Bailiwick of Jersey, Channel Islands
|
|
8000
|
|
Not Applicable
|
(State or other jurisdiction of
incorporation or organization) |
|
(Primary Standard Industrial
Classification Code Number) |
|
(I.R.S. Employer
Identification Number) |
Michael Labriola
Megan Baier
Elisa Sielski
Wilson Sonsini Goodrich & Rosati, P.C.
41 Old Street
London EC1 9AE
United Kingdom
Tel: +44 (0) 20 3963 4050
|
|
Henry Bennett
General Counsel
Babylon Holdings Limited
1 Knightsbridge Green
London, SW1X 7QA
Tel: +44 (0) 20 7100 0762
|
|
||||||||
Title of Each Class of Securities to
be Registered |
|
Amount to be
Registered(1) |
|
Proposed Maximum
Offering Price Per Share |
|
Proposed Maximum
Aggregate Offering Price |
|
Amount of
Registration Fee |
Class A ordinary shares(2)
|
|
370,530,280
|
|
$9.77(3)
|
|
$3,620,080,835.60(3)
|
|
$ 335,582
|
|
||||||||
|
(1)
|
Pursuant to Rule 416(a) under the Securities Act, this Registration Statement shall also cover any additional of the registrant’s Class A ordinary shares that become issuable as a result of any stock dividend, stock split, recapitalization, or other similar transaction effected without the receipt of consideration that results in an increase to the number of the registrant’s outstanding Class A ordinary shares, as applicable.
|
(2)
|
Includes 276,334,371 Class A ordinary shares issued and outstanding, 79,637,576 Class A ordinary shares issuable upon conversion of Class B ordinary shares and 14,558,333 Class A ordinary shares issuable upon exercise of warrants to purchase Class A ordinary shares.
|
(3)
|
Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based on the average of the high and low trading prices of the Class A ordinary shares on the New York Stock Exchange on November 3, 2021, which date is within five business days prior to filing this Registration Statement.
|
• |
Value-Based Care
|
• |
Clinical Services
a fee-for-service basis.
|
• |
Software Licensing
|
• |
2013: Founded by our Chief Executive Officer, Dr. Ali Parsadoust.
|
• |
2014: Became the first digital-first health service provider to be registered with the CQC, the healthcare services regulator and inspector in England.
|
• |
2015: Began providing clinical services through our virtual care platform, offering diagnosis, advice and treatments via medical professionals to patients on a remote basis.
|
• |
2016: First expanded outside the United Kingdom, launching in Rwanda.
|
• |
2017: Our technology was made available for licensing to corporate and institutional clients.
|
• |
2018: We launched our agreement with Prudential in Asia and since then have been rolling out our symptom checker and health assessment solutions across 11 countries.
|
• |
2018: We launched our partnership with TELUS in Canada to use our platform to deliver digital health services across Canada.
|
• |
2020: Our
first end-to-end digital,
|
• |
2021: We completed a business combination with Alkuri, a special purpose acquisition company, on October 21, 2021, pursuant to which our Class A ordinary shares and warrants were listed on the NYSE. In addition, we and Alkuri entered into Subscription Agreements and completed a private placement of our Class A ordinary shares to certain investors for an aggregate purchase price of $224 million.
|
• |
DayToDay.
|
• |
Higi
.
|
• |
Fresno Health Care.
provide end-to-end healthcare
|
• |
Meritage Medical Network.
|
NYSE Symbol for our Class A Ordinary Shares | “BBLN” | |
Registered Shares being registered on behalf of the Registered Holders | 370,530,280 Class A ordinary shares. | |
Class A Ordinary shares issued and outstanding immediately before and after the effectiveness of the registration statement of which this prospectus forms a part | 330,257,184 Class A ordinary shares. | |
Class B Ordinary shares issued and outstanding immediately before and after the effectiveness of the registration statement of which this prospectus forms a part | 79,637,576 Class B ordinary shares. | |
Use of proceeds | We will not receive any proceeds from the sale by the Registered Holders of Registered Shares under this prospectus. | |
Voting Rights |
We have two classes of authorized ordinary shares: Class A ordinary shares and Class B ordinary shares. The rights of the holders of Class A ordinary shares and Class B ordinary shares are materially identical, except with respect to voting and conversion. The holders of Class A ordinary shares are entitled to one vote per share, and the holders of Class B ordinary shares are entitled to fifteen votes per share, on all matters that are subject to shareholder vote. Each Class B ordinary share may be converted into one Class A ordinary share and will be automatically converted into one Class A ordinary share upon transfer thereof, subject to certain exceptions.
Holders of our Class A ordinary shares and Class B ordinary shares will generally vote together as a single class, unless otherwise required by law or our amended and restated certificate of incorporation. As of the effective date of the registration statement of which this prospectus is a part, our Founder beneficially owns approximately 83.4% of the voting power of our outstanding capital stock and will have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors.
|
|
Risk factors |
See “
Risk Factors
|
• |
22,980,900
ordinary shares issuable upon the exercise of granted and outstanding options under our Company Share Option Plan, Long-Term Incentive Plan, and 2021 Equity Incentive Plan at a weighted-average exercise price of $1.46 per
share;
|
• |
8,625,000 public warrants and 5,933,333 private placement warrants to purchase Class A ordinary shares;
|
• |
42,980,214 Class A ordinary shares
available
for issuance under the 2021 Equity Incentive Plan; and
|
• |
1,757,499 Class A ordinary shares issuable pursuant to the AlbaCore Warrants.
|
• |
We have a history of net losses, anticipate increasing expenses in the future, and may not be able to achieve or maintain profitability;
|
• |
Our relatively limited operating history makes it difficult to evaluate our current business and future prospects and increases the risk of your investment;
|
• |
If we fail to effectively manage our growth, we may be unable to execute our business plan, adequately address competitive challenges or maintain our corporate culture, and our business, financial condition and results of operations would be harmed;
|
• |
Our business and growth strategy depend on our ability to maintain and expand a network of qualified providers. If we are unable to do so, our future growth would be limited and our business, financial condition and results of operations would be harmed;
|
• |
We are dependent on our relationships with physician-owned entities to hold contracts and provide healthcare services. We do not own such professional entities, and our business could be harmed if relationships with either those entities or their owners were disrupted;
|
• |
If we are unable to attract new customers, our revenue growth could be slower than expected, and our business may be adversely affected;
|
• |
If our existing customers do not continue to use our services or renew their contracts with us, renew at lower fee levels or decline to purchase additional applications and services from us, it could have a material adverse effect on our business, financial condition and results of operations;
|
• |
Our revenue sources are highly concentrated and the loss of any of our key contracts could have a material adverse effect on our business, financial condition and results of operations;
|
• |
Under many of our agreements with health plans, we assume some or all of the risk that the cost of providing services will exceed our compensation. Over time, we expect the proportion of risk-based revenue may increase. We do not have control over these costs, particularly in cases where members use third party services instead of our services;
|
• |
We may face intense competition, which could limit our ability to maintain or expand market share within our industry, and if we do not maintain or expand our market share, our business and operating results will be harmed;
|
• |
If we are not able to develop and release new solutions and services, or successful enhancements, new features and modifications to our existing solutions and services, our business could be adversely affected;
|
• |
There are significant risks associated with estimating the amount of revenue that we recognize under our licensing agreements, and risk-based agreements with health plans, and if our estimates of revenue are materially inaccurate, it could impact the timing and the amount of our revenue recognition or have a material adverse effect on our business, financial condition, results of operations and cash flows;
|
• |
Security breaches, loss of data and other disruptions could compromise sensitive information related to our business or members, or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and reputation;
|
• |
Our use, disclosure, and other processing of personally identifiable information, including health information, is subject to the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, (“HITECH”), and their implementing regulations, GDPR, the Data Protection Act 2018 (“DPA 2018”) and other privacy, and security regulations, and our failure to comply with those regulations or to adequately secure the information we hold could result in significant liability or reputational harm and, in turn, a material adverse effect on our customer base, member base and revenue;
|
• |
If we are unable to obtain, maintain and enforce intellectual property protection for our technology or if the scope of our intellectual property protection is not sufficiently broad, others may be able to develop and commercialize technology substantially similar to our technology, and our ability to successfully commercialize our technology may be adversely affected;
|
• |
We may become subject to medical liability claims, which could cause us to incur significant expenses and may require us to pay significant damages if not covered by insurance;
|
• |
We have been, and may in the future become, subject to litigation or regulatory investigation, which could harm our business;
|
• |
We rely on internet infrastructure, bandwidth providers, third-party computer hardware and software and other third parties for providing services to our customers and members, and any failure or interruption in the services provided by these third parties could expose us to litigation and negatively impact our relationships with customers and members, adversely affecting our operating results;
|
• |
We conduct business in a heavily regulated industry and if we fail to comply with these laws and government regulations, or if the rules and regulations change or the approach that regulators take in classifying our products and services under such regulations change, we could incur penalties or be required to make significant changes to our operations, products, or services or experience adverse publicity, which could have a material adverse effect on our business, financial condition, and results of operations;
|
• |
The impact of recent healthcare reform legislation and other changes in the healthcare industry and in healthcare spending on us is currently unknown, but may adversely affect our business, financial condition and results of operations;
|
• |
We depend on our talent to grow and operate our business, and if we are unable to hire, integrate, develop, motivate and retain personnel, we may not be able to grow effectively; and
|
• |
The other matters described in the section titled “
Risk Factors
|
• |
On October 21, 2021, the parties consummated the transactions contemplated by that certain Merger Agreement dated as of June 3, 2021 by and among Alkuri Global Acquisition Corp., a Delaware corporation (“Alkuri”), Babylon Holdings Limited (“Babylon”), and other parties thereto whereby Alkuri became a wholly owned subsidiary of Babylon (the “Business Combination”);
|
• |
On October 21, 2021, Babylon sold 22,400,000 Class A Ordinary Shares to subscribers pursuant to a Subscription Agreement dated June 3, 2021 for gross proceeds of $224,000,000 to Babylon in connection with the Business Combination (the “PIPE Sale”); and
|
• |
the probable acquisition of higi SH Holdings Inc. (“Higi”) by Babylon (the “Higi acquisition”).
|
• |
Babylon’s historical unaudited consolidated financial statements as of and for the six months ended June 30, 2021;
|
• |
Babylon’s historical audited consolidated financial statements as of and for the year ended December 31, 2020;
|
• |
Higi’s historical unaudited consolidated financial statements as of and for the six months ended June 30, 2021;
|
• |
Higi’s historical audited consolidated financial statements as of and for the year ended December 31, 2020;
|
• |
Alkuri’s historical condensed consolidated financial statements as of and for the six months ended June 30, 2021; and
|
• |
Alkuri’s historical condensed consolidated financial statements as of and for the quarter ended March 31, 2021. As a newly incorporated business on December 1, 2020, the results of Alkuri prior to January 1, 2021 were not material.
|
(in thousands, except for share amounts)
|
||||
Shares transferred at Closing
|
336,427,107 | |||
Value per share
(1)
|
$ | 10.90 | ||
|
|
|||
Total Share Consideration
|
|
|
|
|
|
|
(1) |
Share Consideration is calculated using the value of Alkuri Common Stock at Closing.
|
Alkuri
(Historical) |
Babylon
(Historical) |
Combined Pro
Forma
|
Babylon
Equivalent Per Share Pro
Forma
|
|||||||||||||
As of and for the period ending
|
Jun-21
|
Jun-21
|
||||||||||||||
Book Value per share
(1)
|
$ | 0.45 | $ | 0.06 | $ | 0.76 | $ | 0.23 | ||||||||
Weighted averages shares outstanding - basic and diluted
|
813,746,192 | |||||||||||||||
Net loss per share - basic and diluted
|
$ | (0.09 | ) | |||||||||||||
Weighted average shares outstanding of common share - basic and diluted
|
11,104,045 | 369,801,010 | 336,427,107 | |||||||||||||
Net loss per share of common share - basic and diluted
(2)
|
$ | (0.69 | ) | (0.22 | ) | (0.07 | ) |
(1) |
Book value per share = Total equity excluding preferred shares divided by shares outstanding
|
(2) |
The equivalent pro forma basic and diluted per share data for Babylon is calculated by multiplying the combined pro forma per share data by the 0.302 Exchange Ratio.
