CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this report that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward- looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Annual Report on Form 10-K may include, for example, statements about:
The forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in this Annual Report. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Unless otherwise stated in this report, or the context otherwise requires, references to:
Overview
We are a blank check company incorporated on June 10, 2020, as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this Report as our initial business combination. We recently identified and intend to effectuate an initial business combination with Quantum-Si Incorporated, a Delaware corporation (“Quantum-Si”).
We have generated no operating revenues to date and we will not generate operating revenues until we consummate our initial business combination. We expect to continue to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to complete our initial business combination will be successful.
Initial Public Offering
On September 9, 2020, we consummated our initial public offering (the “IPO”) of 11,500,000 units (the “Units”), which includes the issuance of 1,500,000 Units as a result of the underwriter’s exercise of their over-allotment option in full. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $115,000,000.
Simultaneously with the closing of the initial public offering, the Company consummated the private sale of 405,000 units (the “Private Placement Units”) to HighCape Capital Acquisition LLC, a Delaware limited liability company and sponsor to the Company (the “Sponsor”), at a purchase price of $10.00 per Private Placement Unit, generating gross proceeds to the Company of $4,050,000. The Private Placement Units are identical to the Units sold in the IPO, except that the Sponsor has agreed not to transfer, assign or sell any of the Private Placement Units (except to certain permitted transferees) until 30 days after the completion of the Company’s initial business combination. The warrants underlying the Private Placement Units are also not redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. No underwriting discounts or commissions were paid with respect to such sale. The issuance of the Private Placement Units was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.
Following the Closing of the IPO, a total of $115,000,000, comprised of $112,700,000 of the proceeds from the IPO (which amount includes $4,025,000 of the underwriter’s deferred discount) and $2,300,000 of the proceeds of the sale of the Private Placement Units, was placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A. maintained by Continental Stock Transfer & Trust Company, acting as trustee.
Our Class A common stock, units and warrants are each traded on Nasdaq under the symbols “CAPA”, “CAPAU” and “CAPAW”, respectively. Our units began trading on Nasdaq on September 4, 2020, and our Class A common stock and warrants began trading on Nasdaq on November 13, 2020.
Business Combination Agreement
On February 18, 2021, the Company entered into a business combination agreement with Tenet Merger Sub, Inc., our wholly-owned subsidiary (“Merger Sub”), and Quantum (the “Business Combination Agreement”). If the Business Combination Agreement is approved by our stockholders, and the business combination is consummated (the “Business Combination”), Merger Sub will merge with and into Quantum-Si with Quantum-Si surviving the merger as our wholly-owned subsidiary (the “Merger”). In connection with and following the consummation of the Merger, the Company will be renamed “Quantum-Si Incorporated” and is referred to herein as “New Quantum-Si” as of the time following such change of name.
Quantum-Si is an innovative life sciences company with the mission of transforming single molecule analysis and democratizing its use by providing researchers and clinicians access to the proteome, the set of proteins expressed within a cell.
As a consequence of the Business Combination, at the time the Merger becomes effective (such time, the “Effective Time”), each share of the Company’s Class B common stock that is issued and outstanding as of immediately prior to the Effective Time will be converted, on a one-for-one basis, into a share of New Quantum-Si Class A common stock. The Business Combination will have no effect on the Company’s Class A common stock that is issued and outstanding as of immediately prior to the Effective Time, which will continue to remain outstanding.
