Business context and reporting period
This is Alpha Healthcare Acquisition Corp.’s unaudited Form 10-Q for the quarter and six months ended June 30, 2021—not an operating-company 10-Q filed by Humacyte, Inc. Alpha was a blank-check company and had no operations or operating revenue. It had agreed to combine with Humacyte; the proposed transaction remained subject to closing conditions. The filing anticipates Alpha would change its name to Humacyte, Inc. upon closing.
Financial results and liquidity
- Revenue and margins: No operating revenue was reported; operating margins are not meaningful for this pre-combination SPAC.
- Three months ended June 30, 2021: Operating costs were $243,668. Net income was $286,223, mainly reflecting a $528,317 gain from the change in fair value of warrant liabilities.
- Six months ended June 30, 2021: Operating costs were $737,486 and net loss was $9.15 million, including an $8.43 million noncash loss from revaluing warrant liabilities. Trust-account interest income was $15,253.
- Cash flow: Operating activities used $616,225 and financing activities used $95,136 in the first half. Cash declined by $711,361 to $383,400.
- Assets and liquidity: Total assets were $100.51 million, including $100.03 million in the restricted trust account. Only $383,400 was outside the trust and available for working capital. Management said this cash was expected to fund operations for at least 12 months from issuance of the financial statements, assuming no business combination during that period.
- Liabilities and capital: Total liabilities were $16.81 million, including $14.47 million of warrant liabilities and $2.12 million of deferred underwriting discount. The filing reports no long-term debt. Shares subject to possible redemption were presented separately as $78.70 million of temporary equity.
Changes and notable items
The filing provides no comparable 2020 income-statement or cash-flow period, so year-over-year operating comparisons are unavailable. Compared with December 31, 2020, cash fell from $1.09 million to $383,400; warrant liabilities rose from $6.04 million to $14.47 million, primarily reflecting fair-value changes; and redeemable Class A shares declined from 8.80 million to 7.87 million.
On May 14, 2021, Alpha restated its December 31, 2020 financial statements after revising its accounting for warrants. Management reported that the restatement involved noncash adjustments and did not change previously reported cash or total assets. The filing says disclosure controls were ineffective because of a material weakness in evaluating complex accounting issues. Management described planned remediation, including increased communication with personnel and external professionals, but offered no assurance the actions would be effective.
Transaction, outlook, and risks
- Under the February 17, 2021 business combination agreement, Humacyte would become a wholly owned subsidiary of Alpha if the transaction closes. Certain Humacyte holders could receive up to 15 million additional shares based on post-closing share-price performance.
- PIPE investors had agreed, subject to closing conditions, to purchase 17.5 million shares for $10 per share, or $175 million in aggregate. These proceeds were contingent on consummation of the combination.
- Alpha’s trust funds were restricted for a business combination or redemptions. If it failed to complete a combination within 24 months of its September 2020 IPO, it was generally required to redeem public shares and liquidate. Additional sponsor or related-party funding was not committed; insufficient working capital could lead to reduced operations or suspension of the business-combination search.
- Risks included uncertainty from COVID-19, potential dilution from transaction-related share issuance, and the possibility that financing or the business combination would not be completed. The filing reports no market or interest-rate risk considered material and no off-balance-sheet arrangements.
Investor facts to verify
- Confirm the identity and reporting entity: this filing is Alpha Healthcare Acquisition Corp.’s SPAC report, not Humacyte’s operating-company results.
- Check whether and on what terms the proposed combination and the $175 million PIPE ultimately closed, including redemptions and resulting dilution.
- Review later filings for remediation of the material weakness and restoration of effective disclosure controls.
- Verify the warrant valuation, deferred underwriting fees, and liquidity available outside the trust account.
- Do not treat the stated 12-month cash runway as operating guidance for Humacyte; it referred to Alpha’s pre-combination SPAC expenses.