|
Alkuri
(Historical) |
Babylon
(Historical) |
Combined Pro
Forma |
Babylon
Equivalent Per Share Pro Forma |
|||||||||||||
As of and for the period ending
|
Mar-21
|
Dec-20
|
||||||||||||||
Book Value per share
(1)
|
$ | 0.50 | $ | 0.06 | $ | 0.97 | $ | 0.29 | ||||||||
Weighted averages shares outstanding - basic and diluted
|
803,901,000 | |||||||||||||||
Net loss per share - basic and diluted
|
$ | (0.23 | ) | |||||||||||||
Weighted average shares outstanding of common share - basic and diluted
|
10,052,006 | 369,801,010 | 336,427,107 | |||||||||||||
Net loss per share of common share - basic and diluted
(2)
|
$ | (0.12 | ) | (0.83 | ) | (0.25 | ) |
(1) |
Book value per share = Total equity excluding preferred shares divided by shares outstanding
|
(2) |
The equivalent pro forma basic and diluted per share data for Babylon is calculated by multiplying the combined pro forma per share data by the 0.302 Exchange Ratio.
|
Statement of Financial Position
Amounts in thousands, except for
per share amount |
||||||||||||||||||||||||||||||||||||
As of
June 30, 2021 |
As of
June 30, 2021 |
As of
June 30, 2021 |
As of
June 30, 2021 |
As of
June 30, 2021 |
||||||||||||||||||||||||||||||||
Alkuri
(Historical) |
Babylon
(Historical) |
Higi
Acquisition Historical |
Combined
(Historical) |
PPA
Adjustments |
Pro Forma
Adjustments |
Pro
Forma Combined |
||||||||||||||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||||||||||||||
Right of use of assets
|
— | 3,487 | — | 3,487 | — | 3,487 | ||||||||||||||||||||||||||||||
Trade and other receivables
|
— | 28,218 | 2,474 | 30,692 | — | 30,692 | ||||||||||||||||||||||||||||||
Prepayments and contract assets
|
987 | 9,253 | 384 | 10,624 | — | 10,624 | ||||||||||||||||||||||||||||||
Cash and cash equivalents
|
71 | 42,381 | 5,458 | 47,910 | (10,767 | ) | (CC | ) | 224,000 | (A | ) | 211,501 | ||||||||||||||||||||||||
(5,458 | ) | (EE | ) | — | ||||||||||||||||||||||||||||||||
(16,259 | ) | (D | ) | |||||||||||||||||||||||||||||||||
36,429 | (B | ) | ||||||||||||||||||||||||||||||||||
(63,773 | ) | (H | ) | |||||||||||||||||||||||||||||||||
(581 | ) | (H | ) | |||||||||||||||||||||||||||||||||
Assets held for sale
|
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Restricted cash
|
— | — | 273 | 273 | — | — | 273 | |||||||||||||||||||||||||||||
Other current assets
|
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total current assets
|
1,058 | 83,339 | 8,589 | 92,986 | (16,225 | ) | 179,816 | 256,577 | ||||||||||||||||||||||||||||
Property, plant and equipment
|
— | 2,879 | 114 | 2,993 | — | 2,993 | ||||||||||||||||||||||||||||||
Right of use of assets
|
— | 10,135 | 1,233 | 11,368 | — | 11,368 | ||||||||||||||||||||||||||||||
Investments
|
— | 12,600 | — | 12,600 | (12,600 | ) | (AA | ) | — | |||||||||||||||||||||||||||
Marketable securities held in Trust Account
|
345,022 | — | — | 345,022 | — | (345,022 | ) | (B | ) | — | ||||||||||||||||||||||||||
Goodwill
|
— | 31,303 | — | 31,303 | 23,440 | (AA | ) | 99,571 | ||||||||||||||||||||||||||||
1,624 | (BB | ) | ||||||||||||||||||||||||||||||||||
70,320 | (CC | ) | ||||||||||||||||||||||||||||||||||
231 | (DD | ) | ||||||||||||||||||||||||||||||||||
(25,805 | ) | (DD | ) | |||||||||||||||||||||||||||||||||
(1,542 | ) | (EE | ) | |||||||||||||||||||||||||||||||||
Other intangible assets
|
— | 102,331 | 231 | 102,562 | (231 | ) | (DD | ) | 134,189 | |||||||||||||||||||||||||||
31,858 | (DD | ) | ||||||||||||||||||||||||||||||||||
Other noncurrent assets
|
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total non current assets
|
345,022 | 159,248 | 1,578 | 505,848 | 87,295 | (345,022 | ) | 248,121 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
TOTAL ASSETS
|
|
346,080
|
|
|
242,587
|
|
|
10,167
|
|
|
598,834
|
|
|
71,070
|
|
|
(165,206
|
)
|
|
504,698
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||||||||||||||||||||||||||
Accounts payable
|
— | 26,231 | 1,012 | 27,243 | — | 27,243 | ||||||||||||||||||||||||||||||
Accrued liabilities
|
4,099 | 31,574 | 1,072 | 36,745 | — | (4,099 | ) | (D | ) | 32,646 | ||||||||||||||||||||||||||
Contract Liabilities
|
— | 23,136 | — | 23,136 | — | 23,136 | ||||||||||||||||||||||||||||||
Deferred grant income - tax credit
|
1,264 | 1,264 | — | 1,264 | ||||||||||||||||||||||||||||||||
Current maturities of related party promissor
|
— | — | 940 | 940 | — | 940 | ||||||||||||||||||||||||||||||
Lease Liabilities
|
— | 1,984 | 332 | 2,316 | — | 2,316 | ||||||||||||||||||||||||||||||
Loans and Borrowings
|
— | 473 | — | 473 | — | (EE | ) | — | 6,473 | |||||||||||||||||||||||||||
6,000 | (CC | ) | ||||||||||||||||||||||||||||||||||
Liabilities directly associated with the assets
|
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Accrued offering costs
|
85 | — | — | 85 | — | (85 | ) | (D | ) | — | ||||||||||||||||||||||||||
Deferred liability
|
12,075 | — | — | 12,075 | — | (12,075 | ) | (D | ) | — | ||||||||||||||||||||||||||
Other current liabilities
|
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total current liabilities
|
16,259 | 84,662 | 3,356 | 104,277 | 6,000 | (16,259 | ) | 94,018 | ||||||||||||||||||||||||||||
Deferred tax liability
|
— | 768 | — | 768 | 6,053 | (DD | ) | 6,821 | ||||||||||||||||||||||||||||
Related party convertible promissory notes
|
— | — | 7,000 | 7,000 | (7,000 | ) | (EE | ) | — | |||||||||||||||||||||||||||
Deferred rent liability
|
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Other long-term liabilities
|
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Contract Liabilities
|
— | 81,982 | — | 81,982 | — | 81,982 | ||||||||||||||||||||||||||||||
Deferred grant income - tax credit
|
— | 6,340 | — | 6,340 | — | 6,340 | ||||||||||||||||||||||||||||||
Common stock subject to possible redemptio
|
— | — | — | — | — | 303,328 | (E | ) | — | |||||||||||||||||||||||||||
(303,328 | ) | (E | ) | |||||||||||||||||||||||||||||||||
Lease Liabilities
|
— | 10,815 | 1,435 | 12,250 | — | 12,250 | ||||||||||||||||||||||||||||||
Warrant Liability
|
21,493 | — | — | 21,493 | — | 21,493 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total liabilities
|
|
37,752
|
|
|
184,567
|
|
|
11,791
|
|
|
234,110
|
|
|
5,053
|
|
|
(16,259
|
)
|
|
222,904
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Common stock subject to possible redemptio
|
303,328 | 303,328 | (303,328 | ) | (E | ) | — |
Statement of Financial Position
Amounts in thousands, except for
per share amounts |
||||||||||||||||||||||||||||||||||||
As of
June 30, 2021 |
As of
June 30, 2021 |
As of
June 30, 2021 |
As of
June 30, 2021 |
As of
June 30, 2021 |
||||||||||||||||||||||||||||||||
Alkuri
(Historical) |
Babylon
(Historical) |
Higi
Acquisition Historical |
Combined
(Historical) |
PPA
Adjustments |
Pro Forma
Adjustments |
Pro
Forma Combined |
||||||||||||||||||||||||||||||
Common stock subject to possible redemption
|
303,328 | 303,328 | (303,328 | ) | (E | ) | — | |||||||||||||||||||||||||||||
Stockholders’ equity (deficit):
|
||||||||||||||||||||||||||||||||||||
Common stock Class A
|
1 | — | 6 | 7 | (6 | ) | (1 | ) | (C | ) | — | |||||||||||||||||||||||||
Common stock class B
|
1 | — | — | 1 | — | (1 | ) | (C | ) | — | ||||||||||||||||||||||||||
Series B preferred stock
|
— | — | — | — | — | (BB | ) | — | ||||||||||||||||||||||||||||
Series
A-3
preferred stock
|
— | — | — | — | — | (BB | ) | — | ||||||||||||||||||||||||||||
Series
A-2
preferred stock
|
— | — | — | — | — | (BB | ) | — | ||||||||||||||||||||||||||||
Series
A-1
preferred stock
|
— | — | — | — | — | (BB | ) | — | ||||||||||||||||||||||||||||
Additional
paid-in
capital
|
12,636 | — | 89,197 | 101,833 | — | (AA | ) | 223,998 | (A | ) | 322,313 | |||||||||||||||||||||||||
(89,197 | ) | (BB | ) | (7,636 | ) | (C | ) | |||||||||||||||||||||||||||||
53,553 | (CC | ) | (5,265 | ) | (E | ) | ||||||||||||||||||||||||||||||
108,829 | (F | ) | ||||||||||||||||||||||||||||||||||
— | ||||||||||||||||||||||||||||||||||||
(29 | ) | (G | ) | |||||||||||||||||||||||||||||||||
(63,773 | ) | (H | ) | |||||||||||||||||||||||||||||||||
Ordinary share capital
|
— | 10 | — | 10 | — | 29 | (G | ) | 41 | |||||||||||||||||||||||||||
2 | (A | ) | ||||||||||||||||||||||||||||||||||
Preference share capital
|
— | 4 | — | 4 | — | 4 | ||||||||||||||||||||||||||||||
Share premium
|
— | 557,569 | — | 557,569 | — | — | 557,569 | |||||||||||||||||||||||||||||
Share based payment reserve
|
— | 45,286 | — | 45,286 | — | 45,286 | ||||||||||||||||||||||||||||||
Retained earnings/(accumulated deficit)
|
(7,638 | ) | (544,411 | ) | (90,827 | ) | (642,876 | ) | 101,667 | (BB | ) | 7,638 | (C | ) | (642,981 | ) | ||||||||||||||||||||
(108,829 | ) | (F | ) | |||||||||||||||||||||||||||||||||
— | ||||||||||||||||||||||||||||||||||||
(581 | ) | |||||||||||||||||||||||||||||||||||
Non-controlling
interests
|
— | (2,046 | ) | — | (2,046 | ) | — | (2,046 | ) | |||||||||||||||||||||||||||
Translation differences
|
— | 1,608 | — | 1,608 | — | 1,608 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total stockholders’ equity
|
|
5,000
|
|
|
58,020
|
|
|
(1,624
|
)
|
|
61,396
|
|
|
66,017
|
|
|
154,381
|
|
|
281,794
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
346,080
|
|
|
242,587
|
|
|
10,167
|
|
|
598,834
|
|
|
71,070
|
|
|
(165,206
|
)
|
|
504,698
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) |
To reflect the proceeds received from the PIPE Investment with the corresponding issuance of 22,400,000 Babylon Class A Shares at US$10.00 per share, or $224 million.
|
(B) |
To reflect the release of cash from marketable securities held in the trust account after the redemptions by Alkuri shareholders.
|
(C) |
To reflect the elimination of historical accumulated deficit in Alkuri as it is the accounting acquiree.
|
(D) |
To reflect the settlement of Alkuri’s historical current liabilities at Closing.
|
(E) |
To reflect the reclassification of Alkuri Class A Common Stock subject to possible redemption of approximately $303 million from temporary equity under U.S. GAAP to a liability under IFRS, because the right to redeem is at the option of the holder. Additional adjustments reflect the redemption of 30,857,347 shares of Alkuri common stock which resulted in the reduction of the investments held in the trust account balance by $308 million and a reduction of APIC by $5.3 million.
|
(F) |
To reflect the fair value of share consideration of $120.6 million in excess of Alkuri net monetary assets acquired of $11.8 million as a Recapitalization transaction expense of $108.8 million. The fair value of share consideration was estimated based on the market capitalization of the combined company based on the closing stock price of Babylon Holdings Limited, and after taking into account the Stockholder Earnout and Sponsor Earnout. The fair value Alkuri’s net monetary assets was primarily composed of Marketable securities held in trust, including the effect of redemptions, and Alkuri’s historical condensed consolidated financial statements.
|
(G) |
To reflect the Business Combination of Babylon through the issuance of 290,000,000 of Babylon Class A Shares as consideration for the Business Combination assuming no redemptions.
|
(H) |
To reflect the payment of an aggregate of $63.8 million of legal, financial advisory and other professional fees that are directly attributable to the equity issuance costs as part of the Business Combination, which is reflected as an adjustment to additional paid in capital. These expenses were not previously accounted for in the financial statements as for the twelve months ended December 31, 2020 and as of June 30, 2021. Furthermore, expenses related to audit fees were expensed and adjusted for in retained earnings.