Additionally, as a consequence of the Merger, (i) each share of Quantum-Si capital stock (other than the Quantum-Si Series A preferred stock and any shares of Quantum-Si capital stock held immediately prior to the effective time of the Merger (the “Effective Time “) that is issued and outstanding as of immediately prior to the Effective Time will be automatically cancelled and extinguished and converted into the right to receive a number of shares of New Quantum-Si Class A common stock, (ii) each share of Quantum-Si Series A preferred stock that is issued and outstanding as of immediately prior to the Effective Time will be automatically cancelled and extinguished and converted into the right to receive a number of shares of New Quantum-Si Class B common stock; (iii) each option to purchase shares of Quantum-Si common stock, whether vested or unvested, that is outstanding and unexercised immediately prior to the Effective Time will be assumed by New Quantum-Si and will become an option (vested or unvested, as applicable) to purchase a number of shares of New Quantum-Si Class A common stock; and (iv) each Quantum-Si restricted stock unit outstanding immediately prior to the Effective Time will be assumed by New Quantum-Si and will become a restricted stock unit with respect to a number of shares of New Quantum-Si Class A common stock. New Quantum-Si Class B common stock will have the same economic terms as New Quantum-Si Class A common stock, but the New Quantum-Si Class B common stock will have twenty (20) votes per share.
In addition, if the Business Combination is consummated, the Company will file the proposed amended and restated certificate of incorporation to be adopted by the Company (the “Proposed Charter”) with the Secretary of State of the State of Delaware. As a consequence of adopting the Proposed Charter, New Quantum-Si will adopt a dual class structure, comprised of New Quantum-Si Class A common stock, which will carry one vote per share, and New Quantum-Si Class B common stock, which will carry twenty (20) votes per share.
Concurrently with the execution of the Business Combination Agreement, we entered into subscription agreements (the “PIPE Investor Subscription Agreements”) with certain institutional and accredited investors (the “PIPE Investors”), pursuant to which the PIPE Investors have agreed to purchase, immediately prior to the Closing, an aggregate of 42,500,000 shares of the Company’s Class A common stock at a purchase price of $10.00 per share (the “PIPE Financing”), for aggregate gross proceeds of $425.0 million.
In addition, concurrently with the execution of the Business Combination Agreement, we entered into subscription agreements (the “Foresite Subscription Agreements”), with certain affiliates of Foresite Capital Management, LLC (the “Foresite Funds”), pursuant to which the Foresite Funds will be issued 696,250 shares of the Company’s Class A common stock at a price of $0.001 per share for aggregate gross proceeds of $696.25 after a corresponding number of shares of the Company’s Class B common stock are irrevocably forfeited by the Sponsor (as defined below) to the Company for no consideration and automatically cancelled.
In connection with our IPO, our Sponsor and our initial stockholders (consisting of David Colpman, Antony Loebel and Robert Taub) and our other directors and officers at the time of our IPO entered into a letter agreement (the “Sponsor Letter Agreement”) to vote their shares in favor of the Business Combination, which will be presented at the special meeting of the stockholders (the “Special Meeting”) to vote on certain proposals in connection with the Business Combination (the “Transaction Proposals).
In addition, concurrently with the execution of the Business Combination Agreement, our Sponsor, David Colpman, Antony Loebel, Robert Taub, the Company, Deerfield Partners, L.P., and Quantum-Si entered into the Sponsor Letter Agreement (the “Sponsor Letter Agreement”), pursuant to which the Sponsor, each other holder of HighCape Class B common stock and Deerfield Partners, L.P. have agreed to, among other things, vote in favor of the Transaction Proposals in connection with the Business Combination.
Dr. Jonathan Rothberg (the founder and Chairman of Quantum Si, “Dr. Rothberg”) and certain stockholders of Quantum-Si affiliated with Dr. Rothberg (collectively, the “supporting Quantum-Si stockholders”) entered into a support agreement (the “Quantum-Si Transaction Support Agreement”) with the Company concurrently with the execution of the Business Combination Agreement, under which, each supporting Quantum-Si stockholder agreed, among other things, to support and vote in favor of the Business Combination Agreement and the related agreements to which Quantum-Si is or will be a party and the transactions contemplated thereby.
In connection with the consummation of the Business Combination, Quantum-Si and Dr. Rothberg will enter into an agreement (the “Executive Chairman Agreement”), effective as of the closing of the Business Combination (the “Closing”), pursuant to which Dr. Rothberg will advise New Quantum-Si’s Chief Executive Officer and provide guidance to the New Quantum-Si Board.