COME HEAL References to the "Company," "our," "us" or "we" refer to
Overview
We are a blank check company incorporated in
The registration statement for our Initial Public Offering became effective on
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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,
If we are unable to complete a Business Combination within 24 months from the
closing of the Initial Public Offering, or
The issuance of additional shares of our stock in a business combination:
? may significantly dilute the equity interest of investors in this 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;
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? 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. Results of Operations
Our entire activity since inception through
For the year ended
Liquidity and Going Concern
As indicated in the accompanying 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)
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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 Update ("ASU") 2014-15, "Disclosures of
Uncertainties about an Entity's Ability to Continue as a 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
Related Party Transactions Founder Shares
On
The initial stockholders agreed, subject to limited exceptions, not to transfer,
assign or sell any of the Founder Shares until the earlier to occur of: (A) one
year after the completion of the initial Business Combination and (B) subsequent
to the initial Business Combination, (x) if the last reported sale price of the
Class A common stock equals or exceeds
Related Party Loans
On
In addition, in order to 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 ("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)
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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 the Sponsor a total of
Our sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our initial stockholders, officers, directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Critical Accounting Policies
This management's discussion and analysis of our financial condition and results
of operations is based on our 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 its 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 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
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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 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
The Company recognizes 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.
Net Income (Loss) 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 (loss) 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
In
Our management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
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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 the Company 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
We granted the underwriters a 45-day option from the date of Initial Public
Offering to purchase up to 11,250,000 additional Units to cover over-allotments,
if any, at the Initial Public Offering price less the underwriting discounts and
commissions. The underwriter exercised its over-allotment option in full on
The underwriters were 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
Off-Balance Sheet Arrangements
As of
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 CEO's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of this offering or until we are no longer an "emerging growth company," whichever is earlier.
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