Filing summary
Registrant mismatch: The supplied filing is Amplitude Healthcare Acquisition Corporation’s Form 10-Q for the quarter ended June 30, 2020—not a filing by Jasper Therapeutics, Inc. It describes a healthcare-focused blank-check company (SPAC), not an operating therapeutics business.
Business context and reporting period
The company was formed to identify and complete a business combination and had not commenced operations or generated operating revenue through June 30, 2020. It reported its second quarter and six-month results; the statements are unaudited. Its stated deadline to complete a business combination was November 22, 2021.
Financial results and liquidity
| Metric | Three months ended June 30, 2020 | Six months ended June 30, 2020 |
|---|---|---|
| Operating revenue | None | None |
| General and administrative expenses | $327,561 | $556,227 |
| Interest income on trust investments | $44,307 | $369,655 |
| Net loss | $282,059 | $243,200 |
| Operating cash flow | Not presented for the quarter | $(406,720) |
Profit margins are not meaningful because the company had no operating revenue. At June 30, cash outside the trust was $914,249; trust-account investments were $100,416,013. Current assets were $1,181,331 and current liabilities were $258,273. Total liabilities were $3,758,273, including a $3.5 million deferred underwriting fee payable only if a business combination is completed. The filing reports no long-term debt.
Six-month net cash change was $(298,506), leaving $914,249 of cash outside the trust. The company withdrew approximately $108,000 from trust-account interest to pay franchise taxes. Trust assets were invested in U.S. Treasury money-market securities.
Changes versus prior periods
Compared with December 31, 2019, outside-trust cash decreased from $1,212,755 to $914,249, while trust investments increased from $100,154,572 to $100,416,013. Current liabilities rose from $111,364 to $258,273. Shares classified as subject to possible redemption declined from 9,308,227 to 9,283,907. The filing does not provide 2019 quarterly income-statement or cash-flow figures, so a year-over-year operating comparison is not available.
Outlook, risks, and unusual items
- Management expected to continue incurring costs while pursuing a transaction and said it could not assure that a business combination would be completed. No specific earnings or transaction guidance was provided.
- The company said it did not expect to need additional funds for current expenditures, but warned that actual search and transaction costs or redemption demands could require financing. Sponsor or related-party loans were possible but not committed; none were outstanding at quarter-end.
- COVID-19 could adversely affect the target search, transaction process, or a future target’s business; the specific financial effect was not determinable.
- Newly disclosed risks included negative interest rates reducing trust value and potential redemption proceeds below $10 per share. If no combination is completed by November 22, 2021, the company must wind up and redeem public shares; warrants could expire worthless.
- The company reported $7,050 of due-diligence consulting fees paid to a director’s relative and monthly office payments of $3,697 to an entity 45% owned by the CEO. The office arrangement had no written agreement.
- Management concluded disclosure controls were effective and reported no material change in internal control over financial reporting during the quarter. No legal proceedings were reported.
Important facts for investors to verify
- Confirm the issuer: this filing is for Amplitude Healthcare Acquisition Corporation, not Jasper Therapeutics.
- Review any later filings for the target, transaction terms, closing status, redemptions, and resulting ownership and dilution.
- Assess the limited $914,249 of operating cash outside the trust against ongoing search and transaction costs, and note the trust funds are restricted for the business combination or permitted redemptions.
- Verify the deferred underwriting fee, related-party arrangements, and the potential dilution and warrant terms associated with a business combination.