☒ | 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 |
Delaware | 85-2658967 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
570 Lexington Avenue, 35th Floor
New York, New York 10022
Title of each class |
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Units, each consisting of one share of Class A common stock and one-fourth of one redeemable warrant | HCIIU | The Nasdaq Stock Market LLC | ||
Class A common stock, par value $0.0001 per share | HCII | The Nasdaq Stock Market LLC | ||
Warrants, each whole warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share | HCIIW | The Nasdaq Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-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. |
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March 31, 2021 | December 31, 2020 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 889,437 | $ | 185 | ||||
Prepaid expenses | 444,548 | — | ||||||
Due from Sponsor | 132,376 | — | ||||||
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Total Current Assets | 1,466,361 | 185 | ||||||
Deferred offering costs | — | 394,480 | ||||||
Marketable securities held in Trust Account | 250,016,381 | — | ||||||
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TOTAL ASSETS | $ | 251,482,742 | $ | 394,665 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accrued expenses | $ | 411,545 | $ | 1,253 | ||||
Accrued offering costs | 114,958 | 344,030 | ||||||
Promissory note – related party | — | 25,650 | ||||||
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Total Current Liabilities | 526,503 | 370,933 | ||||||
FPA liability | 76,375 | — | ||||||
Warrant liability | 8,515,000 | — | ||||||
Deferred underwriting fee payable | 8,750,000 | — | ||||||
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Total Liabilities | 17,867,878 | 370,933 | ||||||
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Commitments and Contingencies | ||||||||
Class A common stock subject to possible redemption 22,861,486 and no shares at redemption value as of March 31, 2021 and December 31, 2020, respectively | 228,614,860 | — | ||||||
Stockholders’ Equity | ||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued or outstanding | — | — | ||||||
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; 2,138,514 and no shares issued and outstanding (excluding 22,861,486 and no shares subject to possible redemption) as of March 31, 2021 and December 31, 2020, respectively | 214 | — | ||||||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 6,250,000 and 6,468,750 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively | 625 | 647 | ||||||
Additional paid-in capital | 1,312,253 | 24,353 | ||||||
Retained earnings (accumulated deficit) | 3,686,912 | (1,268 | ) | |||||
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Total Stockholders’ Equity | 5,000,004 | 23,732 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 251,482,742 | $ | 394,665 | ||||
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June 30, 2022 | December 31, 2021 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 317,128 | $ | 829,503 | ||||
Prepaid expenses | 155,893 | 41,079 | ||||||
Total Current Assets | 473,021 | 870,582 | ||||||
Forward purchase agreement derivative asset | 132,750 | 51,625 | ||||||
Marketable securities held in Trust Account | 250,170,050 | 250,035,428 | ||||||
TOTAL ASSETS | $ | 250,775,821 | $ | 250,957,635 | ||||
LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT | ||||||||
Current liabilities | ||||||||
Accrued expenses | $ | 886,819 | $ | 739,042 | ||||
Accrued offering costs | 25,000 | 114,958 | ||||||
Income taxes payable | 24,245 | — | ||||||
Due to related party | 37,565 | 4,700 | ||||||
Total Current Liabilities | 973,629 | 858,700 | ||||||
Warrant liabilities | 1,310,000 | 7,315,259 | ||||||
Deferred underwriting fee payable | 8,750,000 | 8,750,000 | ||||||
Total Liabilities | 11,033,629 | 16,923,959 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A common stock subject to possible redemption, $0.0001 par value, 25,000,000 shares at $10.01 per share redemption value as of June 30, 2022 and December 31, 2021 | 250,095,421 | 250,000,000 | ||||||
Stockholders’ Deficit | ||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 0 shares issued or outstanding | — | — | ||||||
