerability to adverse changes in general economic, industry
and competitive conditions and adverse changes in government regulation;
? limitations on our ability to borrow additional amounts for expenses,
capital expenditures, acquisitions, debt service requirements, and
execution of our strategy; and
? other purposes and other disadvantages compared to our competitors who
have less debt.
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Extension Meeting
Commencing on
If we are unable to complete a Business Combination within 24 months from the
closing of the Initial Public Offering, or
Results of Operations
Our entire activity since inception through
For the three months ended
For the three months ended
For the nine months ended
For the nine months ended
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Liquidity and Going Concern
As indicated in the accompanying unaudited condensed financial statements, at
Our liquidity needs have been satisfied prior to the completion of the Initial
Public Offering through a capital contribution from our Sponsor of
While we do not believe we will need to raise additional funds in order to meet
the expenditures required for operating our business, our Sponsor or an
affiliate of our Sponsor, or certain of our officers and directors may, but are
not obligated to, loan us funds as may be required ("Working Capital Loans"). On
At our Sponsor's option, at any time prior to payment in full of the principal
balance of the Loan Note, our Sponsor may elect to convert all or any portion of
the unpaid principal balance of the Loan Note into that number of warrants, each
whole warrant exercisable for one share of common stock of our Company (the
"Conversion Warrants"), equal to: (x) the portion of the principal amount of the
Loan Note being converted, divided by (y)
On
In connection with the Company's assessment of going concern considerations in
accordance with the authoritative guidance in Financial Accounting Standard
Board ("FASB") Accounting Standards Codification ("ASC") ASC Topic 205-40,
"Presentation of Financial Statements - Going Concern," management has
determined that the mandatory liquidation and subsequent dissolution, should the
Company be unable to complete a business combination, raises substantial doubt
about the Company's ability to continue as a going concern. The Company has
until
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Contractual Obligations
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans), were entitled to registration rights pursuant to a registration rights agreement signed upon the consummation of the Initial Public Offering. These holders were entitled to certain demand and "piggyback" registration rights. However, the registration rights agreement provided that we would not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters are entitled to an underwriting discount of
Deferred Legal fees
We have an agreement to obtain legal advisory services pursuant to which our
legal counsel has agreed to defer their fees until the closing of the Business
Combination. The deferred fees will become payable to the legal counsel in the
event the Company completes a Business Combination. As of
Administrative Services Agreement
Commencing on the date that our securities were first listed on the NYSE through
the earlier of consummation of the initial Business Combination and the
liquidation, we agreed to pay an affiliate of our Sponsor a total of
Contingent Fee Arrangement
On
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Critical Accounting Policies and Estimates
This management's discussion and analysis of our financial condition and results
of operations is based on our condensed financial statements, which have been
prepared in accordance with
Investments Held in Trust Account
Our portfolio of investments is comprised of
Derivative Warrant Liabilities
We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, "Derivatives and Hedging" ("ASC 815"). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The warrants issued in connection with the Initial Public Offering (the "Public
Warrants") and the Private Placement Warrants are recognized as derivative
liabilities in accordance with ASC 815. Accordingly, we recognize the warrant
instruments as liabilities at fair value and adjusts the instruments to fair
value at each reporting period. The liabilities are subject to re-measurement at
each balance sheet date until exercised, and any change in fair value is
recognized in our condensed statements of operations. The fair value of the
Public Warrants issued in connection with the Public Offering and Private
Placement Warrants were initially measured at fair value using a Monte Carlo
simulation model and subsequently, the fair value of the Private Placement
Warrants have been estimated using a Monte Carlo simulation model each
measurement date. The fair value of Public Warrants issued in connection with
the Initial Public Offering have subsequently been measured based on the listed
market price of such warrants. As the transfer of Private Placement Warrants to
anyone who is not a permitted transferee would result in the Private Placement
Warrants having substantially the same terms as the Public Warrants, we
determined that the fair value of each Private Placement Warrant is equivalent
to that of each Public Warrant. The fair value of the Warrants as of
Convertible Promissory Note -
We have elected the fair value option to account for our Convertible Promissory Note - related party with our Sponsor as defined and more fully described in the Notes to the unaudited condensed financial statements. As a result of applying the fair value option, the Company records each draw at fair value with a gain or loss recognized at issuance, and subsequent changes in fair value are recorded as change in the fair value of our Convertible Promissory Note - related party on the condensed statements of operations. The fair value is based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management's and, if applicable, an independent third-party valuation firm's own assumption about the assumptions a market participant would use in pricing the asset or liability.
3 NTD: Accountants to confirm.
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Offering Costs Associated with the Initial Public Offering
Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs are allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with warrant liabilities are expensed as incurred, presented as non-operating expenses in the condensed statements of operations. Offering costs associated with the Class A common stock are charged against their carrying value upon the completion of the Initial Public Offering. Deferred underwriting commissions are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in
accordance with the guidance in ASC 480. Class A common stock subject to
mandatory redemption (if any) is classified as liability instruments and are
measured at fair value. Conditionally redeemable Class A common stock (including
Class A common stock that features redemption rights that are either within the
control of the holder or subject to redemption upon the occurrence of uncertain
events not solely within our control) are classified as temporary equity. At all
other times, Class A common stock is classified as stockholders' equity. Our
Class A common stock feature certain redemption rights that are considered to be
outside of our control and subject to the occurrence of uncertain future events.
Accordingly, as of
We recognize changes in redemption value immediately as they occur and adjusts the carrying value of the Class A common stock subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering, we recognized the remeasurement from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit. Subsequent changes in redemption value are recognized and presented as remeasurement of Class A common stock to redemption value on the accompanying statement of changes in stockholders' equity (deficit) included in the condensed financial statements in Part 1 Item 1 of this Form 10-Q.
Net Income Per Share of Common Stock
We comply with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." We have two classes of shares, which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of shares. Net income per common share is calculated by dividing the net income by the weighted average shares of common stock outstanding for the respective period.
The calculation of diluted net income per common stock does not consider the effect of the warrants issued in connection with the Initial Public Offering (including exercise of the over-allotment option) and the Private Placement to purchase an aggregate of 34,395,833 shares of common stock in the calculation of diluted income per share, because their exercise is contingent upon future events. Remeasurement associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
Recent Accounting Pronouncements
See Note 2 to the unaudited condensed financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.
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JOBS Act
On
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company", we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until we are no longer an "emerging growth company," whichever is earlier.
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