|
State of Profit and Loss
|
||||||||||||||||||||||||||||
January 1,
2021 to June 30, 2021 |
January 1,
2021 to June 30, 2021 |
January 1,
2021 to June 30, 2021 |
January 1,
2021 to June 30, 2021 |
January 1,
2021 to June 30, 2021 |
||||||||||||||||||||||||
Alkuri
(Historical) |
Babylon
(Historical) |
Higi
Acquisition |
Combined
(Historical) |
Purchase
price allocation adjustments |
Pro Forma
Adjustments |
Pro Forma
Combined |
||||||||||||||||||||||
Revenue
|
— | 128,771 | 4,621 | 133,392 | — | — | 133,392 | |||||||||||||||||||||
Cost of care delivery
|
— | (92,137 | ) | — | (92,137 | ) | — | — | (92,137 | ) | ||||||||||||||||||
Formation and operating costs
|
(5,266 | ) | — | — | (5,266 | ) | — | — | (5,266 | ) | ||||||||||||||||||
Platform & application expense
|
— | (21,377 | ) | (21,377 | ) | — | — | (21,377 | ) | |||||||||||||||||||
Research & development and technology expenses
|
— | (17,201 | ) | (8,638 | ) | (25,839 | ) | — | — | (25,839 | ) | |||||||||||||||||
Sales, General and administrative expenses
|
— | (76,606 | ) | (1,947 | ) | (78,553 | ) | (2,264 | ) (DD) | — | (80,817 | ) | ||||||||||||||||
— | — | |||||||||||||||||||||||||||
Recapitalization transaction expenses
|
— | — | — | — | — | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating loss
|
(5,266 | ) | (78,550 | ) | (5,964 | ) | (89,780 | ) | (2,264 | ) | — | (92,044 | ) | |||||||||||||||
Finance costs
|
— | (2,243 | ) | (645 | ) | (2,888 | ) | — | — | (2,888 | ) | |||||||||||||||||
Finance income
|
23 | 28 | 1,010 | 1,061 | — | (23 | ) (K) | 1,038 | ||||||||||||||||||||
Change in FV of warrant liability
|
(2,389 | ) | — | — | (2,389 | ) | — | — | (2,389 | ) | ||||||||||||||||||
Exchange gain/(loss)
|
— | (91 | ) | — | (91 | ) | — | — | (91 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net finance expense
|
(2,366 | ) | (2,306 | ) | 365 | (4,307 | ) | — | (23 | ) | (4,330 | ) | ||||||||||||||||
Gain/Loss On Sale
|
3,917 | 3,917 | — | 3,917 | ||||||||||||||||||||||||
Share of loss of equity-accounted investees
|
— | (1,276 | ) | — | (1,276 | ) | — | — | (1,276 | ) | ||||||||||||||||||
Interest income
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Other expense (income)
|
— | — | — | — | 10,840 | (AA) | — | 10,840 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income (loss) before income taxes
|
(7,632 | ) | (78,215 | ) | (5,599 | ) | (91,446 | ) | 8,576 | (23 | ) | (82,893 | ) | |||||||||||||||
Taxcredit on loss
|
— | 2,493 | (59 | ) | 2,434 | — | — | 2,434 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss) attributable to common stockholders
|
(7,632 | ) | (75,722 | ) | (5,658 | ) | (89,012 | ) | 8,576 | (23 | ) | (80,459 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders - Basic and Diluted
|
813,746,192 | 369,801,010 | ||||||||||||||||||||||||||
Net loss per share attributable to common stockholders - Basic and Diluted
|
(0.09 | ) | (0.22 | ) |
State of Profit and Loss
|
||||||||||||||||||||||||||||||||||||
January 1,
2021 to March 31, 2021 |
January 1,
2020 to December 31, 2020 |
January 1,
2020 to December 31, 2020 |
January 1,
2020 to December 31, 2020 |
January 1,
2020 to December 31, 2020 |
For Periods
shown below |
|||||||||||||||||||||||||||||||
Alkuri
(Historical) |
Babylon
(Historical) |
Higi
Acquisition |
Combined
(Historical) |
Purchase
price allocation adjustments |
Pro Forma
Adjustments |
Pro Forma
Combined |
||||||||||||||||||||||||||||||
Revenue
|
— | 79,272 | 9,486 | 88,758 | — | — | 88,758 | |||||||||||||||||||||||||||||
Cost of care delivery
|
— | (67,254 | ) | — | (67,254 | ) | — | — | (67,254 | ) | ||||||||||||||||||||||||||
Formation and operating costs
|
(1,075 | ) | — | — | (1,075 | ) | — | — | (1,075 | ) | ||||||||||||||||||||||||||
Platform & application expense
|
— | (48,664 | ) | — | (48,664 | ) | — | — | (48,664 | ) | ||||||||||||||||||||||||||
Research & development and technology expenses
|
— | (35,524 | ) | (15,500 | ) | (51,024 | ) | — | — | (51,024 | ) | |||||||||||||||||||||||||
Sales, General and administrative expenses
|
— | (103,341 | ) | (4,165 | ) | (107,506 | ) | (4,528 | ) | (DD | ) | — | (112,615 | ) | ||||||||||||||||||||||
— | (581 | ) | (H | ) | ||||||||||||||||||||||||||||||||
Recapitalization transaction expenses
|
— | — | — | — | — | (108,829 | ) | (J | ) | (108,829 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Operating loss
|
(1,075 | ) | (175,511 | ) | (10,179 | ) | (186,765 | ) | (4,528 | ) | (109,410 | ) | (300,703 | ) | ||||||||||||||||||||||
Finance costs
|
— | (4,530 | ) | (6,296 | ) | (10,826 | ) | — | (3,266 | ) | (L | ) | (14,092 | ) | ||||||||||||||||||||||
Finance income
|
10 | 610 | 3,000 | 3,620 | — | (10 | ) | (K | ) | 3,610 | ||||||||||||||||||||||||||
Change in FV of warrant liability
|
(92 | ) | — | — | (92 | ) | — | — | (92 | ) | ||||||||||||||||||||||||||
Exchange gain/(loss)
|
— | (2,836 | ) | — | (2,836 | ) | — | — | (2,836 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net finance expense
|
(82 | ) | (6,756 | ) | (3,296 | ) | (10,134 | ) | — | (3,276 | ) | (13,410 | ) | |||||||||||||||||||||||
Share of loss of equity-accounted investees
|
— | (1,124 | ) | — | (1,124 | ) | — | — | (1,124 | ) | ||||||||||||||||||||||||||
Interest income
|
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Other expense (income)
|
— | — | — | — | 14,564 | (AA | ) | — | 14,564 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Income (loss) before income taxes
|
(1,157 | ) | (183,391 | ) | (13,475 | ) | (198,023 | ) | 10,036 | (112,686 | ) | (300,673 | ) | |||||||||||||||||||||||
Taxcredit on loss
|
— | (4,639 | ) | (93 | ) | (4,732 | ) | — | — | (4,732 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net income (loss) attributable to common stockholders
|
(1,157 | ) | (188,030 | ) | (13,568 | ) | (202,755 | ) | 10,036 | (112,686 | ) | (305,405 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Outstanding
Shares |
||||||||||||||||||||||||||||||||||||
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders - Basic and Diluted
|
803,901,000 | 369,801,010 | ||||||||||||||||||||||||||||||||||
Net loss per share attributable to common stockholders - Basic and Diluted
|
(0.23 | ) | (0.83 | ) |
(J) |
As discussed in (F) the listing expense charge to recapitalization transaction expenses is $108.8 million.
|
(K) |
Reflects the elimination of interest income on Alkuri’s Trust Account.
|
(L) |
Reflects the adjustment related to the bridge financing obtained by Babylon. On August 18, 2021, the Group issued $50.0 million in unsecured bonds at a discount of 4.0% (“Unsecured Bonds”), including the
non-cash
conversion of $8.0 million in borrowings under the loan agreement dated July 15, 2021 with VNV (Cyprus) Limited into Unsecured Bonds. The proceeds from the Unsecured Bonds can be used for general corporate purposes. For purposes of the pro forma statements, the Unsecured Bonds are shown to be repaid in full once the transaction closes. Therefore, the capitalized costs associated with the financing have been expensed during the twelve months ended December 31, 2020.
|
Pro Forma
Combined Company |
||||
Summary Unaudited Pro Forma Condensed Combined
|
||||
Statement of Operations Data
|
||||
Period Ending December 31, 2020 Babylon and March 31, 2021, Alkuri
|
||||
Revenue
|
88,758 | |||
Net loss per share – basic and diluted
|
$ | (0.83 | ) | |
Weighted-average Common shares outstanding – basic and diluted
|
369,801,010 | |||
Summary Unaudited Pro Forma Condensed Combined
|
||||
Balance Sheet Data as of December 31, 2020
|
||||
Total assets
|
515,635 | |||
Total liabilities
|
157,004 | |||
Total stockholders equity
|
358,631 |
Pro Forma
Combined Company |
||||
Summary Unaudited Pro Forma Condensed Combined
|
||||
Statement of Operations Data
|
||||
Period Ending June 30, 2021
|
||||
Revenue
|
133,392 | |||
Net loss per share – basic and diluted
|
$ | (0.22 | ) | |
Weighted-average Common shares outstanding – basic and diluted
|
369,801,010 | |||
Summary Unaudited Pro Forma Condensed Combined
|
||||
Balance Sheet Data as of June 30, 2021
|
||||
Total assets
|
504,698 | |||
Total liabilities
|
222,904 | |||
Total stockholders equity
|
281,794 |
Reclassifications and US GAAP to IFRS
Adjustments |
||||||||||||||||||||
(USD in thousands)
|
Higi
(US GAAP) |
Reclassifications
1 |
Leases
2 |
Share-based
Payments
3
|
Adjusted Higi
(IFRS) |
|||||||||||||||
For the six months ended June 30, 2021
|
||||||||||||||||||||
Revenue
|
4,621 | — | — | — | 4,621 | |||||||||||||||
Cost of Revenues
|
||||||||||||||||||||
Depreciation of Higi stations
|
30 | (30 | ) | — | — | — | ||||||||||||||
Other
|
3,567 | (3,567 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cost of revenue
|
|
3,597
|
|
|
(3,597
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Gross income (loss)
|
|
1,024
|
|
|
3,597
|
|
|
—
|
|
|
—
|
|
|
4,621
|
|
|||||
Research and development expenses
|
— | 8,638 | 8,638 | |||||||||||||||||
Sales, general & administration costs
|
32 | 1,894 | 24 | (3 | ) | 1,947 | ||||||||||||||
Operating expenses
|
6,969 | (6,939 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating Loss
|
|
(5,977
|
)
|
|
34
|
|
(24 | ) | 3 | (5,964 | ) | |||||||||
Finance costs
|
— | 645 | — | — | 645 | |||||||||||||||
Finance income
|
— | (1,010 | ) | — | — | (1,010 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net finance expense (income)
|
|
—
|
|
|
(365
|
)
|
— | — | (365 | ) | ||||||||||
Interest expense
|
611 | (611 | ) | — | — | — | ||||||||||||||
Loss on discount related to conversion of promissory notes
|
— | — | — | — | — | |||||||||||||||
Forgiveness of paycheck protection program funds
|
(1,010 | ) | 1,010 | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net other expense
|
(399 | ) | 399 | — | — | — | ||||||||||||||
Income tax expense (benefit)
|
59 | — | — | — | 59 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net Loss
|
|
(5,637
|
)
|
|
—
|
|
|
(24
|
)
|
|
3
|
|
|
(5,658
|
)
|
Reclassifications and US GAAP to IFRS
Adjustments |
||||||||||||||||||||
(USD in thousands)
|
Higi
(US GAAP) |
Reclassifications
1 |
Leases
2 |
Share-based
Payments
3
|
Adjusted Higi
(IFRS) |
|||||||||||||||
For the year ended December 31, 2020
|
||||||||||||||||||||
Revenue
|
9,486 | — | — | — | 9,486 | |||||||||||||||
Cost of Revenues
|
||||||||||||||||||||
Depreciation of Higi stations
|
151 | (151 | ) | — | — | — | ||||||||||||||
Other
|
6,676 | (6,676 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cost of revenue
|
|
6,827
|
|
|
(6,827
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Gross income (loss)
|
|
2,659
|
|
|
6,827
|
|
|
—
|
|
|
—
|
|
|
9,486
|
|
|||||
Research and development expenses
|
— | 15,500 | — | — | 15,500 | |||||||||||||||
Sales, general & administration costs
|
— | 4,098 | 56 | 11 | 4,165 | |||||||||||||||
Operating expenses
|
12,534 | (12,534 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating Loss
|
|
(9,875
|
)
|
|
(237
|
)
|
|
(56
|
)
|
|
(11
|
)
|
|
(10,179
|
)
|
|||||
Finance costs
|
— | 6,296 | — | — | 6,296 | |||||||||||||||
Finance income
|
— | (3,000 | ) | — | — | (3,000 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net finance expense (income)
|
|
—
|
|
|
3,296
|
|
|
—
|
|
|
—
|
|
|
3,296
|
|
|||||
Interest expense
|
1,660 | (1,660 | ) | — | — | — | ||||||||||||||
Loss on discount related to conversion of promissory notes
|
4,636 | (4,636 | ) | — | — | — | ||||||||||||||
Gain on extinguishment of debt
|
(3,000 | ) | 3,000 | — | — | — | ||||||||||||||
Other expenses
|
250 | (250 | ) | — | — | — | ||||||||||||||
Gain on disposal of fixed assets
|
(15 | ) | 15 | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net other expense
|
3,531 | (3,531 | ) | — | — | — | ||||||||||||||
Income tax expense (benefit)
|
95 | (2 | ) | — | — | 93 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net Loss
|
|
(13,501
|
)
|
|
—
|
|
|
(56
|
)
|
|
(11
|
)
|
|
(13,568
|
)
|
Reclassifications and US GAAP to IFRS
Adjustments |
||||||||||||||||||||
