References to the "Company," "Helix Acquisition Corp.," "our," "us" or "we"
refer to Helix Acquisition Corp. The following discussion and analysis of the
Company's financial condition and results of operations should be read in
conjunction with the financial statements and the notes thereto contained
elsewhere in this Amendment No. 1. Certain information contained in the
discussion and analysis set forth below includes forward-looking statements that
involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), 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 Annual Report on Form 10-K. Factors that might cause or
contribute to such a discrepancy include, but are not limited to, those
described in our other Securities and Exchange Commission ("SEC") filings.
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Overview
The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in "Item 8.
Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of many
factors, including those set forth under "Special Note Regarding Forward-Looking
Statements," "Item 1A. Risk Factors" and elsewhere in this Annual Report on Form
10-K.
We are a blank check company incorporated in the Cayman Islands on August 13,
2020 formed for the purpose of effecting a merger, amalgamation, share exchange,
asset acquisition, share purchase, reorganization or other similar business
combination with one or more businesses. We intend to effectuate our business
combination using cash derived from the proceeds of the Public Offering and the
sale of the Private Placement Shares, our shares, debt or a combination of cash,
shares and debt.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a business
combination will be successful.
Our sponsor is an affiliate of Cormorant Asset Management, LP ("Cormorant"), a
leading life sciences focused investment firm with over $2 billion in assets
under management as of June 30, 2020. Our registration statement for the initial
public offering (the "Initial Public Offering") was declared effective on
October 19, 2020. On October 22, 2020, we consummated the Initial Public
Offering of 115,000,000 Public Shares at $10.00 per Public Share, which included
the full exercise by the underwriters of their over-allotment option in the
amount of 1,500,000 Public Shares, at $10.00 per Public Share, generating gross
proceeds of $115,000,000. We incurred total offering costs of approximately
$6,325,000 in underwriting fees (inclusive of $4,025,000 million in deferred
underwriting fees).
Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement of 430,000 Private Placement Shares to our Sponsor at a
price of $10.00 per share, generating gross proceeds to the Company of
$4,300,000.
Upon the closing of the Initial Public Offering and the Private Placement,
$115.0 million ($10.00 per Share) of the net proceeds of the Initial Public
Offering and certain of the proceeds of the Private Placement was placed in the
Trust Account located in the United States with Continental Stock Transfer &
Trust Company acting as trustee, and is invested only in U.S. government
securities, within the meaning set forth in 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 which invest only in direct U.S. government treasury obligations,
until the earlier of: (i) the completion of a business combination or (ii) the
distribution of the Trust Account as described below.
Our 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.
If the Company is unable to complete a business combination within 24 months
from the closing of the Initial Public Offering, or October 22, 2022 (the
"Combination Period"), we 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 us (less taxes payable and 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 Shareholders' rights
as shareholders (including the right to receive further liquidation
distributions, if any) and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of our remaining shareholders and our
board of directors, liquidate and dissolve, subject, in the case of clauses
(ii) and (iii), to our obligations under Cayman Islands law to provide for
claims of creditors and in all cases subject to the other requirements of
applicable law.
Restatement and Revision of Previously Issued Financial Statements
In this Amendment No. 1, we are restating (i) our audited balance sheet as of
October 22, 2020, (ii) our audited financial statements in the 2020 Form 10-K,
(iii) and the period from August 13, 2020 (inception) through December 31, 2020
in the 2020 Form 10-K.
We have re-evaluated our application of ASC 480-10-S99-3A to our accounting and
classification of the Public Shares, issued as part of the units sold in the
Initial Public Offering on October 22, 2020. Historically, a portion of the
Public Shares was classified as permanent equity to maintain shareholders'
equity greater than $5 million on the basis that we will not redeem our Public
Shares in an amount that would cause our net tangible assets to be less than
$5,000,001, as described in our amended and restated memorandum and articles of
association. Pursuant to such re-evaluation, our management has determined that
the Public Shares include certain provisions that require classification of all
of the Public Shares as temporary equity regardless of the net tangible assets
redemption limitation contained in the Articles. In addition, in connection with
the change in presentation for the Public Shares, management determined it
should restate earnings per share calculation to allocate income and losses
shared pro rata between the two classes of shares. This presentation
contemplates a Business Combination as the most likely outcome, in which case,
both classes of shares share pro rata in the income and losses of our Company.
