Business context and reporting period
Important identity mismatch: The metadata names Biote Corp., but the supplied filing is Haymaker Acquisition Corp. III’s unaudited Form 10-Q for the quarter ended March 31, 2021. Haymaker was a shell company formed to pursue a business combination; it had not begun operating or identified a completed transaction in this filing.
Haymaker completed its IPO in March 2021, selling 31.75 million units for $317.5 million gross, and placed $317.5 million in its trust account. It had until March 4, 2023 to complete a business combination or redeem public shares and liquidate.
Financial results and position
- Revenue and margins: No operating revenue; Haymaker said it would not expect operating revenue before completing a business combination. Operating margins are not meaningful for this pre-combination shell.
- Results: Net loss was $3.94 million for the quarter. Reported items included $58,560 of operating and formation costs, $49,315 of franchise tax expense, $962,447 of warrant-related offering costs, and a $3.51 million loss on the sale of private placement warrants; these were partly offset by a $619,543 gain from changes in warrant fair value and $14,405 of unrealized investment gains. Loss per share was $0.32 for non-redeemable Class A and Class B shares; redeemable Class A shares had reported earnings per share of $0.00.
- Cash flow: Operating activities used $626,996; investing activities used $317.5 million, primarily for the trust deposit; financing activities provided $319.05 million. Cash outside the trust was $922,484 at quarter-end.
- Liquidity and obligations: Working capital was $1.49 million, excluding $49,315 of franchise tax payable. The $164,000 sponsor note was repaid during the quarter, and no working-capital loans were outstanding. Liabilities included $27.99 million of warrant liabilities and $11.11 million of deferred underwriting fees, payable only if a business combination is completed. Management said available working capital and borrowing capacity should meet needs through a business combination or one year from the filing.
- Trust and equity: Trust investments were $317.51 million. Class A shares subject to possible redemption were recorded as $274.86 million of temporary equity; stockholders’ equity was $5.00 million.
Changes, outlook, and risks
The company was newly public, so the quarter’s operating results do not have a meaningful prior-year comparable period in the supplied filing. Compared with December 31, 2020, the quarter-end balance sheet reflects the IPO, trust funding, and warrant accounting; cash increased from $1,594 to $922,484, while trust investments rose from zero to $317.51 million.
After the SEC’s April 12, 2021 staff statement on SPAC warrants, Haymaker restated its March 4, 2021 balance sheet: warrants previously treated as equity were reclassified as derivative liabilities, and related offering costs were expensed. Warrant fair-value changes flow through earnings and may cause material quarterly fluctuations. Management identified a material weakness in internal control over financial reporting relating to complex financial instruments and concluded disclosure controls were ineffective as of March 31. It described planned process enhancements but gave no assurance they would resolve the weakness.
Completion of a business combination was uncertain. The filing cited COVID-19-related disruption, potential financing constraints, creditor claims against trust assets, and the possibility that warrants’ liability treatment could complicate a transaction. The sponsor’s trust indemnity has exceptions and may not fully protect public shareholders. No legal proceedings or material subsequent events were reported.
Important facts for investors to verify
- Confirm the intended issuer: this filing is for Haymaker Acquisition Corp. III, not Biote Corp.
- Review the warrant-liability restatement, valuation assumptions, and resulting potential non-cash earnings volatility.
- Track remediation of the material weakness and any later changes in internal-control conclusions.
- Verify trust funds, redemption terms, deferred underwriting fees, sponsor indemnity limits, and the business-combination deadline.
- Check subsequent filings for a proposed transaction, financing plans, liquidity needs, or changes to the disclosed risks.