(USD in thousands)
|
Higi
(US GAAP) |
Reclassifications
1 |
Leases
2 |
Share-based
Payments
3
|
Adjusted
Higi (IFRS) |
|||||||||||||||
As of June 30, 2021
|
||||||||||||||||||||
Non-Current
Assets
|
||||||||||||||||||||
Right of Use Asset
|
— | — | 1,233 | — | 1,233 | |||||||||||||||
Property and Equipment, net
|
114 | — | — | — | 114 | |||||||||||||||
Security deposits
|
66 | (66 | ) | — | — | — | ||||||||||||||
Other intangible assets, net
|
231 | — | — | — | 231 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total
non-current
assets
|
411 | (66 | ) | 1,233 | — | 1,578 | ||||||||||||||
— | ||||||||||||||||||||
Current Assets
|
||||||||||||||||||||
Other current assets
|
100 | (100 | ) | — | — | — | ||||||||||||||
Accounts receivable, net
|
2,374 | (2,374 | ) | — | — | — | ||||||||||||||
Trade and other receivables
|
— | 2,474 | — | — | 2,474 | |||||||||||||||
Prepayments and contract assets
|
318 | 66 | — | — | 384 | |||||||||||||||
Restricted cash
|
273 | — | — | — | 273 | |||||||||||||||
Cash and cash equivalents
|
5,458 | — | — | — | 5,458 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current assets
|
8,523 | 66 | — | — | 8,589 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets
|
|
8,934
|
|
|
—
|
|
|
1,233
|
|
|
—
|
|
|
10,167
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
— | ||||||||||||||||||||
Equity
|
||||||||||||||||||||
Common and Preferred Stock
|
6 | — | — | — | 6 | |||||||||||||||
Additional
paid-in
capital
|
89,194 | — | — | 3 | 89,197 | |||||||||||||||
Accumulated deficit
|
(90,574 | ) | — | (250 | ) | (3 | ) | (90,827 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total capital and reserves
|
(1,374 | ) | — | (250 | ) | — | (1,624 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities
|
||||||||||||||||||||
Non-current
liabilities
|
||||||||||||||||||||
Related party promissory notes
|
7,000 | — | — | — | 7,000 | |||||||||||||||
Deferred rent liability
|
284 | — | (284 | ) | — | — | ||||||||||||||
Deferred revenue
|
131 | (131 | ) | — | — | — | ||||||||||||||
Other long-term liabilities
|
100 | (100 | ) | — | — | — | ||||||||||||||
Lease liability
|
— | — | 1,435 | — | 1,435 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total long- term liabilities
|
7,515 | (231 | ) | 1,151 | — | 8,435 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Current Liabilities
|
||||||||||||||||||||
Accounts Payable
|
1,012 | (1,012 | ) | — | — | — | ||||||||||||||
Accrued Expenses
|
964 | (964 | ) | — | — | — | ||||||||||||||
Due to employees
|
8 | (8 | ) | — | — | — | ||||||||||||||
Trade and other payables
|
— | 1,012 | — | — | 1,012 | |||||||||||||||
Accruals and provisions
|
— | 1,072 | — | — | 1,072 | |||||||||||||||
Deferred revenue
|
809 | 131 | — | — | 940 | |||||||||||||||
Note Payable
|
— | — | — | — | — | |||||||||||||||
Lease liability, current portion
|
— | — | 332 | — | 332 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current liabilities
|
2,793 | 231 | 332 | — | 3,356 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and stockholders deficit
|
|
8,934
|
|
— |
|
1,233
|
|
|
—
|
|
|
10,167
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
1.) |
The classification of certain items presented by Higi under U.S. GAAP has been adjusted in order to align with the presentation of Babylon under IFRS.
|
• |
Presentation of Depreciation of Higi stations ($0.1 million) and Other cost of revenue ($6.7 million) in Research and development expenses ($6.8 million).
|
• |
Separate presentation of components of Operating expenses ($12.5 million) to Research and development expenses ($8.8 million) and Sales, general and administrative expenses ($3.7 million).
|
• |
Presentation of Interest expense ($1.7 million) and Loss on discount related to conversion of promissory notes ($4.6 million) to Finance costs ($6.3 million).
|
• |
Presentation of Gain on extinguishment of debt ($3.0 million) to Finance income ($3.0 million).
|
• |
Presentation of Other expenses ($0.2 million) in Sales, general & administrative expenses ($0.2 million).
|
• |
Presentation of Other cost of revenue ($3.6 million) in Research and development expenses ($3.6 million).
|
• |
Separate presentation of components of Operating expenses ($7.0 million) to Research and development expenses ($5.1 million) and Sales, general and administrative expenses ($1.9 million).
|
• |
Presentation of Interest expense ($0.6 million) to Finance costs ($0.6 million).
|
• |
Presentation of Forgiveness of paycheck protection program funds ($1.0 million) to Finance income ($1.0 million).
|
• |
Presentation of Accounts receivable, net ($2.4 million) and Other current assets ($0.1 million) in Trade and other receivables ($2.5 million).
|
• |
Presentation of Accounts Payable ($1.0 million) to Trade and other Payables ($1.0 million).
|
• |
Presentation of Accrued expenses ($1.0 million) to Accruals and provisions ($1.0 million).
|
2.) |
Higi has not adopted ASC 842, Leases, which becomes effective for private companies with fiscal years beginning after December 15, 2021. In accordance with IFRS 16, Leases¸ and Babylon’s accounting policies, right of use assets of $1.2 million and lease liabilities of $1.8 million have been recognized in the balance sheet as of June 30, 2021. In addition, accrued rent liabilities of $0.3 million have been derecognized from the balance sheet as of June 30, 2021. The impact of the adjustments to the statement of operations and deferred taxes was not material.
|
3.) |
Under U.S. GAAP, Higi elected to apply the straight-line approach for graded vesting when measuring share- based payment awards. Under IFRS, Babylon would use the graded vesting method, resulting in a higher proportion of cost being allocated to the earlier years. The impact of the adjustments to the statement of operations and deferred taxes was not material.
|
Preliminary Purchase Price Allocation (in 000s)
|
||||
Cash consideration
|
$ | 5,202 | ||
Shares issued as consideration
|
53,553 | |||
Fair value of existing equity interest
|
23,440 | |||
Additional consideration
|
11,565 | |||
|
|
|||
Total consideration transferred
|
|
93,760
|
|
|
Trade and other receivables
|
2,837 | |||
Prepayments and contract assets
|
294 | |||
Other intangible assets
|
31,837 | |||
Trade and other payables and Accruals and provisions
|
(2,303 | ) | ||
Other assets and liabilities, net
|
4,685 | |||
|
|
|||
Net Assets Acquired
|
|
37,350
|
|
|
Amount Allocated to Goodwill
|
$
|
56,410
|
|
(AA) |
Reflects the elimination of the previous investment related to Higi of $12.6 million and the step up to the fair value of prior existing equity interest of $23.4 million. This
step-up
in fair value resulted in a gain of $10.8 million.
|
(BB) |
To reflect the elimination of Higi’s historical equity.
|
(CC) |
To reflect the consideration payment in the form of $5.2 million in cash, shares issued as consideration with an estimated fair value of $53.6 million fair value of existing equity interest of $23.4 million and $11.6 million in deferred consideration, resulting in an addition of goodwill of $56.4 million and $53.6 million in additional paid capital.
|
(DD) |
To reflect the elimination of historical intangible assets of $0.2 million along with the fair value of the intangible assets acquired of $31.9 million along with its respective impact on Deferred Tax Liabilities of $6.1 million. This results in a reduction of the addition to goodwill by $25.8 million. Our preliminary estimate of the weighted average useful lives of the acquired intangible assets was determined to be 7.0 years based on the useful lives assigned to comparable historical acquisitions. The amortization of the intangible assets over a 7.0 year period resulted in an expense of $4.5 million and $2.3 million for the year ended December 31, 2020 and the six months ended June 30, 2021, respectively.
|
(EE) |
This adjustment is to reflect the payment of Higi’s debt using its cash on hand. If the cash on hand is not sufficient, part of the consideration transferred will be used to settle the Related party convertible notes at Closing. This results in a reduction in the cash balance of $5.5 million, elimination of $7.0 million of debt and a reduction of goodwill by $1.5 million.
|
• |
long-term outcomes;
|
• |
ease of use and convenience;
|
• |
price;
|
• |
greater name and brand recognition;
|
• |
longer operating histories;
|
• |
greater market penetration;
|
• |
larger and more established customer and channel partner relationships;
|
• |
larger sales forces and more established products and networks;
|
• |
larger marketing budgets;
|
• |
access to significantly greater financial, human, technical and other resources;
|
• |
breadth, depth, and efficacy of offerings;
|
• |
quality and reliability of solutions; and
|
• |
employer, healthcare provider, government agency and insurance carrier acceptance.
|
• |
the price, performance and functionality of our solutions;
|
• |
the availability, price, performance and functionality of competing solutions;
|
• |
our ability to develop and sell complementary applications and services;
|
• |
the stability, performance and security of our hosting infrastructure and hosting services;
|
• |
changes in healthcare and telemedicine laws, regulations or trends; and
|
• |
the business environment of our customers and, in particular, headcount reductions by our customers.
|
• |
market adoption and ongoing usage of telemedicine solutions, in particular following the removal of various “stay at home” restrictions due to the
COVID-19
pandemic;
|
• |
awareness and adoption of technology in healthcare generally;
|
• |
availability of products and services that compete with ours;
|
• |
ease of adoption and use;
|
• |
features and platform experience;
|
• |
performance;
|
• |
brand;
|
• |
security and privacy; and
|
• |
pricing.
|
• |
the health status of members and higher levels of hospitalization;
|
• |
higher than expected utilization of new or existing healthcare services or technologies, including the level of engagement with our digital healthcare platform and tools;
|
• |
an increase in the cost of healthcare services and supplies, whether as a result of inflation or otherwise;
|
• |
changes to mandated benefits or other changes in healthcare laws, regulations and practices;
|
• |
increased costs attributable to specialist physicians, hospitals and ancillary providers;
|
• |
changes in the demographics of our members;
|
• |
changes in medical trends;
|
• |
contractual or claims disputes with providers, hospitals or other service providers within and outside a health plan’s network;
|
• |
the occurrence of catastrophes, major epidemics or acts of terrorism; and
|
• |
the reduction of health plan premiums.
|
• |
the transaction involves both current products and products that are under development;
|
• |
the customer requires significant modifications, configurations, or complex interfaces that could delay delivery or acceptance of our solution;
|
• |
we are unable to demonstrate adequate control of the care management services being provided to our customers due to regulatory requirements or other contractual provisions;
|
• |
the transaction involves acceptance criteria or other terms that may delay revenue recognition; or
|
• |
the transaction involves payment terms that depend upon contingencies.
|
• |
our ability to promptly transition our employees from completed projects to new assignments and to hire and integrate new employees;
|
• |
our ability to forecast demand for our services and thereby maintain an appropriate number of employees in each of our delivery locations;
|
• |
our ability to deploy employees with appropriate skills and seniority to projects;
|
• |
our ability to manage the attrition of our employees; and
|
• |
our need to devote time and resources to training, professional development and other activities that cannot be billed to our customers.