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Therefore, on November 30, 2021, the Company's management and the audit
committee of the Company's board of directors concluded that the Company's
previously issued (i) audited balance sheet as of October 22, 2020 (the "Post
IPO Balance Sheet"), (ii) audited financial statements included in the 2020 Form
10-K, (iii) unaudited interim financial statements included in the Company's
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021,
filed with the SEC on May 21, 2021; (iv) unaudited interim financial statements
included in the Company's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2021, filed with the SEC on August 16, 2021 and (v) unaudited
interim financial statements included in the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2021, filed with the SEC on
November 12, 2021 (collectively, the "Affected Periods"), should be restated to
report all Public Shares as temporary equity and should no longer be relied
upon. As such, the Company restates its financial statements for the Affected
Periods in this Amendment No. 1 for the Post IPO Balance Sheet and the Company's
audited financial statements included in the 2020 Form 10-K, and in an amendment
to Company's Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2021 for the unaudited condensed financial statements for the
periods ended March 31, 2021, June 30, 2021 and September 30, 2021 (the "Q3 Form
10-Q/A"). These restatements result in a change in the initial carrying value of
the Class A ordinary shares subject to possible redemption with the offset
recorded to additional paid-in capital (to the extent available), accumulated
deficit and Class A ordinary shares. Further, there is no impact to the reported
amounts for total assets, total liabilities, cash flows, or net income (loss)
but earnings per share was impacted due to a change in presentation relating to
the restatements.
The restatement does not have an impact on our cash position and cash held in
the Trust Account.
Our management has concluded that in light of the classification error described
above, a material weakness exists in our internal control over financial
reporting and that our disclosure controls and procedures were not effective.
In connection with the restatement, our management reassessed the effectiveness
of our disclosure controls and procedures for the periods affected by the
restatement. As a result of that reassessment, we determined that our disclosure
controls and procedures for such periods were not effective with respect to our
internal controls around the proper accounting and classification of complex
financial instruments. For more information, see Item 9A included in this
Amendment No. 1.
We have not amended our previously filed Quarterly Report on Form 10-Q for the
period affected by the restatement or our previously filed balance sheet, dated
October 22, 2020, on Form 8-K. The financial information that has been
previously filed or otherwise reported for these periods is superseded by the
information in this Amendment No. 1, and the financial statements and related
financial information contained in such previously filed reports should no
longer be relied upon.
The restatement is more fully described in Note 2 to the notes to the financial
statements included herein.
32
RESULTS OF OPERATIONS
Results of Operations
We have neither engaged in any operations (other than searching for a business
combination after our Initial Public Offering) nor generated any operating
revenues to date. Our only activities from inception through December 31, 2020
were organizational activities, those necessary to prepare for the Initial
Public Offering, described below, and, subsequent to the Initial Public
Offering, identifying a target company for a business combination. We do not
expect to generate any operating revenues until after the completion of our
initial business combination. We expect to generate non-operating income in the
form of interest income on marketable securities held after the Initial Public
Offering. We expect that we will incur increased expenses as a result of being a
public company (for legal, financial reporting, accounting and auditing
compliance), as well as for due diligence expenses in connection with searching
for, and completing, a business combination.
For the period from August 13, 2020 (inception) through December 31, 2020, we
had a net loss of $90,838, which consisted of formation and operating costs of
$105,755, offset by interest earned on investments held in Trust Account of
$14,917.
Liquidity and Capital Resources
Until the consummation of the Initial Public Offering, our only source of
liquidity was an initial purchase of ordinary shares by the Sponsor and loans
from our Sponsor.
On October 22, 2020, we consummated the Initial Public Offering of 11,500,000
Public Shares, which included the full exercise by the underwriters of their
over-allotment option in the amount of 1,500,000 Public Shares, at a price of
$10.00 per Share, generating gross proceeds of $115,000,000. Simultaneously with
the closing of the Initial Public Offering, we consummated the sale of 430,000
Private Placement Shares to the Sponsor at a price of $10.00 per Private
Placement Share generating gross proceeds of $4,300,000.