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; 0 shares issued or outstanding (excluding 25,000,000 shares subject to possible redemption) as of June 30, 2022 and December 31, 2021 | — | — | ||||||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 6,250,000 shares issued and outstanding as of June 30, 2022 and December 31, 2021 | 625 | 625 | ||||||
Additional paid-in capital | — | — | ||||||
Accumulated deficit | (10,353,854 | ) | (15,966,949 | ) | ||||
Total Stockholders’ Deficit | (10,353,229 | ) | (15,966,324 | ) | ||||
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT | $ | 250,775,821 | $ | 250,957,635 | ||||
FOR THE THREE MONTHS ENDED MARCH 31, 2021
Operation and formation costs | $ | 1,038,176 | ||
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Loss from operations | (1,038,176 | ) | ||
Other income (expense): | ||||
Interest earned on marketable securities held in Trust Account | 16,381 | |||
Change in fair value of warrant liability | 4,709,975 | |||
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Income before income taxes | 3,688,180 | |||
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Net income | $ | 3,688,180 | ||
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Weighted average shares outstanding of Class A redeemable common stock | 25,000,000 | |||
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Basic and diluted income per share, Class A redeemable common stock | $ | 0.00 | ||
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Weighted average shares outstanding of Class A and Class B non-redeemable common stock | 6,055,556 | |||
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Basic and diluted net income per share, Class A and Class B non-redeemable common stock | $ | 0.61 | ||
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For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
General and administrative expenses | $ | 261,307 | $ | 659,101 | $ | 738,244 | $ | 1,697,277 | ||||||||
Loss from operations | (261,307 | ) | (659,101 | ) | (738,244 | ) | (1,697,277 | ) | ||||||||
Other income (expenses): | ||||||||||||||||
Change in fair value of warrant liabilities and forward purchase agreement derivative asset | 2,780,492 | (4,602,892 | ) | 6,086,384 | 107,083 | |||||||||||
Interest earned on marketable securities held in Trust Account | 343,424 | 10,929 | 384,621 | 27,310 | ||||||||||||
Total other income (expense), net | 3,123,916 | (4,591,963 | ) | 6,471,005 | 134,393 | |||||||||||
Income (Loss) before provision for income taxes | 2,862,609 | (5,251,064 | ) | 5,732,761 | (1,562,884 | ) | ||||||||||
Provision for income taxes | (24,245 | ) | — | (24,245 | ) | — | ||||||||||
Net income (loss) | $ | 2,838,364 | $ | (5,251,064 | ) | $ | 5,708,516 | $ | (1,562,884 | ) | ||||||
Weighted average shares outstanding, Class A common stock | 25,000,000 | 25,000,000 | 25,000,000 | 21,132,597 | ||||||||||||
Basic and diluted net income (loss) per share, Class A common stock | $ | 0.09 | $ | (0.17 | ) | $ | 0.18 | $ | (0.06 | ) | ||||||
Weighted average shares outstanding, Class B common stock | 6,250,000 | 6,250,000 | 6,250,000 | 6,153,315 | ||||||||||||
Basic and diluted net income (loss) per share, Class B common stock | $ | 0.09 | $ | (0.17 | ) | $ | 0.18 | $ | (0.06 | ) | ||||||
DEFICIT
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 | — | $ | — | 6,250,000 | $ | 625 | $ | — | $ | (15,966,949 | ) | $ | (15,966,324 | ) | ||||||||||||||
Net income | — | — | — | — | — | 2,870,152 | 2,870,152 | |||||||||||||||||||||
Balance – March 31, 2022 (unaudited) | — | — | 6,250,000 | 625 | — | (13,096,797 | ) | (13,096,172 | ) | |||||||||||||||||||
Accretion for Class A common stock to redemption value | — | — | — | — | — | (95,421 | ) | (95,421 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 2,838,364 | 2,838,364 | |||||||||||||||||||||
Balance – June 30, 2022 (unaudited) | — | $ | — | 6,250,000 | $ | 625 | $ | — | $ | (10,353,854 | ) | $ | (10,353,229 | ) | ||||||||||||||
(UNAUDITED)
Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance — January 1, 2021 | — | $ | — | 6,468,750 | $ | 647 | $ | 24,353 | $ | (1,268 | ) | $ | 23,732 | |||||||||||||||
Sale of 25,000,000 Units, net of underwriting discounts, offering costs, and warrant liabilities | 25,000,000 | 2,500 | — | — | 228,618,052 | — | 228,620,552 | |||||||||||||||||||||