|
• |
the addition or loss of customers;
|
• |
customer renewal rates and the timing and terms of customer renewals;
|
• |
changes in our sales and implementation cycles, especially in the case of our large customers;
|
• |
changes in our pricing or fee policies or those of our competitors;
|
• |
the timing of recognition of revenue;
|
• |
our ability to successfully expand our business, whether domestically or internationally, and to introduce new services and solutions;
|
• |
the amount and timing of operating expenses, including those related to the maintenance and expansion of our business, operations and infrastructure, including upfront capital expenditures and other costs related to expanding in existing markets or entering new markets, as well as providing administrative and operational services to our physician owned entity partners;
|
• |
network or service outages, internet disruptions, the availability of our platforms, security breaches or perceived security breaches;
|
• |
our ability to effectively manage the size and composition of our network of healthcare professionals relative to the level of demand for services from our customers’ members and patients;
|
• |
changes in our business strategies and pricing policies (or those of our competitors);
|
• |
the timing and success of our entry into new markets or introductions of new or enhanced platforms or solutions by us or our competitors, including disruptive technology, or any other change in the competitive dynamics of our industry, including consolidation or new entrants among competitors, market participants or strategic alliances;
|
• |
new, or changes to existing, regulations that limit or affect our platforms, solutions and technologies or which increase our regulatory compliance costs, including with respect to privacy or data protection;
|
• |
the cost and potential outcomes of ongoing or future regulatory investigations or examinations, or enforcement by government regulators, including fines, orders or consent decrees, or of future litigation;
|
• |
general economic, political, social, industry and market conditions;
|
• |
duration and severity of pandemics, epidemics, contageious diseases, flu and the like; and
|
• |
the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies.
|
• |
local economic, political and social conditions, including the possibility of economic slowdowns, hyperinflationary conditions, political instability, social unrest or outbreaks of pandemic or contagious diseases, such as Ebola, Zika, avian flu, severe acute respiratory syndrome (SARS), H1N1 (swine flu), the disease caused by the
SARS-CoV-2
(COVID-19),
and Middle East Respiratory Syndrome (MERS);
|
• |
multiple, conflicting and changing laws and regulations such as tax laws, privacy and data protection laws and regulations, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses;
|
• |
obtaining regulatory approvals or clearances where required for the sale of our solution and services in various countries;
|
• |
requirements to maintain data and the processing of that data on servers located within the United States or in other such countries we may operate in;
|
• |
protecting and enforcing our intellectual property rights;
|
• |
complexities associated with managing multiple payer reimbursement regimes and government payers;
|
• |
competition from companies with significant market share in our market, with greater resources than we have and with a better understanding of user preferences;
|
• |
financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the effect of local and regional financial pressures on demand and payment for our products and services and exposure to foreign currency exchange rate fluctuations;
|
• |
the inability to manage and coordinate the various legal and regulatory requirements of multiple jurisdictions that are constantly evolving and subject to change;
|
• |
actual or threatened trade war, including between the United States and China, or other governmental action related to tariffs, international trade agreements or trade policies;
|
• |
currency exchange rate fluctuations, changes in currency policies or practices and restrictions on currency conversion;
|
• |
limitations or restrictions on the repatriation or other transfer of funds;
|
• |
the inability to enforce agreements, collect payments or seek recourse under or comply with differing commercial laws;
|
• |
natural disasters, political and economic instability, including wars, terrorism, political unrest, outbreak of disease, boycotts, curtailment of trade, and other market restrictions; and
|
• |
managing the potential conflicts between locally accepted business practices and our obligations to comply with laws and regulations, including anti-corruption and anti-money laundering laws and regulations.
|
• |
inability to integrate or benefit from acquired technologies or services in a profitable manner;
|
• |
unanticipated costs or liabilities, including legal liabilities, associated with the acquisition;
|
• |
difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;
|
• |
difficulty converting the customers of the acquired business into our current and future offerings and contract terms, including disparities in the revenue model of the acquired company;
|
• |
diversion of management’s attention or resources from other business concerns;
|
• |
adverse effects on our existing business relationships with customers, members, or strategic partners as a result of the acquisition;
|
• |
complexities associated with managing the geographic separation of the combined businesses and consolidating multiple physical locations;
|
• |
the potential loss of key employees;
|
• |
acquisition targets not having as robust internal controls over financial reporting as would be expected of a public company;
|
• |
us becoming subject to new regulations as a result of an acquisition, including if we acquire a business serving customers in a regulated industry or acquire a business with customers or operations in a country in which we do not already operate;
|
• |
possible cash flow interruption or loss of revenue as a result of transitional matters; and
|
• |
use of substantial portions of our available cash to consummate the acquisition.
|
• |
the federal physician self-referral law, commonly referred to as the Stark Law, that, subject to limited exceptions, prohibits physicians from referring Medicare or Medicaid patients to an entity for the provision of certain “designated health services” if the physician or a member of such physician’s immediate family has a direct or indirect financial relationship (including an ownership interest or a compensation arrangement) with the entity, and prohibit the entity from billing Medicare or Medicaid for such designated health services;
|
• |
the federal Anti-Kickback Statute that prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration (i) in return for referring or to induce the referral of an individual for the furnishing, or arranging for the furnishing, of items or services paid for in whole or in part by any federal health care program, such as Medicare and Medicaid, and (ii) ordering, leasing, purchasing or recommending or arranging for the ordering, purchasing or leasing of items, services, good, or facility paid for in whole or in part by any federal health care program, such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;
|
• |
the criminal healthcare fraud provisions of HIPAA and related rules that prohibit knowingly and willfully executing a scheme or artifice to defraud any healthcare benefit program or falsifying, concealing or covering up a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;
|
• |
the federal False Claims Act that imposes civil liability on individuals or entities that, among other things, knowingly submit false or fraudulent claims for payment to the government, or knowingly make, or cause to be made, a false statement in order to have a false claim paid, or retain identified Medicare or Medicaid overpayments and allows for qui tam or whistleblower suits by private individuals on behalf of the government;
|
• |
various federal healthcare-focused criminal laws that impose criminal liability for intentionally submitting false or fraudulent claims, or making false statements, to the government;
|
• |
reassignment of payment rules that prohibit certain types of billing and collection practices in connection with claims payable by the Medicare or Medicaid programs;
|
• |
similar state law provisions pertaining to anti-kickback, self-referral and false claims issues, some of which may apply to items or services reimbursed by any payer, including patients and commercial insurers;
|
• |
state laws that prohibit general business corporations, such as us, from practicing medicine, controlling physicians’ medical decisions or engaging in some practices such as splitting fees with physicians;
|
• |
state laws, regulations, interpretative guidance, and policies requiring certain modality and other actions to establish a provider-patient relationship, deliver care, or prescribe medications as part of a telehealth service;
|
• |
state laws, regulations and policies relating to licensure and the practice of telehealth services across state lines;
|
• |
state laws, regulations, interpretative guidance, and policies regarding the dispensing or delivery of medications and devices;
|
• |
state laws, regulations, interpretative guidance, and policies regarding reporting requirements and patient consent, education, and
follow-up
related to treatment, including treatment and education for certain specific topics, such as, contraception, HIV and other STIs and state reporting for HIV, STIs, and infectious diseases;
|
• |
laws that regulate debt collection practices as applied to our debt collection practices;
|
• |
a provision of the Social Security Act that imposes penalties on healthcare providers who fail to disclose, or refund known overpayments;
|
• |
federal and state laws that prohibit providers from billing and receiving payment from Medicare and Medicaid for services unless the services are medically necessary, adequately and accurately documented, and billed using codes that accurately reflect the type and level of services rendered; and
|
• |
federal and state laws and policies that require healthcare providers to maintain licensure, certification or accreditation to enroll and participate in the Medicare and Medicaid programs, to report certain changes in their operations to the agencies that administer these programs.
|
• |
rules governing the practice of medicine by physicians;
|
• |
laws relating to licensure requirements for physicians and other licensed health professionals;
|
• |
laws limiting the corporate practice of medicine and professional
fee-splitting;
|
• |
laws governing the issuances of prescriptions in an online setting;
|
• |
cybersecurity and privacy laws;
|
• |
laws and licensure requirements relating to telemedicine;
|
• |
laws and regulatory requirements relating to artificial intelligence (which are likely to become more prominent across multiple jurisdictions in the coming years, following the European Commission’s recently announced proposal for an EU Regulation on Artificial Intelligence);
|
• |
laws and regulatory requirements relating to medical devices including software as a medical device, under English law, EU law and the Federal Food, Drug, and Cosmetic Act and the U.S. Food & Drug Administration’s enforcement discretion relating to “device” regulatory requirements;
|
• |
laws and regulations relating to the manner in which we provide and bill for services and collect reimbursement from governmental programs and private payers (e.g., the physician self-referral law or Anti-Kickback Statute);
|
• |
laws and regulations related to the acceptance of risk for medical expenses; and
|
• |
laws and rules relating to the distinction between independent contractors and employees. There could be laws and regulations applicable to our business that we have not identified or that, if changed, may be costly to us, and we cannot predict all the ways in which implementation of such laws and regulations may affect us.
|
• |
On April 21, 2021, the European Commission published its proposal for an EU Regulation on AI (the “Draft Regulation”). The Draft Regulation is not current EU law. It will proceed through a detailed legislative process (which is expected to take several years) and, if enacted, will also provide for a transition period to enable affected parties to comply. As with previous EU legislation relating to technology (such as the GDPR), it is likely that the final text will be significantly different from the Draft Regulation.
|
• |
The Draft Regulation applies to providers, users, importers and distributors of AI systems. It establishes a risk-based framework of requirements and enforcement mechanisms for various AI
use-cases.
This includes “high-risk” AI systems, which (among other criteria) encompass products or components that are subject to Regulation (EU) 2017/745 on medical devices.
|
• |
The Draft Regulation, if enacted, would have extra-territorial effect and would apply to:
|
○
|
providers (established within or outside the EU) that supply or put an AI system into service in the EU;
|
○
|
users of AI systems located within the EU; and
|
○
|
providers and users located outside the EU, if the output produced by the AI system is used in the EU.
|
• |
Our mobile app (including our
AI-driven
digital health tools, Triage and Healthcheck) is currently available for download within the EU. We could be determined to be a provider, given that it develops the app and puts it onto the market.
|
• |
If we were determined to be a provider of high-risk AI systems, our substantive obligations would include (among other measures) implementation of compliant risk-management and data governance systems, creation and maintenance of technical documentation, record-keeping requirements, detailed transparency
|
obligations and post-market monitoring. Although we have many of these in place already, the specific requirements may vary. The Draft Regulation also requires high-risk AI systems to be
CE-
marked following a conformity assessment procedure. These measures could create additional costs (e.g. additional hires for product and compliance teams) and potential delays in the development and deployment of our
AI-based
products and services within the EU. If we fail to comply, we may be subject to fines or other penalties.
|
• |
Certain obligations in the Draft Regulation apply to users of high-risk AI systems, which could include our commercial partners and licensees. A user is any entity or person under whose authority a provider’s AI system is operated (rather than a human
end-user).