Following the Initial Public Offering, the full exercise of their over-allotment
option and the sale of the Private Placement Shares, a total of $115,000,000 was
placed in the Trust Account. We incurred $6,750,447 in transaction costs,
including $2,300,000 of underwriting fees, $4,025,000 of deferred underwriting
fees and $425,447 of other offering costs.
We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account, which
interest shall be net of taxes payable and excluding deferred underwriting
commissions, to complete our business combination. We may withdraw interest from
the Trust Account to pay taxes, if any. To the extent that our share capital or
debt is used, in whole or in part, as consideration to complete a business
combination, the remaining proceeds held in the Trust Account will be used as
working capital to finance the operations of the target business or businesses,
make other acquisitions and pursue our growth strategies.
At December 31, 2020, we held $1,335,924 of cash outside of the Trust Account.
We intend to use the funds held outside the Trust Account primarily to identify
and evaluate target businesses, perform business due diligence on prospective
target businesses, travel to and from the offices, plants or similar locations
of prospective target businesses or their representatives or owners, review
corporate documents and material agreements of prospective target businesses,
structure, negotiate and complete a business combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with a business combination, 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. If we complete a business combination, we may
repay such loaned amounts out of the proceeds of the Trust Account released to
us. In the event that a business combination does not close, we may use a
portion of the working capital held outside the Trust Account to repay such
loaned amounts, but no proceeds from our Trust Account would be used for such
repayment. Upon completion of a business combination, up to $1,500,000 of such
loans may be convertible into shares, at a price of $10.00 per share, at the
option of the lender. The shares would be identical to the Private Placement
Shares.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business, undertaking in-depth due diligence
and negotiating a business combination are less than the actual amount necessary
to do so, we may have insufficient funds available to operate our business prior
to our initial business combination. Moreover, we may need to obtain additional
financing either to complete our business combination or because we become
obligated to redeem a significant number of our public shares upon completion of
our business combination, in which case we may issue additional securities or
incur debt in connection with such business combination.
33
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of December 31, 2020. We do not participate in
transactions that create relationships with unconsolidated entities or financial
partnerships, often referred to as variable interest entities, which would have
been established for the purpose of facilitating off-balance sheet arrangements.
We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of
other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities other than an agreement to pay the Sponsor
a monthly fee of $10,000 for office space, administrative services and remote
support services provided to the Company. We began incurring these fees on
October 22, 2020 and will continue to incur these fees monthly until the earlier
of the completion of a business combination and the Company's liquidation.
The underwriters are entitled to a deferred fee of $0.35 per Share, or
$4,025,000 in the aggregate. The deferred fee will become payable to the
underwriters from the amounts held in the Trust Account solely in the event that
we complete a business combination, subject to the terms of the underwriting
agreement.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have not identified any critical accounting policies.
Class A Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible redemption in accordance
with the guidance in Accounting Standards Codification ("ASC") Topic 480
"Distinguishing Liabilities from Equity." Class A Ordinary shares subject to
mandatory redemption is classified as a liability instrument and is measured at
fair value. Conditionally redeemable ordinary shares (including ordinary shares
that features redemption rights that is either within the control of the holder
or subject to redemption upon the occurrence of uncertain events not solely
within our control) is classified as temporary equity. At all other times,
ordinary shares are classified as shareholders' equity. Our Class A ordinary
shares feature certain redemption rights that are considered to be outside of
our control and subject to occurrence of uncertain future events. Accordingly,
Class A ordinary shares subject to possible redemption is presented as temporary
equity, outside of the shareholders' equity section of our balance sheet.
Net Income (Loss) per Ordinary Share
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 ordinary shares and Class B ordinary shares. Income and losses are
shared pro rata between the two classes of shares. Net income (loss) per common
share is calculated by dividing the net income (loss) by the weighted average
shares of common stock outstanding for the respective period.
Recent Accounting Standards
Management does not believe that any other recently issued, but not yet
effective, accounting standards, if currently adopted, would have a material
effect on our financial statements.
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