Excess of proceeds from the sale of private placement warrants to Sponsor | — | — | — | — | 1,282,400 | — | 1,282,400 | |||||||||||||||||||||
Forfeiture of Founder Shares | — | — | (218,750 | ) | (22 | ) | 22 | — | — | |||||||||||||||||||
Class A shares subject to possible redemption | (22,861,486 | ) | (2,286 | ) | — | — | (228,612,574 | ) | — | (228,614,860 | ) | |||||||||||||||||
Net income | — | — | — | — | — | 3,688,180 | 3,688,180 | |||||||||||||||||||||
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Balance – March 31, 2021 | 2,138,514 | $ | 214 | 6,250,000 | $ | 625 | $ | 1,312,253 | $ | 3,686,912 | $ | 5,000,004 | ||||||||||||||||
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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 | — | $ | — | 6,468,750 | $ | 647 | $ | 24,353 | $ | (1,268 | ) | $ | 23,732 | |||||||||||||||
Excess of proceeds from the sale of Private Placement Warrants to Sponsor | — | — | — | — | 1,282,400 | — | 1,282,400 | |||||||||||||||||||||
Forfeiture of Founder Shares | — | — | (218,750 | ) | (22 | ) | 22 | — | — | |||||||||||||||||||
Accretion for Class A common stock to redemption value | — | — | — | — | (1,306,775 | ) | (20,072,673 | ) | (21,379,448 | ) | ||||||||||||||||||
Net income | — | — | — | — | — | 3,688,180 | 3,688,180 | |||||||||||||||||||||
Balance – March 31, 2021 (unaudited) | — | — | 6,250,000 | 625 | — | (16,385,761 | ) | (16,385,136 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (5,251,064 | ) | (5,251,064 | ) | |||||||||||||||||||
Balance – June 30, 2021 (unaudited) | — | $ | — | 6,250,000 | $ | 625 | $ | — | $ | (21,636,825 | ) | $ | (21,636,200 | ) | ||||||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2021
Cash Flows from Operating Activities: | ||||
Net income | $ | 3,688,180 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Operating costs paid by Sponsor | 200 | |||
Operating costs paid through promissory note | 70,764 | |||
Change in fair value of warrant liability | (4,709,975 | ) | ||
Transaction costs incurred in connection with warrant liabilities | 442,366 | |||
Interest earned on marketable securities held in Trust Account | (16,381 | ) | ||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (453,689 | ) | ||
Accrued expenses | 410,292 | |||
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Net cash used in operating activities | (568,243 | ) | ||
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Cash Flows from Investing Activities: | ||||
Investment of cash in Trust Account | (250,000,000 | ) | ||
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Net cash used in investing activities | (250,000,000 | ) | ||
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Cash Flows from Financing Activities | ||||
Proceeds from sale of Private Placement Units | 245,000,000 | |||
Proceeds from sale of Private Placements Warrants | 7,000,000 | |||
Proceeds due from Sponsor | (132,376 | ) | ||
Repayment of promissory note—related party | (94,922 | ) | ||
Payment of offering costs | (315,207 | ) | ||
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Net cash provided by financing activities | $ | 251,457,495 | ||
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Net Change in Cash | 889,252 | |||
Cash – Beginning of period | 185 | |||
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Cash – End of period | $ | 889,437 | ||
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Non-Cash investing and financing activities: | ||||
Offering costs included in accrued offering costs | $ | 86,135 | ||
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Offering costs paid through promissory note | $ | 7,449 | ||
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Payment of prepaid expenses through promissory note | $ | 8,483 | ||
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Initial classification of Class A common stock subject to possible redemption | $ | 228,614,860 | ||
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Deferred underwriting fee payable | $ | 8,750,000 | ||
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Forfeiture of Founder Shares | $ | (22 | ) | |