These obligations include ensuring input data is relevant for the intended purpose, monitoring the operation of the AI system and keeping logs generated by the system. As a result, we may be required to implement additional operational procedures and contractual protections (with potentially negative impacts on commercial partnership and licensing revenues) to enable our partners and licensees to comply with their own obligations when using our AI.
|
• |
If we were not determined to be a provider of high-risk AI systems, we could still be required to adhere to certain transparency standards under the Draft Regulation.
|
• |
The Draft Regulation would not be part of UK law in light of Brexit. However, it would apply indirectly to parties in the UK through the extra-territorial effect detailed above (i.e.,
UK-based
providers/users would need to comply if supplying or using AI systems, or their output, within the EU). Our mobile app is currently available for download in the EU. On September 22, 2021, the UK government published a national AI strategy, setting out a
ten-year
plan to invest in the UK’s AI ecosystem, transition the UK to an
AI-enabled
economy, and focus on national and international governance of AI technologies. Given the recent publication of this strategy, we are in the process of assessing its potential impact on our business.
|
• |
Policy and legislative developments in the United States over the past two years suggest a greater focus on the regulation of AI, with a particular emphasis on algorithmic accountability and mitigation of algorithmic bias/discrimination.
|
• |
The Executive Order on Maintaining American Leadership in Artificial Intelligence (No. 13,859) (issued on February 11, 2019), included a guiding principle of “fostering public trust and confidence in AI technologies”. House Resolution 153 on Supporting the Development of Guidelines for Ethical Development of Artificial Intelligence (issued by the U.S. House of Representatives on February 27, 2019 but not yet adopted) sets out aims for the “safe, responsible and democratic development” of AI, through principles such as transparency, privacy, accountability, access, fairness and safety.
|
• |
The most significant legislative development was the introduction in Congress of the bill for the federal Algorithmic Accountability Act on April 10, 2019 (the “Bill”), which would require independent impact assessments to be conducted on “high-risk automated decision systems” to assess their accuracy, fairness, bias, discrimination, privacy and security, where the relevant organization meets certain threshold criteria (based on revenue, volume of data held, or the sale/purchase of personal information). The Bill did not advance in 2019, but there are indications that it will be reintroduced in the U.S. Senate and the U.S. House of Representatives in 2021.
|
• |
If enacted and if applicable to us, the Bill’s requirement to carry out detailed impact assessments could create additional costs (including additional hires for compliance teams) and delays in our engineering and product development processes. The Bill would also not prevent the introduction of further legislation at state level which might, if applicable, impose additional (potentially separate or overlapping) requirements on Babylon. An early example is the bill for the New Jersey Algorithmic Accountability Act (introduced on May 20, 2019), which is similar in scope and effect to the Bill and is still moving through the New Jersey legislative process.
|
• |
damage from fire, power loss, natural disasters and other force majeure events outside our control;
|
• |
communications failures;
|
• |
software and hardware errors, failures, and crashes;
|
• |
security breaches and incidents, computer viruses, hacking,
denial-of-service
|
• |
other potential interruptions.
|
• |
price and volume fluctuations in the overall stock market from time to time;
|
• |
volatility in the market prices and trading volumes of technology and healthcare company stocks;
|
• |
changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;
|
• |
sales of our Class A Ordinary Shares by us or our shareholders;
|
• |
failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;
|
• |
the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections;
|
• |
announcements by us or our competitors of new products or contracts;
|
• |
the public’s reaction to our press releases, other public announcements, and filings with the SEC;
|
• |
changes in how customers perceive the benefits of our products and services, and future product offerings;
|
• |
changes in the structure of healthcare payment systems;
|
• |
rumors and market speculation involving us or other companies in our industry;
|
• |
actual or anticipated changes in our results of operations or fluctuations in our results of operations;
|
• |
actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally;
|
• |
litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors;
|
• |
developments or disputes concerning our intellectual property or other proprietary rights;
|
• |
any significant data breach involving our products, services or site or data stored by us or on our behalf;
|
• |
announced or completed acquisitions of businesses, commercial relationships, products, services, or technologies by us or our competitors;
|
• |
new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
|
• |
changes in accounting standards, policies, guidelines, interpretations, or principles;
|
• |
any adverse consequences related to our dual-class capital structure, such as stock index providers excluding companies with dual-class capital structures from certain indices;
|
• |
any significant change in our management; and
|
• |
general economic conditions and slow or negative growth of our markets.
|
• |
the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form
10-Q
or current reports on Form
8-K;
|
• |
the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and
|
• |
the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time.
|
• |
the requirement that a majority of its board of directors consist of independent directors;
|
• |
the requirement that its nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
|
• |
the requirement that its compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
|
• |
our future financial and operating results; including trends and expectations;
|
• |
the growth of our business and organization;
|
• |
our failure to compete successfully;
|
• |
our dependence on our relationships with physician-owned entities to hold contracts and provide healthcare services;
|
• |
our telemedicine business and growth strategy depend on its ability to maintain and expand a network of qualified providers;
|
• |
our ability to attract new customers and expand member enrollment with existing clinical services and Babylon 360 customers, particularly to achieve its pipeline projections;
|
• |
our ability to retain existing customers and existing customers’ willingness to license additional applications and services from us;
|
• |
a significant portion of our revenue comes from a limited number of customers;
|
• |
the recognition of a portion of our revenue is subject to the achievement of performance metrics and healthcare cost savings and may not be representative of revenue for future periods;
|
• |
the significant risks associated with estimating the amount of revenue that we recognize under our value-based care agreements with health plans;
|
• |
we may be required to delay recognition of some of our revenue;
|
• |
our sales and implementation cycle can be long and unpredictable and requires considerable time and expense;
|
• |
our records and submissions to a health plan may contain inaccurate or unsupportable information regarding risk adjustment scores of members;
|
• |
the impact on our business of reductions in reimbursement rates paid by third-party payers or federal or state healthcare programs or other restraints on our ability to obtain or provide services to our members;
|
• |
the risk that the market for telemedicine does not develop or develops more slowly than we expect;
|
• |
the risk that our solutions do not drive member engagement;
|
• |
our ability to develop and release new solutions and services, or successful enhancements, new features and modifications to our existing solutions and services;
|
• |
our proprietary solutions may not operate properly;
|
• |
our products may not effectively interoperate with our customers’ existing and future infrastructures;
|
• |
our relatively limited operating history makes it difficult to evaluate our current business and future prospects;
|
• |
our ability to hire, integrate, develop, motivate and retain highly qualified personnel;
|
• |
our quarterly results may fluctuate significantly, which could adversely impact the market price of our ordinary shares;
|
• |
risks associated with our international operations;
|
• |
economic uncertainty or downturns, could adversely affect our business and operating results;
|
• |
our failure to adequately expand our direct sales force;
|
• |
our ability to successfully integrate any acquisition or to realize benefits from any strategic alliances, partnerships or joint ventures;
|
• |
risks associated with our use of open source software;
|
• |
the disruption of our business by catastrophic events and
man-made
problems, such as power disruptions, data security breaches and incidents, and terrorism;
|
• |
our failure to offer high-quality implementation, member enrollment and ongoing support;
|
• |
the impact of
COVID-19
or any other pandemic, epidemic or outbreak of an infectious disease in the United States or worldwide, including the
COVID-19
pandemic on our business; and
|
• |
the other matters described in the section titled “
Risk Factors
|
• |
financial institutions or financial services entities;
|
• |
broker-dealers;
|
• |
taxpayers that are subject to the
mark-to-market
|
• |
persons required to accelerate the recognition of any item of gross income with respect to our Class A ordinary shares as a result of such income being recognized on an applicable financial statement;
|
• |
tax-exempt
entities;
|
• |
governments or agencies or instrumentalities thereof;
|
• |
insurance companies;
|
• |
mutual funds;
|
• |
pension plans;
|
• |
regulated investment companies or real estate investment trusts;
|
• |
partnerships (including entities or arrangements treated as partnerships for U.S. federal income tax purposes);
|
• |
U.S. expatriates or former long-term residents of the United States;
|
• |
persons that actually or constructively own five percent or more (by vote or value) of our capital stock;
|
• |
S corporations;
|
• |
trusts and estates;
|
• |
persons that acquired their Class A ordinary shares pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation;
|
• |
persons that hold Class A ordinary shares as part of a straddle, constructive sale, constructive ownership transaction, hedging, wash sale, synthetic security, conversion or other integrated or similar transaction;
|
• |
U.S. Holders (as defined below) whose functional currency is not the U.S. dollar; or
|
• |
“specified foreign corporations” (including “controlled foreign corporations”), “passive foreign investment companies” or corporations that accumulate earnings to avoid U.S. federal income tax.
|
• |
an individual who is a citizen or resident of the United States;
|
• |
a corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States or any state thereof or the District of Columbia;
|
• |
an estate whose income is subject to U.S. federal income tax regardless of its source; or
|
• |
a trust if (1) a U.S. court can exercise primary supervision over the administration of such trust and one or more United States persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a United States person.
|
• |
the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for our Class A ordinary shares;
|
• |
the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of our first taxable year in which we are a PFIC, will be taxed as ordinary income;
|
• |
the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder without regard to the U.S. Holder’s other items of income and loss for such year; and
|
• |
an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder with respect to the tax attributable to each such other taxable year of the U.S. Holder.
|
• |
a
non-resident
alien individual, other than certain former citizens and residents of the United States subject to U.S. tax as expatriates;
|
• |
a foreign corporation; or
|
• |
an estate or trust that is not a U.S. Holder.
|
(i) |
the gain is effectively connected with the conduct of a trade or business of the
Non-U.S.
Holder in the United States, and, if provided in an applicable income tax treaty, is attributable to a “permanent establishment” or a “fixed base” maintained by the
Non-U.S.
Holder in the United States; or
|
(ii) |
the
Non-U.S.
Holder is an individual who is treated as present in the United States for 183 days or more during the taxable year of disposition and certain other conditions are met, in which case such gain (which gain may be offset by certain U.S.-source losses) generally will be taxed at a 30% rate (or lower applicable treaty rate).
|
1
|
While we have demonstrated the cost savings and reduction of emergency visit in these sample studies, there is no guarantee we will be able to replicate this in the future.$(146.2) million and $(152.4) million for the years ended December 31, 2020 and 2019, respectively. Our loss was $75.7 million and $90.8 million, our EBITDA was $(62.7) million and $(78.9) million and our Adjusted EBITDA was $(54.2) million and $(76.2) million for the six months ended June 30, 2021 and 2020, respectively. For a description of how we calculate EBITDA and Adjusted EBITDA and the limitations of these
non-IFRS
financial measures, see “—
Key Business and Financial Metrics— EBITDA and Adjusted EBITDA
|
• |
Accessibility.
|
• |
Affordability.
low-income
adults reported having unmet care needs due to cost.
|
• |
Quality.
low-
and middle- income countries, between 5.7 and 8.4 million deaths each year (representing up to 15% of overall deaths in such countries) are attributed to poor quality care. The inadequacy of traditional healthcare has not gone unnoticed by individuals, especially those of younger generations: according to a 2019 Accenture report, 32% of Gen Z respondents reported being “dissatisfied” and “extremely dissatisfied” with the effectiveness of treatment provided by traditional healthcare services. Across age groups, the United States ranks low compared to other
G-7
countries, with only a 30% satisfaction rating among healthcare participants. Efforts to address the challenges have led to important innovations in the healthcare industry; however, we believe they continue to have inherent limitations.
|
• |
Digital Transformation of Healthcare.
COVID-19
pandemic as it has demonstrated its benefit and importance in reaching patients. According to McKinsey,
COVID-19
has caused a massive acceleration in use of telehealth. Consumer adoption has skyrocketed, from 11% of U.S.
|
consumers using telehealth in 2019 to 76% of survey respondents in May 2020 interested in using telehealth going forward. In the
post-COVID-19
world, we believe this trend will continue due to the inherent structural benefits of virtual delivery of healthcare, including convenience and efficiency. However, we believe that in an effort to address resource scarcity, existing digital tools, including telemedicine consultations, are simply shifting the site of care, without addressing the fundamental issues of when and how care is provided.
|
• |
Emergence of New Payment Models.
for
|
• |
Accessibility
|
• |
Affordability.
Business— Overview
|
• |
Quality.
|
• |
When in good health
|
• |
If members get sick,
|
• |
Extensive
follow-up
care
follow-up
self-care to improve overall member outcomes and ensure that members maintain their health in the best state possible.
|
• |
Purpose-Built, Tech-Enabled
&
AI-Powered.
end-to-end
|
has been our strategy from the outset and is intrinsically built into our care delivery solutions, in contrast to other care providers that have bolted technology capabilities onto a traditional care delivery model. We have heavily invested in our technology as well as in our team of highly experienced researchers, scientists and engineers since our founding in 2013, which we believe gives us a significant advantage over other care providers and will continue to progress our capabilities. We are also able to license our technology to third parties. Our AI and automation reduce the human capital intensity of providing healthcare, while seeking to improve the quality of decision making and health outcomes, offering:
|
• |
Evidence-based insights, whole person care, and lifestyle and behavioral risk benchmarking for over 30 common diseases;
|
• |
A cloud-based, integrated self-care and clinical services platform, which allows us to deliver convenient, continuous and scalable care globally; and
|
• |
Integrated technology and virtual clinical operations, which automate low value tasks, allowing the focus to be on high value interactions and drive more efficiency than a normal physical primary care operation.
|
• |
Proven
& Highly-Scalable Care Delivery Model.
on-demand
24/7 care through our digital platform while leveraging existing, local healthcare infrastructure in markets where our affiliated providers deliver care. This is evidenced by the rapid
go-to-market
end-to-end
bricks-and-mortar-first
|
(1) |
Sourced from public filings unless otherwise stated. ONEM, OSH, and TDOC reflect FY20 revenue divided by the average of the current and prior year lives covered. TDOC FY20 Revenue pro forma for acquisitions. LVGO reflects FY19 revenue divided by average of FY19 and FY18 covered lives under diabetes management. ACCD reflects LTM revenue as of Q3 2020 divided by the average of Q3 2020 lives covered and lives covered in the
S-1
as of December 2019. AMWL reflects FY20 revenue divided by current lives covered. Babylon reflects estimated revenue per life based on active Babylon VBC contracts.
|
(2) |
Scalability is defined as the sum of revenue CAGR from 2020A to 2022E and gross profit percentage in 2022E. 2022E peer data was sourced from Factset and Capital IQ consensus estimates as of May 7, 2021, except Livongo Health FY20 and FY22 forecasts were based on Factset consensus estimates as of August 4, 2020, which was one day prior to Teladoc acquisition announcement. Teladoc’s FY20 Revenue was obtained from its pro forma financials for acquisitions. Babylon’s financials were based on management estimates consistent with the forecasts provided to Alkuri. This high level of scalability does, however, require that we balance our growth against the management, operational and financial resources needed to enter new markets.
|
• |
Proactively Delivering Mobile-Native Care to Members.
