References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to Helix Acquisition Corp. References to our "management" or our
"management team" refer to our officers and directors, and references to the
"Sponsor" refer to Helix Holdings, LLC. 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 Quarterly Report. Certain information contained in the
discussion and analysis set forth below includes forward-looking statements that
involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act that
are not historical facts and involve risks and uncertainties that could cause
actual results to differ materially from those expected and projected. All
statements, other than statements of historical fact included in this Form 10-Q
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"anticipate," "believe," "continue," "could," "estimate," "expect," "intends,"
"may," "might," "plan," "possible," "potential," "predict," "project," "should,"
"would" and variations thereof and similar words and expressions are intended to
identify such forward-looking statements. Such forward-looking statements relate
to future events or future performance, but reflect management's current
beliefs, based on information currently available. A number of factors could
cause actual events, performance or results to differ materially from the
events, performance and results discussed in the forward-looking statements. For
information identifying important factors that could cause actual results to
differ materially from those anticipated in the forward-looking statements,
please refer to the Risk Factors section of the Company's final prospectus for
its Initial Public Offering filed with the U.S. Securities and Exchange
Commission (the "SEC"). The Company's securities filings can be accessed on the
EDGAR section of the SEC'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.
This Management's Discussion and Analysis of Financial Condition has been
restated to give effect to the restatement of our financial statements as of
March 31, 2021 and June 30, 2021. Management re-evaluated the Company's
application of ASC 480-10-99 to its accounting classification of public shares.
In connection with the preparation of the Company's financial statements as of
September 30, 2021, management identified errors made in its historical
financial statements where, at the closing of the Company's Initial Public
Offering, the Company improperly classified a portion of its Class A ordinary
shares subject to possible redemption. The Company previously determined the
Class A ordinary shares subject to possible redemption cannot result in net
tangible assets being less than $5,000,001. Management determined that the Class
A ordinary shares issued during the Initial Public Offering can be redeemed or
become redeemable subject to the occurrence of future events considered outside
of the Company's control. Therefore, management concluded that the redemption
value should include all Class A ordinary shares subject to possible redemption
regardless if the result is less than $5,000,001 in net tangible assets. In
accordance with SEC Staff Accounting Bulletin No. 99, "Materiality" and SEC
Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements", management has concluded the classification error related to
temporary equity and permanent equity was material to the historical financial
statements. Therefore, the Company, in consultation with its Audit Committee,
concluded that its previously issued financial statements impacted should be
restated. This resulted in a restatement to temporary equity with the offset
recorded to additional paid-in capital (to the extent available), accumulated
deficit and Class A ordinary shares.
Overview
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 (a "Business Combination") with one or more businesses. We
intend to effectuate our Business Combination using cash derived from the
proceeds of the Initial Public Offering and the sale of the Private Placement
Warrants, 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.
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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 September 30, 2021. Our registration statement for the
initial public offering (the "Initial Public Offering") was declared effective
on October 19, 2020.
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.
Proposed Business Combination
On October 4, 2021, the Company announced that it entered into a Business
Combination Agreement (the "Business Combination Agreement"), by and among
Helix, MoonLake Immunotherapeutics AG, a Swiss stock corporation
(Aktiengesellschaft) registered with the commercial register of the Canton of
Zug, Switzerland under the number CHE-433.093.536 ("MoonLake"), the existing
equity holders of MoonLake (collectively, the "ML Parties"), Helix Holdings LLC,
a Cayman Islands limited liability company and the sponsor of Helix (the
"Sponsor"), and the representative of the ML Parties. Following completion (the
"Closing" and the date of Closing, the "Closing Date") of the business
combination contemplated by the Business Combination, (i) the existing equity
holders of MoonLake will retain their equity interests in MoonLake (except as
noted in the Company's Form 8-K filed on October 4, 2021) and will receive a
number of non-economic voting shares in Helix determined by multiplying the
number of MoonLake Common Shares held by them immediately prior to the Closing
by the Exchange Ratio; (ii) ) certain equity holders of MoonLake (the "BVF
Shareholders") will assign all of their MoonLake common shares to Helix and
Helix will issue to the BVF Shareholders an aggregate number of Helix class A
ordinary shares equal to the product of such number of assigned MoonLake common
shares and the Exchange Ratio; and (iii) Helix will receive a controlling equity
interest in MoonLake in exchange for making the Cash Contribution. The Exchange
Ratio is the quotient obtained by dividing (a) 360,000,000 by (b) the fully
diluted shares of Moonlake prior to the Closing by (c) 10. Substantially all of
the assets and business of MoonLake and Helix will be held by MoonLake as the
operating company following the Closing.
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 September 30, 2021
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 three months ended September 30, 2021, we had a net loss of $2,092,025,
which consisted of general and administrative expenses of $2,093,506 offset by
interest earned on marketable securities held in Trust Account of $1,481.
For the nine months ended September 30, 2021, we had a net loss of $2,320,649,
which consisted of general and administrative expenses of $2,346,085 offset by
interest earned on marketable securities held in Trust Account of $25,436.
For the period from August 13, 2020 (inception) through September 30, 2020, we
had a net loss of $5,000, which consisted of formation and operating costs.
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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, and we had $1,646,100 of cash held outside of the
Trust Account, after payment of costs related to the Initial Public Offering,
and available for working capital purposes. 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.
For the nine months ending September 30, 2021, cash used in operating activities
was $249,109. Net loss of $2,320,649 was affected by interest earned on
marketable securities held in the Trust Account of $25,436 and changes in
operating assets and liabilities, which used $2,096,976 of cash for general and
administrative expenses.
For the period from August 13, 2020 (inception) through September 30, 2020, cash
used in operating activities was $0. Net loss of $5,000 was affected by the
payment of formation costs through issuance of Class B ordinary shares.
As of September 30, 2021, we had cash and marketable securities held in the
Trust Account of $115,040,353. 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. Through September
30, 2021, we withdrew $14,917 of interest earned on the Trust Account to pay our
taxes. 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 September 30, 2021, we held $1,028,752 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. 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. As of September 30, 2021 there were
no amounts outstanding under any working capital loans.
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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.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of September 30, 2021. 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, utilities, 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 condensed 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 condensed 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 are classified as a liability instrument and are 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
sheets.
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Net Income (Loss) per Ordinary Share
We calculate earnings per share to allocate net income (loss) evenly to Class A
and Class B ordinary shares. This presentation contemplates a Business
Combination as the most likely outcome, in which case, both classes of common
stock share pro rata in the income (loss) of the Company.
Recent Accounting Standards
In August 2020, the FASB issued 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" ("ASU 2020-06"), which simplifies
accounting for convertible instruments by removing major separation models
required under current GAAP. ASU 2020-06 removes certain settlement conditions
that are required for equity contracts to qualify for the derivative scope
exception and it also simplifies the diluted earnings per share calculation in
certain areas. ASU 2020-06 is effective for fiscal years beginning after
December 15, 2023, including interim periods within those fiscal years, with
early adoption permitted. The Company is currently assessing the impact, if any,
that ASU 2020-06 would have on its financial position, results of operations or
cash flows.
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 condensed financial statements.
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