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For the Six Months Ended June 30, 2022 | For the Six Months Ended June 30, 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income (loss) | $ | 5,708,516 | $ | (1,562,884 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Operating costs paid by Sponsor | — | 200 | ||||||
Operating costs paid through promissory note | — | 70,764 | ||||||
Change in fair value of warrant liabilities and forward purchase agreement derivative asset | (6,086,384 | ) | (107,083 | ) | ||||
Transaction costs incurred in connection with warrant liabilities | — | 442,366 | ||||||
Interest earned on marketable securities held in Trust Account | (384,621 | ) | (27,310 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | (114,814 | ) | (315,786 | ) | ||||
Accrued expenses | 147,776 | 849,151 | ||||||
Accrued offering costs | (89,958 | ) | 25,000 | |||||
Income taxes payable | 24,245 | — | ||||||
Due to related party | 32,865 | — | ||||||
Net cash used in operating activities | (762,375 | ) | (625,582 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Cash withdrawn from Trust Account to pay franchise taxes | 250,000 | — | ||||||
Investment of cash in Trust Account | — | (250,000,000 | ) | |||||
Net cash provided by (used in) investing activities | 250,000 | (250,000,000 | ) | |||||
Cash Flows from Financing Activities | ||||||||
Proceeds from sale of Units, net of underwriting discounts paid | — | 245,000,000 | ||||||
Proceeds from sale of Private Placements Warrants | — | 7,000,000 | ||||||
Due from Sponsor | — | (127,089 | ) | |||||
Repayment of promissory note—related party | — | (94,922 | ) | |||||
Payment of offering costs | — | (315,207 | ) | |||||
Net cash provided by financing activities | — | 251,462,782 | ||||||
Net Change in Cash | (512,375 | ) | 837,200 | |||||
Cash – Beginning of period | 829,503 | 185 | ||||||
Cash – End of period | $ | 317,128 | $ | 837,385 | ||||
Non-Cash investing and financing activities: | ||||||||
Offering costs included in accrued offering costs | $ | — | $ | (229,072 | ) | |||
Offering costs paid through promissory note | $ | — | $ | 7,449 | ||||
Payment of prepaid expenses through promissory note | $ | — | $ | 8,483 | ||||
Deferred underwriting fee payable | $ | — | $ | 8,750,000 | ||||
MARCH 31, 2021
Trust Account (as defined below).
3.
4.
HUDSON EXECUTIVE INVESTMENT CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
HUDSON EXECUTIVE INVESTMENT CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENT AS OF JANUARY 28, 2021
The
On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the Securities and Exchange Commission together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”). Upon review of the SEC Statement, the Company’s management further evaluated the Warrants and FPA under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity and concluded that they do not meet the criteria to be classified in stockholders’ equity.
As a result of the above,completed Business Combination, the Company should have classified the Warrants and FPA as liabilities in its previously issued financial statement as of January 28th, 2021. Under this accounting treatment,may require additional capital. If the Company is unable to raise additional capital, it may be required to measuretake additional measures to conserve liquidity, which could include, but not necessarily be limited to, suspending the fair valuepursuit of a Business Combination. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.
The Company’s accounting forcarrying amounts of assets or liabilities should the Warrants and FPA as components of equity instead of as derivative liabilities did not have any effect on the Company’s previously reported investments held in trust or cash.
As Previously Reported | Adjustments | As Restated | ||||||||||
Balance sheet as of January 28, 2021 (audited) | ||||||||||||
Warrant Liability | $ | — | $ | 13,316,350 | $ | 13,316,350 | ||||||
Class A Common Stock Subject to Possible Redemption | 237,785,660 | (13,316,350 | ) | 224,469,310 | ||||||||
Class A Common Stock | 122 | 133 | 255 | |||||||||
Additional Paid-in Capital | 5,000,507 | 457,233 | 5,457,740 | |||||||||
Accumulated Deficit | (1,273 | ) | (457,366 | ) | (458,639 | ) |
HUDSON EXECUTIVE INVESTMENT CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
periods.