Low-risk
members are provided with resources for self-help and education about general wellness. This is automated profiling of an individual (as defined in UK privacy law) and this requires careful considerations as it involves health data.
|
• |
Deep Experience in Value-Based Care.
in-person
care when needed. With the goal of providing a complete solution, our VBC solution manages the totality of a member’s healthcare, including taking on full financial responsibility for costs ranging from primary through to secondary and tertiary care settings (with total risk capped through reinsurance products). By significantly improving accessibility and availability of primary and urgent care, we believe it is possible to create significant downstream savings. Delivery of our solution in the United Kingdom, for example, has demonstrated that up to 35% downstream cost savings are possible. For a description of the study done on our solution, see “
Business—Overview
|
• |
Expand covered population and scope of services in existing markets.
run-rate
revenue (“ARR”). This is demonstrated by the increase in ARR as of July 31, 2021 to approximately $323 million as a result of the contract which became effective July 1, 2021 from approximately $170 million and $273 million as of December 31, 2020 and June 30, 2021, respectively. We continue to demonstrate that our offerings are attractive and cost-saving for payers. In our partnership with the NHS, we have saved up to 35% of hospital costs, while delivering high-quality healthcare to members. For a description of the study done on our solution, see “
Business— Overview
|
several customers have upgraded their contracts from initially planned clinical services provision to Babylon 360 contracts.
|
• |
Expand to new markets with new and existing customers.
|
• |
Pursue strategic partnerships and acquisitions.
FDA-cleared
Smart Health stations in retail chains such as Sam’s Club, Kroger, Rite Aid, and Publix, among others, with 73% of the U.S. population living within five miles of a Higi station.
|
• |
Continuing to invest our technology to improve our care capabilities.
|
• |
Proprietary.
|
• |
Cloud Architecture.
|
• |
Integration.
HL7-FHIR
(Fast Healthcare Interoperability Resources) approach, we are able to ingest, process and store data from a wide variety of sources, creating a unified view of our members (while ensuring this is in compliance with UK privacy laws).
|
• |
Widely Accessible.
front-end
technology through both web and smartphone applications. At the same time, we serve individuals with basic flip phones through a proprietary application in developing countries such as Rwanda, facilitating our mission of delivering affordable and accessible healthcare to all.
|
• |
Optimizes Back Office Efficiency.
non-clinical
tasks such as processing referrals and prescription management, reducing providers’ administrative burden and increasing their operational efficiency. This platform approach allows us to leverage our data and AI strategy to deliver these “back office” workflow services, driving additional value for our members by mitigating friction and delays, which individuals typically face in traditional healthcare delivery models.
|
• |
Addressing Healthcare Inequalities
|
• |
Talent Attraction, Engagement and Retention.
bi-annual
performance reviews and career pathway mapping.
|
• |
Diversity and Inclusion
al-Fitr,
Diwali, Christmas and others. Our DEI engagement scores have demonstrated our efforts are working, with our most recent score being 8.2 out of 10.
|
• |
Data Privacy and Cybersecurity
|
• |
Ethical Conduct
|
• |
Board Oversight of ESG
|
• |
the federal physician self-referral law, commonly referred to as the Stark Law, that, subject to limited exceptions, prohibits physicians from referring Medicare or Medicaid patients to an entity for the provision of certain “designated health services” if the physician or a member of such physician’s immediate family has a direct or indirect financial relationship (including an ownership interest or a compensation arrangement) with the entity, and prohibit the entity from billing Medicare or Medicaid for such designated health services;
|
• |
the federal Anti-Kickback Statute that prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration (i) in return for referring or to induce the referral of an individual for the furnishing, or arranging for the furnishing, of items or services paid for in whole or in part by any federal health care program, such as Medicare and Medicaid, and (ii) ordering, leasing, purchasing or recommending or arranging for the ordering, purchasing or leasing of items, services, good, or facility paid for in whole or in part by any federal health care program, such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;
|
• |
the criminal healthcare fraud provisions of HITECH, HIPAA, and related rules that prohibit knowingly and willfully executing a scheme or artifice to defraud any healthcare benefit program or falsifying, concealing or covering up a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti- Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;
|
• |
the federal False Claims Act that imposes civil liability on individuals or entities that, among other things, knowingly submit false or fraudulent claims for payment to the government, or knowingly making, or causing to be made, a false statement in order to have a false claim paid, or retain identified Medicare or Medicaid overpayments, and allows for qui tam or whistleblower suits by private individuals on behalf of the government;
|
• |
various federal healthcare-focused criminal laws that impose criminal liability for intentionally submitting false or fraudulent claims, or making false statements, to the government;
|
• |
reassignment of payment rules that prohibit certain types of billing and collection practices in connection with claims payable by the Medicare or Medicaid programs;
|
• |
similar state law provisions pertaining to anti-kickback, self-referral and false claims issues, some of which may apply to items or services reimbursed by any payer, including patients and commercial insurers;
|
• |
state laws that prohibit general business corporations, such as us, from practicing medicine, controlling physicians’ medical decisions or engaging in some practices such as splitting fees with physicians;
|
• |
state laws, regulations, interpretative guidance, and policies requiring certain modality and other actions to establish a provider-patient relationship, deliver care, or prescribe medications as part of a telehealth service;
|
• |
state laws, regulations and policies relating to licensure and the practice of telehealth services across state lines;
|
• |
state laws, regulations, interpretative guidance, and policies regarding the dispensing or delivery of medications and devices;
|
• |
state laws, regulations, interpretative guidance, and policies regarding reporting requirements and patient consent, education, and
follow-up
related to treatment, including treatment and education for certain specific topics, such as, contraception, HIV and other STIs and state reporting for HIV, STI, and infectious diseases;
|
• |
laws that regulate debt collection practices as applied to our debt collection practices;
|
• |
a provision of the Social Security Act that imposes penalties on healthcare providers who fail to disclose, or refund known overpayments;
|
• |
federal and state laws that prohibit providers from billing and receiving payment from Medicare and Medicaid for services unless the services are medically necessary, adequately and accurately documented, and billed using codes that accurately reflect the type and level of services rendered; and
|
• |
federal and state laws and policies that require healthcare providers to maintain licensure, certification or accreditation to enroll and participate in the Medicare and Medicaid programs, to report certain changes in their operations to the agencies that administer these programs.
|
• |
issuing requirement notices or warning notices to set out what improvements a provider must make;
|
• |
making changes to a provider’s registration to limit what they may do;
|
• |
issuing cautions or fines; and/or
|
• |
prosecuting cases where people are harmed or placed in danger of harm.
|
• |
a historical basis for Babylon Holdings Limited; and
|
• |
an adjusted basis, after giving effect to the Business Combination, PIPE financing, estimated cash consideration transferred in connection with the acquisition of Higi of $11.2 million and cash proceeds, net of discount and debt issuance costs, from $200 million in unsecured Notes issued to AlbaCore Capital LLP and affiliates.
|
As of September 30, 2021
|
||||||||
(in thousands)
|
Actual
(Unaudited)
|
As Adjusted
(Unaudited)
|
||||||
Cash
|
$ | 37,132 | $ | 357,222 | ||||
Indebtedness
|
47,764 | 185,000 | ||||||
Equity
|
||||||||
Share Capital
|
14 | 14 | ||||||
Share Premium
|
557,569 | 860,454 | ||||||
Share based payment reserve
|
52,861 | 52,861 | ||||||
Retained earnings
|
(609,658 | ) | (718,487 | ) | ||||
Foreign currency translation and non-controlling interests
|
(1,325 | ) | (1,325 | ) | ||||
|
|
|
|
|||||
Total Equity
|
(539 | ) | 193,517 | |||||
|
|
|
|
|||||
Total Capitalization
|
$
|
47,225
|
|
$
|
378,517
|
|
||
|
|
|
|
(amounts in thousands unless otherwise indicated)
|
For the
Six Months Ended June 30, |
For the
Year Ended December 31, |
||||||||||||||
2021
|
2020
|
2020
|
2019
|
|||||||||||||
Revenue:
|
||||||||||||||||
License fees revenue
|
$ | 44,245 | $ | 10,354 | $ | 24,603 | $ | 2,002 | ||||||||
Clinical services revenue
|
18,134 | 12,149 | 28,631 | 14,032 | ||||||||||||
Value-based care revenue
|
66,392 | — | 26,038 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenue
|
128,771 | 22,503 | 79,272 | 16,034 | ||||||||||||
Cost of care delivery
|
(92,137 | ) | (18,820 | ) | (67,254 | ) | (19,810 | ) | ||||||||
Platform & application expenses
|
(21,377 | ) | (12,898 | ) | (48,664 | ) | (16,948 | ) | ||||||||
Research & development expenses
|
(17,201 | ) | (20,881 | ) | (35,524 | ) | (51,205 | ) | ||||||||
Sales, general & administrative expenses
|
(76,606 | ) | (52,762 | ) | (103,341 | ) | (90,891 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss
|
(78,550 | ) | (82,858 | ) | (175,511 | ) | (162,820 | ) | ||||||||
Finance costs
|
(2,243 | ) | (2,569 | ) | (4,530 | ) | (1,116 | ) | ||||||||
Finance income
|
28 | 6 | 610 | 1,015 | ||||||||||||
Exchange (loss) / gain
|
(91 | ) | (2,146 | ) | (2,836 | ) | 17,075 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net finance (expense) income
|
(2,306 | ) | (4,709 | ) | (6,756 | ) | 16,974 | |||||||||
Gain on sale of subsidiary
|
3,917 | — | — | — | ||||||||||||
Share of loss of equity-accounted investees
|
(1,276 | ) | (309 | ) | (1,124 | ) | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before taxation
|
(78,215 | ) | (87,876 | ) | (183,391 | ) | (145,846 | ) | ||||||||
Tax (provision)/ benefit on loss
|
2,493 | (2,937 | ) | (4,639 | ) | 5,559 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss for the financial year
|
(75,722 | ) | (90,813 | ) | $ | (188,030 | ) | $ | (140,287 | ) | ||||||
|
|
|
|
|
|
|
|
(amounts in thousands unless otherwise indicated)
|
June 30,
|
December 31,
|
||||||||||
2021
|
2020
|
2019
|
||||||||||
Cash and cash equivalents
|
$ | 42,381 | $ | 101,757 | $ | 214,888 | ||||||
Working capital
(1)
|
(1,323 | ) | 5,665 | 191,432 | ||||||||
Total assets
|
242,587 | 238,814 | 288,834 | |||||||||
Total liabilities
|
184,567 | 190,455 | 115,037 | |||||||||
Retained earnings
|
544,411 | (469,504 | ) | (282,705 | ) | |||||||
Total equity
|
58,020 | 48,359 | 173,797 |
(1)
|
We define working capital as total current assets minus total current liabilities.
|
• |
Value-Based Care
|
• |
Clinical Services
fee-for-service
|
• |
Software Licensing
ended
|
• |
2013:
Founded
|
• |
2014: Became the first digital-first health service provider to be registered with the CQC, the
healthcare
|
• |
2015:
Began
|
• |
2016: First expanded outside the United Kingdom, launching in Rwanda.
|
• |
2017: Our technology was made available for licensing to corporate and institutional clients
|
• |
2018: We launched our agreement with Prudential in Asia and since then have been rolling out our symptom checker and health assessment solutions across 11 countries.
|
• |
2018: We launched our partnership with TELUS in Canada to use our platform to deliver digital health services across Canada.
|
• |
2020: Our first
end-to-end
|
• |
2021: We completed a business combination with Alkuri, a special purpose acquisition company, on October 21, 2021, pursuant to which our Class A ordinary shares and warrants were listed on the NYSE. In addition, we and Alkuri entered into Subscription Agreements and completed a private placement of Class A ordinary shares to certain investors for an aggregate purchase price of $224 million.
|
• |
DayToDay.
|
• |
Higi
.
|
• |
Fresno Health Care.
end-to-end
|
• |
Meritage Medical Network
.
