Business Context and Reporting Period
This filing is a Form 10-Q for the quarter ended September 30, 2021. Although the request identifies Biote Corp., the filing’s registrant is Haymaker Acquisition Corp. III, a Delaware blank-check company and shell company formed to pursue an initial business combination. It had not commenced operations and had generated no operating revenue as of September 30, 2021.
The company completed its initial public offering on March 4, 2021, with a partial underwriter over-allotment exercise on March 5, 2021. Its activities during the period primarily involved the IPO, maintaining the trust account, and searching for a target business.
Financial Metrics
| Metric | Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 |
|---|---|---|
| Operating revenue | $0 | $0 |
| Net income | $2.995 million | $12.291 million |
| Net income per Class A and Class B share | $0.08 | $0.38 |
| Operating and formation costs | $262,487 | $780,815 |
| Franchise tax expense | $26,628 | $115,069 |
| Gain from change in warrant fair value | $3.241 million | $17.611 million |
| Gain on trust-account investments | $43,200 | $48,981 |
| Net cash used in operating activities | Not separately provided | $1.206 million |
Reported net income was primarily non-operating and non-cash, resulting from the decrease in the fair value of warrant liabilities. Therefore, conventional revenue and operating-margin comparisons are not meaningful.
- Total assets were $318.234 million at September 30, 2021, including $317.549 million in the trust account and $294,918 of cash outside the trust account.
- Total liabilities were $22.186 million, including $10.994 million of warrant liabilities and $11.113 million of deferred underwriting fees.
- Class A shares subject to possible redemption were recorded as temporary equity at $317.5 million.
- Working capital was a surplus of $605,249 at September 30, 2021, compared with a $120,906 deficit at December 31, 2020.
- No debt was outstanding under working-capital loans at September 30, 2021. The sponsor promissory note balance was repaid in March 2021.
- Cash provided by financing activities was $318.н million? The filing reports $318,999,539, comprising IPO and private-placement proceeds, partly offset by offering costs and sponsor-note repayment.
Material Changes Versus Prior Comparable Period
- The company completed its IPO and partial over-allotment exercise, raising proceeds associated with 31.75 million public shares and placing $317.5 million in the trust account.
- Cash outside the trust account increased to $294,918 from $1,594 at December 31, 2020.
- Warrant liabilities were established and measured at fair value. Their fair value declined to $10.994 million at September 30, 2021, producing a $17.611 million gain for the nine-month period.
- The sponsor forfeited 687,500 founder shares in March 2021 following the partial exercise of the over-allotment option, leaving 7,937,500 Class B shares outstanding.
- The company restated previously issued financial statements to classify all redeemable Class A shares as temporary equity rather than permanent equity and revised earnings-per-share presentation. The restatement was non-cash and did not affect reported cash, operating expenses, or total cash flows.
- Compared with the inception period from July 6, 2020 through September 30, 2020, the company moved from no activity and no income to IPO-related activity and $12.291 million of reported net income; the filing does not provide a meaningful operating-period comparison because the company remains pre-combination.
Guidance, Outlook, Risks, Contingencies, and Unusual Items
- The company expects no operating revenue until, at the earliest, completion of an initial business combination.
- It must complete a business combination by March 4, 2023. If it fails, it must redeem the public shares and liquidate, subject to applicable legal requirements. Public warrants would expire worthless.
- Management stated that the company’s recurring costs and limited cash outside the trust account raise substantial doubt about its ability to continue as a going concern for one year after issuance of the financial statements. Management expects to address the uncertainty through a business combination, but provides no assurance that the transaction will occur within the permitted period.
- Public stockholders generally may redeem shares for their pro rata portion of the trust account in connection with a business combination or liquidation, subject to the company’s net tangible asset requirement and other restrictions.
- The $11.113 million deferred underwriting fee is payable only upon completion of a business combination and may be waived if no combination is completed.
- Warrant liabilities are remeasured each reporting period, which may cause material volatility in reported earnings and could adversely affect the share price or complicate the company’s ability to complete a business combination.
- The company identified a material weakness in internal control over financial reporting related to accounting for complex financial instruments. Disclosure controls were therefore deemed ineffective as of September 30, 2021. Management planned remediation through enhanced accounting research, documentation, and communication, but provided no assurance that remediation would be successful.
- COVID-19 could negatively affect the company’s financial position, results, or target-company search, although the specific impact was not determinable.
- The filing reports no legal proceedings, no off-balance-sheet arrangements, and no subsequent events requiring adjustment or disclosure.
Most Important Facts for Investors to Verify
- Confirm the registrant identity: the supplied filing is for Haymaker Acquisition Corp. III, not Biote Corp.
- Verify the status and terms of any initial business combination, including the March 4, 2023 deadline and potential shareholder redemptions.
- Assess the effect of the warrant-liability accounting and recurring fair-value gains or losses on reported earnings and equity.
- Review the restated financial statements and the remediation status of the material weakness in internal control over financial reporting.
- Confirm the amount and availability of funds outside the trust account, the deferred underwriting fee, and any future sponsor or working-capital financing.
- Evaluate whether the trust-account balance adequately protects public shareholders after fees, taxes, creditor claims, and potential redemptions.