Marketable Securities Held in Trust Account
The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320 “Investments—Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheet and adjusted for the amortization or accretion of premiums or discounts.
HUDSON EXECUTIVE INVESTMENT CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
Gross proceeds | $ | 250,000,000 | ||
Less: | ||||
Proceeds allocated to Public Warrants | (7,583,750 | ) | ||
Class A common stock issuance costs | (13,795,698 | ) | ||
Plus: | ||||
Accretion of carrying value to redemption value | 21,379,448 | |||
Class A common stock subject to possible redemption December 31, 2021 | 250,000,000 | |||
Plus: | ||||
Accretion of carrying value to redemption value | 95,421 | |||
Class A common stock subject to possible redemption June 30, 2022 | $ | 250,095,421 | ||
Forward Purchase Agreement Derivative Asset
Income Taxes
subject to
The Company’s generalrate was 0.85% and administrative costs are generally considered start-up costs and are not currently deductible. The change in fair value of the warrant liability is a permanent difference. During0.00% for the three months ended March 31,June 30, 2022 and 2021, respectively, and 0.42% and 0.00% for the Company recorded no income tax expense.six months ended June 30, 2022 and 2021, respectively. The Company’s effective tax rate for three months ended March 31 was approximately 0%, which differs from the expected incomestatutory tax rate of 21% for the three and six months ended June 30, 2022 and 2021, due to changes in fair value in warrant liability and forward purchase agreement derivative asset, and the start-up costs (discussed above) which are not currently deductible.
valuation allowance on the deferred tax assets.
These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
HUDSON EXECUTIVE INVESTMENT CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
The Company’s statement of operations includes a presentation of income (loss) per share for common shares subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net loss per share, basic and diluted, for Class A and Class B non-redeemable common stock is calculated by dividing the net loss, adjusted for income attributable to Class A redeemable common stock, net of applicable franchise and income taxes, by the weighted average number of Class A and Class B non-redeemable common stock outstanding for the period. Class A and Class B non-redeemable common stock includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.
The following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts):
Three Months Ended March 31, | ||||
Redeemable Class A Common Stock | ||||
Numerator: Earnings allocable to Redeemable Class A Common Stock Interest income earned on marketable securities held in Trust Account | $ | 16,381 | ||
Less: Income and Franchise Tax | (16,381 | ) | ||
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Net Earnings | $ | — | ||
Denominator: Weighted Average Redeemable Class A Common Stock Redeemable Class A Common Stock, Basic and Diluted | 25,000,000 | |||
Earnings/Basic and Diluted Redeemable Class A Common Stock | $ | — | ||
Non-Redeemable Class A and B Common Stock | ||||
Numerator: Net Income minus Redeemable Net Earnings | ||||
Net Income | $ | 3,688,180 | ||
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Non-Redeemable Net Income | $ | 3,688,180 | ||
Denominator: Weighted Average Non-Redeemable Class A and B Common Stock | ||||
Non-Redeemable Class A and B Common Stock, Basic and Diluted | 6,055,556 | |||
Income/Basic and Diluted Non-Redeemable Class A and B Common Stock | $ | 0.61 |
aggregate. As of December 31, 2020, basic and diluted shares are the same as there are no non-redeemable securities that are dilutive to the Company’s stockholders. At March 31, 2021,June 30, 2022, the Company did not have any dilutive securities andor other contracts that could, potentially, be exercised or converted into ordinary sharescommon stock and then participateshare in the earnings.earnings of the Company. As a result, diluted net income per common share is the same as basic net income per common share for the periodperiods presented.
