Filing scope and business context
This is HealthCor Catalio Acquisition Corp.’s unaudited Form 10-Q for the quarter ended June 30, 2021—not a standalone Hyperfine, Inc. operating report. HealthCor was a blank-check company searching for a business combination and had not begun operations or generated operating revenue. Its focus was healthcare.
After the reporting period, on July 7, 2021, HealthCor agreed to combine with Hyperfine and Liminal Sciences. The transaction was subject to closing conditions; the filing does not report Hyperfine’s standalone financial results.
Financial results and position
| Metric | Reported amount |
|---|---|
| Revenue | None; the company had not commenced operations. |
| Net loss, three months ended June 30, 2021 | $1.434 million, versus $1.583 million for the comparable 2020 quarter. |
| Quarterly operating costs | $1.441 million, including $1.310 million in legal expenses; offset by $7,399 of trust-account interest income. |
| Six-month net loss | $1.583 million; operating costs were $1.594 million and trust-account interest was $11,833. A clear comparable six-month 2020 value is not provided in the presented statements. |
| Cash flow, six months | $735,695 used in operating activities; $207.0 million used to fund the trust account; $208.484 million provided by financing activities. Cash increased by $747,912. |
| Cash and liquidity at June 30, 2021 | $747,912 outside the trust account; $207.012 million in trust-account assets. Working capital deficit was approximately $118,000. |
| Assets and liabilities | Total assets of $208.251 million; total liabilities of $8.603 million, including a $7.245 million deferred underwriting fee payable if a business combination closes. |
| Debt and equity | No long-term debt reported. A related-party promissory note was repaid in February 2021. Class A shares subject to possible redemption were presented as temporary equity ($194.648 million). |
Margins are not meaningful because the company had no revenue. The filing reports no material market or interest-rate exposure, citing the short maturities of trust investments.
Material changes, outlook, and risks
- The company completed its January 2021 IPO, raising $207.0 million, and sold $6.14 million of private-placement shares. It placed $207.0 million in the trust account.
- The July 2021 proposed combination contemplated a $126.1 million PIPE financing, subject to the transaction closing, and potential additional shares for target-company holders if specified share-price conditions were met.
- Management expected available working capital and sponsor borrowing capacity to cover needs through the earlier of a business combination or one year from the filing. On August 18, 2021, the sponsor agreed to provide up to $300,000 in non-interest-bearing, unsecured loans if requested.
- HealthCor had until January 29, 2023 to complete a business combination; otherwise, public shares generally would be redeemed from the trust account, subject to the filing’s terms. Trust funds were largely unavailable for ordinary expenses before a transaction or liquidation.
- Risks included competition among SPACs for targets, potentially higher or less available directors’ and officers’ insurance, and possible adverse COVID-19 effects on the search process. Management said the pandemic’s specific effect was not readily determinable.
- Approximately $855,000 of accrued legal expenses were contingent on and expected to be paid through a business combination, along with other contingent deal costs. Deferred underwriting fees were also payable only if a combination closed.
- Management reported effective disclosure controls as of June 30, 2021 and no material changes in internal control during the quarter.
Important facts for investors to verify
- Confirm that this SPAC filing is not being mistaken for Hyperfine’s standalone quarterly financial statements.
- Review the definitive merger documents for transaction conditions, redemption rights, dilution, voting arrangements, and the terms and closing status of the PIPE financing.
- Verify available cash outside the trust, contingent transaction costs, sponsor-loan availability, and the deferred underwriting fee payable upon a successful combination.
- Assess whether the proposed transaction closed and compare subsequent filings with the deal terms and forward-looking statements described here.