Filing Summary
Business Context and Reporting Period
This Form 8-K was filed by Haymaker Acquisition Corp. III, a special purpose acquisition company, on May 17, 2021, reporting an event dated May 14, 2021. Although the request identifies Biote Corp., the filing registrant is Haymaker Acquisition Corp. III; the filing text does not identify Biote Corp. as the registrant.
The filing addresses the accounting treatment of the company’s public and private placement warrants following the SEC staff’s April 12, 2021 statement regarding SPAC warrant accounting.
Key Financial and Capital Structure Matters
- On March 4, 2021, the company completed an initial public offering of 30,000,000 units. Each unit included one Class A common share and one-quarter of a redeemable warrant.
- The company also sold 5,333,333 private placement warrants at $1.50 per warrant. Following a partial underwriters’ over-allotment exercise, an additional 1,750,000 units and 233,333 private placement warrants were sold on March 5, 2021.
- The warrants had initially been classified as equity. Management, the audit committee, and the independent auditor concluded that the issued warrants should instead be classified as liabilities at fair value, with subsequent fair-value changes recognized in earnings each reporting period.
- The filing does not provide revised warrant fair values, total assets, liabilities, net income, revenue, cash flow, margins, debt balances, or liquidity ratios.
- The company stated that the accounting changes are not expected to affect its cash position or cash held in the trust account.
Material Changes Versus the Previously Reported Position
- The audited balance sheet as of March 4, 2021, previously filed as Exhibit 99.1 to the March 11, 2021 Form 8-K, should no longer be relied upon because of the required warrant reclassification.
- The audit report of Marcum LLP included in that prior Form 8-K should also no longer be relied upon.
- The company planned to reflect the reclassification in its upcoming Form 10-Q for the quarter ended March 31, 2021.
Outlook, Risks, and Unusual Items
The principal unusual item is the correction of warrant accounting under the SEC staff’s SPAC warrant guidance. Classifying the warrants as liabilities may create future non-cash earnings volatility because changes in their fair value will be recorded each reporting period. The filing states that cash and trust-account balances are not expected to be affected.
Investor Verification Points
- Verify the revised warrant liability balances and fair-value methodology in the subsequent Form 10-Q.
- Review the effect of the reclassification on accumulated deficit, net income or loss, and financial-statement comparatives.
- Confirm whether the subsequent filing contains any updated auditor disclosures or revised audit conclusions.
- Confirm the registrant’s relationship to Biote Corp., since this filing is by Haymaker Acquisition Corp. III and does not itself identify Biote Corp.