For the Three Months Ended June 30, 2022 | For the Three Months Ended June 30, 2021 | For the Six Months Ended June 30, 2022 | For the Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||
Class A | Class B | Class A | Class B | Class A | Class B | Class A | Class B | |||||||||||||||||||||||||
Basic and diluted net income (loss) per common share | ||||||||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||||||||
Allocation of net income (loss), as adjusted | $ | 2,270,691 | $ | 567,673 | $ | (4,200,851 | ) | $ | (1,050,213 | ) | $ | 4,566,813 | $ | 1,141,703 | $ | (1,210,434 | ) | $ | (352,450 | ) | ||||||||||||
Denominator: | ||||||||||||||||||||||||||||||||
Basic and diluted weighted average shares outstanding | 25,000,000 | 6,250,000 | 25,000,000 | 6,250,000 | 25,000,000 | 6,250,000 | 21,132,597 | 6,153,315 | ||||||||||||||||||||||||
Basic and diluted net income (loss) per common share | $ | 0.09 | $ | 0.09 | $ | (0.17 | ) | $ | (0.17 | ) | $ | 0.18 | $ | 0.18 | $ | (0.06 | ) | $ | (0.06 | ) |
nature other than the warrant liabilities and FPA (see Note 9).
In August 2020, the FASB issued Accounting Standard Update (the “ASU”) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. The Company early adopted the ASU on January 1, 2021. Adoption
MARCH 31, 2021
Promissory Note — expenses in the condensed balance sheet
On August 18, 2020, the Company issued an unsecured promissory note (the “Promissory Note”) to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000. The Promissory Note is non-interest bearing and payable on the earlier of August 18, 2021 or the consummation of the Initial Public Offering. As of December 31, 2020, there was $25,650 outstanding which was repaid with the proceeds from the initial public offering. As of March 31, 2021 there were no amounts outstanding.
Due from Sponsor
HUDSON EXECUTIVE INVESTMENT CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
The
AND CONTINGENCIES
HUDSON EXECUTIVE INVESTMENT CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
DEFICIT
subject to redemption with the offset recorded to additional
HUDSON EXECUTIVE INVESTMENT CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
8. WARRANT LIABILITIES9. WARRANTS
HUDSON EXECUTIVE INVESTMENT CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
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 Gain | Fair Value | ||||||||||||||
Assets: | ||||||||||||||||||
March 31, 2021 | U.S. Treasury Securities (Mature on 4/29/2021) | 1 | $ | 250,016,212 | $ | 4,870 | $ | 250,021,082 | ||||||||||
Liabilities: | ||||||||||||||||||
March 31, 2021 | Warrant Liability – Public Warrants | 1 | $ | 4,875,000 | ||||||||||||||
March 31, 2021 | Warrant Liability – Private Placement Warrants | 3 | $ | 3,640,000 | ||||||||||||||
March 31, 2021 | Warrant Liability – FPA | 3 | $ | 75,000 |
HUDSON EXECUTIVE INVESTMENT CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
Held-To-Maturity | Level | Amortized Cost | Gross Holding Loss | Fair Value | ||||||||||||||
Assets: | ||||||||||||||||||
June 30, 2022 | U.S. Treasury Securities (Mature on 9/15/2022) | 1 | $ | 250,166,186 | $ | (37,298 | ) | $ | 250,128,888 | |||||||||
June 30, 2022 | FPA Derivative Asset | 3 | $ | 132,750 | ||||||||||||||
December 31, 2021 | Marketable Securities held in Trust Account –Treasury Trust Money Market Fund | 1 | $ | 250,035,428 | ||||||||||||||
December 31, 2021 | FPA Derivative Asset | 3 | $ | 51,625 | ||||||||||||||
Liabilities: | ||||||||||||||||||
June 30, 2022 | Warrant Liability – Public Warrants | 2 | $ | 750,000 | ||||||||||||||
June 30, 2022 | Warrant Liability – Private Placement Warrants | 2 | $ | 560,000 | ||||||||||||||
December 31, 2021 | Warrant Liability – Public Warrants | 2 | $ | 4,188,125 | ||||||||||||||
December 31, 2021 | Warrant Liability – Private Placement Warrants | 2 | $ | 3,127,134 |
The Warrants are measured at fair value on a recurring basis.
quantitative information regarding Level 3 fair value measurements:
June 30, 2022 | December 31, 2021 | |||||||
Forward Purchase Price (per unit) | $ | 10.00 | $ | 10.00 | ||||
Underlying Asset Price (per share) | $ | 9.81 | $ | 9.78 | ||||
Number of Warrants per unit | 0.25 | 0.25 | ||||||
Concluded Unit Value | 9.84 | 9.95 | ||||||
Time to Maturity (Years) | 0.29 | 0.54 | ||||||
Risk Free Rate | 1.84 | % | 0.21 | % |
Private Placement | Public | Total Warrant Liabilities | ||||||||||
Fair value as of January 1, 2021 | $ | — | $ | — | $ | — | ||||||
Initial measurement on January 28, 2021 | 5,717,000 | 7,583,750 | 13,300,750 | |||||||||
Change in fair value | (2,077,600 | ) | (2,708,750 | ) | (4,786,350 | ) | ||||||
|
|
|
|
|
| |||||||
Fair value as of March 31, 2021 | $ | 3,640,000 | $ | 4,875,000 | $ | 8,515,000 | ||||||
|
|
|
|
|
|
Private Placement | Public | Warrant Liabilities | ||||||||||
Fair value as of January 1, 2021 | $ | — | $ | — | $ | — | ||||||
Initial measurement on January 28, 2021 | 5,717,600 | 7,583,750 | 13,301,350 | |||||||||
Change in fair value | (2,077,600 | ) | (2,708,750 | ) | (4,786,350 | ) | ||||||
Fair value as of March 31, 2021 | 3,640,000 | 4,875,000 | 8,515,000 | |||||||||
Transfer to Level 1 | — | (4,875,000 | ) | (4,875,000 | ) | |||||||
Change in fair value | 2,089,142 | — | 2,089,142 | |||||||||
Fair value as of June 30, 2021 | $ | 5,729,142 | $ | — | $ | 5,729,142 | ||||||
There were 0 changes in levels for the three and six months ended June 30, 2022, and for the three months ended June 30, 2021
FPA Liability | ||||
Fair value as of January 1, 2021 | $ | — | ||
Initial measurement on January 28, 2021 | 16,375 | |||
Change in valuation inputs or other assumptions | 60,000 | |||
|
| |||
Fair value as of March 31, 2021 | $ | 76,375 | ||
|
|
Forward Purchase Agreement (Asset)/Liability | ||||
Fair value as of January 1, 2022 | $ | (51,625 | ) | |
Change in fair value | (72,375 | ) | ||
Fair value as of March 31, 2022 | (124,000 | ) | ||
Change in fair value | (8,750 | ) | ||
Fair value as of June 30, 2022 | $ | (132,750 | ) | |
Forward Purchase Agreement (Asset)/Liability | ||||
Fair value as of January 1, 2021 | $ | — | ||
Initial measurement on January 28, 2021 | 15,000 | |||
Change in fair value | 61,375 | |||
Fair value as of March 31, 2021 | 76,375 | |||
Change in fair value | (48,750 | ) | ||
Fair value as of June 30, 2021 | $ | 27,625 | ||
$1,697,277, offset by change in fair value of warrant liabilities and forward purchase agreement derivative asset of $107,083 and interest earned on marketable securities held in the Trust Account of $27,310.
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if
agreement.
DerivativesLiabilities
the forward purchase unit.
We apply the two-class method in calculating earnings per share.
Other than as disclosed above, management
Under
PART II—OTHER INFORMATION
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) |
* | Filed herewith. |
** | Furnished. |
HUDSON EXECUTIVE INVESTMENT CORP. II | ||||||
Date: | By: | /s/ Douglas G. Bergeron | ||||
Name: | Douglas G. Bergeron | |||||
Title: | Chief Executive Officer (Principal Executive Officer) | |||||
Date: | By: | /s/ | ||||
Name: | ||||||
Title: | Chief Financial Officer (Principal Financial and Accounting Officer) |
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