|
(USD in thousands unless otherwise indicated) |
For the
Six Months Ended June 30, |
Year Ended December 31,
|
||||||||||||||
2021
|
2020
|
2020
|
2019
|
|||||||||||||
$’000
|
$’000
|
|||||||||||||||
Revenue:
|
||||||||||||||||
License fees revenue
|
$ | 44,245 | $ | 10,354 | $ | 24,603 | $ | 2,002 | ||||||||
Clinical services revenue
|
18,134 | 12,149 | 28,631 | 14,032 | ||||||||||||
Value-based care revenue
|
66,392 | — | 26,038 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenue
|
128,771 | 22,053 | 79,272 | 16,034 | ||||||||||||
Cost of care delivery
|
(92,137 | ) | (18,820 | ) | (67,254 | ) | (19,810 | ) | ||||||||
Platform & application expenses
|
(21,377 | ) | (12,898 | ) | (48,664 | ) | (16,948 | ) | ||||||||
Research & development expenses
|
(17,201 | ) | (20,881 | ) | (35,524 | ) | (51,205 | ) | ||||||||
Sales, general & administrative expenses
|
(76,606 | ) | (52,762 | ) | (103,341 | ) | (90,891 | ) | ||||||||
Loss for the financial year
|
(75,722 | ) | (90,813 | ) | (188,030 | ) | (140,287 | ) | ||||||||
EBITDA
|
(62,678 | ) | (78,854 | ) | (164,984 | ) | (143,249 | ) | ||||||||
Adjusted EBITDA
|
(54,160 | ) | (76,243 | ) | (146,155 | ) | (152,358 | ) | ||||||||
(amounts in thousands unless otherwise indicated) |
As of June 30,
|
As of December 31,
|
||||||||||||||
2021
|
2020
|
2020
|
2019
|
|||||||||||||
Users
|
8,197 | 5,267 | 6,828 | 4,074 | ||||||||||||
VBC Members
|
84 | — | 66 | — |
(amounts in thousands unless otherwise indicated) |
Six Months
Ended June 30, |
Year Ended December 31,
|
||||||||||||||
2021
|
2020
|
2020
|
2019
|
|||||||||||||
Loss for the financial year
|
$ | (75,722 | ) | $ | (90,813 | ) | $ | (188,030 | ) | $ | (140,287 | ) | ||||
Add:
|
||||||||||||||||
Depreciation and amortization expenses
|
13,322 | 6,459 | 14,487 | 2,496 | ||||||||||||
Finance costs and income
|
2,215 | 2,563 | 3,920 | 101 | ||||||||||||
Tax (benefit)/ provision
|
(2,493 | ) | 2,937 | 4,639 | (5,559 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
EBITDA
|
(62,678 | ) | (78,854 | ) | (164,984 | ) | (143,249 | ) |
(amounts in thousands unless otherwise indicated) |
Six Months
Ended June 30, |
Year Ended December 31,
|
||||||||||||||
2021
|
2020
|
2020
|
2019
|
|||||||||||||
Share-based compensation
|
12,344 | 433 | 9,557 | 7,966 | ||||||||||||
Impairment expense
|
— | 32 | 6,436 | — | ||||||||||||
Exchange loss/(gain)
|
91 | 2,146 | 2,836 | (17,075 | ) | |||||||||||
(Gain) on sale of subsidiary
|
(3,917 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA
|
$ | (54,160 | ) | $ | (76,243 | ) | $ | (146,155 | ) | $ | (152,358 | ) | ||||
|
|
|
|
|
|
|
|
(dollars in thousand unless otherwise indicated) |
Six Months
Ended June 30, |
Variance
|
||||||||||||||
2021
|
2020
|
$
|
%
|
|||||||||||||
Revenue:
|
||||||||||||||||
Software licensing revenue
|
$ | 44,245 | $ | 10,354 | 33,891 | 327.3 | ||||||||||
Clinical services revenue
|
18,134 | 12,149 | 5,985 | 49.3 | ||||||||||||
Value-based care revenue
|
66,392 | — | 66,392 | NM | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenue
|
128,771 | 22,503 | 106,268 | 472.2 | ||||||||||||
Cost of care delivery
|
(92,137 | ) | (18,820 | ) | (73,317 | ) | 389.6 | |||||||||
Platform & application expenses
|
(21,377 | ) | (12,898 | ) | (8,479 | ) | 65.7 |
(dollars in thousand unless otherwise indicated) |
Six Months
Ended June 30, |
Variance
|
||||||||||||||
2021
|
2020
|
$
|
%
|
|||||||||||||
Research & development expenses
|
(17,201 | ) | (20,881 | ) | 3,681 | (17.6 | ) | |||||||||
Sales, general & administrative expenses
|
(76,606 | ) | (52,762 | ) | (23,844 | ) | 45.2 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss
|
(78,550 | ) | (82,858 | ) | 4,308 | (5.2 | ) | |||||||||
Finance costs
|
(2,243 | ) | (2,569 | ) | 326 | (12.7 | ) | |||||||||
Finance income
|
28 | 6 | 22 | 366.7 | ||||||||||||
Exchange (loss)
|
(91 | ) | (2,146 | ) | 2,055 | (95.8 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net finance (expense) income
|
(2,306 | ) | (4,709 | ) | 2,403 | (51.0 | ) | |||||||||
Gain on sale of subsidiary
|
3,917 | — | 3,917 | NM | ||||||||||||
Share of loss of equity-accounted investees
|
(1,276 | ) | (309 | ) | (967 | ) | 312.9 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before taxation
|
(78,215 | ) | (87,876 | ) | 9,661 | (11.0 | ) | |||||||||
Tax benefit (provision) on loss
|
2,493 | (2,937 | ) | 5,430 | (184.9 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss for the period
|
$ | (75,722 | ) | $ | (90,813 | ) | 15,091 | (16.6 | ) | |||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||||
2021
|
2020
|
|||||||
Revenue:
|
||||||||
License fee revenue
|
34.4 | % | 46.0 | % | ||||
Clinical services revenue
|
14.0 | 54.0 | ||||||
Value-based care revenue
|
51.6 | — | ||||||
|
|
|
|
|||||
Total Revenue
|
100 | 100 | ||||||
Cost of care delivery
|
(71.6 | ) | (83.6 | ) | ||||
Platform & application expenses
|
(16.6 | ) | (57.3 | ) | ||||
Research & development expenses
|
(13.4 | ) | (92.8 | ) | ||||
Sales, general & administrative expenses
|
(59.5 | ) | (234.5 | ) | ||||
|
|
|
|
|||||
Operating loss
|
(61.0 | ) | (368.2 | ) | ||||
Finance costs
|
(1.7 | ) | (11.4 | ) | ||||
Finance income
|
0.02 | 0.03 | ||||||
Exchange (loss)
|
(0.1 | ) | (9.5 | ) | ||||
|
|
|
|
|||||
Net finance (expense) income
|
(1.8 | ) | (20.9 | ) | ||||
Gain on sale of subsidiary
|
3.0 | — | ||||||
Share of loss of equity-accounted investees
|
(1.0 | ) | (1.4 | ) | ||||
|
|
|
|
|||||
Loss before taxation
|
(60.7 | ) | (390.5 | ) | ||||
Tax benefit (provision) on loss
|
1.9 | (13.1 | ) | |||||
|
|
|
|
|||||
Loss for the period
|
(58.8 | )% | (403.6 | )% | ||||
|
|
|
|
(amounts in thousands unless otherwise indicated) |
Six Months Ended June 30,
|
Variance
|
||||||||||||||
2021
|
2020
|
$
|
%
|
|||||||||||||
Revenue:
|
||||||||||||||||
License fee revenue
|
$ | 44,245 | $ | 10,354 | $ | 33,891 | $ | 327.3 | ||||||||
Clinical services revenue
|
18,134 | 12,149 | 5,985 | 49.3 | ||||||||||||
Value-based care revenue
|
66,392 | — | 66,392 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenue
|
$ | 128,771 | $ | 22,503 | $ | 106,268 | $ | 472.2 |
(dollars in thousands unless otherwise indicated) |
Six Months Ended
June 30, |
Variance
|
||||||||||||||
2021
|
2020
|
$
|
%
|
|||||||||||||
Cost of care delivery
|
(92,137 | ) | (18,820 | ) | (73,317 | ) | 389.6 |
(amounts in thousands unless otherwise indicated) |
Six Months Ended
June 30, |
Variance
|
||||||||||||||
2021
|
2020
|
$
|
%
|
|||||||||||||
Platform & application expenses
|
(21,377 | ) | (12,898 | ) | (8,479 | ) | 65.7 |
(amounts in thousands unless otherwise indicated) |
Six Months Ended
June 30, |
Variance
|
||||||||||||||
2021
|
2020
|
$
|
%
|
|||||||||||||
Research & development expenses
|
(17,201 | ) | (20,881 | ) | 3,680 | (17.6 | ) |
(amounts in thousands unless otherwise indicated) |
Six Months Ended
June 30, |
Variance
|
||||||||||||||
2021
|
2020
|
$
|
%
|
|||||||||||||
Sales, general & administrative expenses
|
(76,606 | ) | (52,762 | ) | (23,844 | ) | 45.2 |
(amounts in thousands unless otherwise indicated) |
Six Months Ended
June 30, |
Variance
|
||||||||||||||
2021
|
2020
|
$
|
%
|
|||||||||||||
Exchange (loss)
|
(91 | ) | (2,146 | ) | 2,055 | (95.8 | ) |
(amounts in thousands unless otherwise indicated) |
Six Months Ended
June 30, |
Variance
|
||||||||||||||
2021
|
2020
|
$
|
%
|
|||||||||||||
Gain on sale of subsidiary
|
3,917 | — | 3,917 | NM |
(amounts in thousands unless otherwise indicated) |
Six Months Ended
June 30, |
Variance
|
||||||||||||||
2021
|
2020
|
$
|
%
|
|||||||||||||
Tax benefit / (provision) on loss
|
2,493 | (2,937 | ) | 5,430 | (184.9 | ) |
(USD in thousands unless otherwise indicated) |
Year Ended December 31,
|
Variance
|
||||||||||||||
2020
|
2019
|
$
|
%
|
|||||||||||||
Revenue:
|
||||||||||||||||
License fees revenue
|
$ | 24,603 | $ | 2,002 | 22,601 | NM | % | |||||||||
Clinical services revenue
|
28,631 | 14,032 | 14,599 | 104.0 | ||||||||||||
Value-based care revenue
|
26,038 | — | 26,038 | NM | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue
|
79,272 | 16,034 | 63,238 | 394.4 | ||||||||||||
Cost of care delivery
|
(67,254 | ) | (19,810 | ) | (47,444 | ) | 239.5 | |||||||||
Platform & application expenses
|
(48,664 | ) | (16,948 | ) | (31,716 | ) | 187.1 | |||||||||
Research & development expenses
|
(35,524 | ) | (51,205 | ) | 15,681 | (30.6 | ) | |||||||||
Sales, general & administrative expenses
|
(103,341 | ) | (90,891 | ) | (12,450 | ) | 13.7 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss
|
(175,511 | ) | (162,820 | ) | (12,691 | ) | 7.8 | |||||||||
Finance costs
|
(4,530 | ) | (1,116 | ) | (3,414 | ) | 305.9 | |||||||||
Finance income
|
610 | 1,015 | (405 | ) | (39.9 | ) | ||||||||||
Exchange (loss) / gain
|
(2,836 | ) | 17,075 | (19,911 | ) | (116.6 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net finance (expense) income
|
(6,756 | ) | 16,974 | (23,730 | ) | (139.8 | ) | |||||||||
Share of loss of equity-accounted investees
|
(1,124 | ) | — | (1,124 | ) | NM | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before taxation
|
(183,391 | ) | (145,846 | ) | (37,545 | ) | (25.7 | ) | ||||||||
Tax (provision)/ benefit on loss
|
(4,639 | ) | 5,559 | (10,198 | ) | (183.5 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss for the financial year
|
$ | (188,030 | ) | $ | (140,287 | ) | (47,743 | ) | 34.0 | |||||||
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Revenue:
|
||||||||
License fees revenue
|
31.0 | % | 12.5 | % | ||||
Clinical services revenue
|
36.1 | 87.5 | ||||||
Value-based care revenue
|
32.9 | — | ||||||
|
|
|
|
|||||
Total Revenue
|
100 | 100 | ||||||
Cost of care delivery
|
(84.8 | )% | (123.5 | )% | ||||
Platform & application expenses
|
(61.3 | ) | (105.7 | ) | ||||
Research & development expenses
|
(44.8 | ) | (319.4 | ) | ||||
Sales, general & administrative expenses
|
(130.4 | ) | (566.9 | ) | ||||
|
|
|
|
|||||
Operating loss
|
(221.4 | ) | (NM | ) | ||||
Finance costs
|
(5.7 | ) | (7.0 | ) |
Year Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Finance income
|
0.8 | 6.3 | ||||||
Exchange (loss) / gain
|
(3.6 | ) | 106.5 | |||||
|
|
|
|
|||||
Net finance (expense) income
|
(8.5 | ) | 105.9 | |||||
Share of loss of equity-accounted investees
|
(1.4 | ) | — | |||||
|
|
|
|
|||||
Loss before taxation
|
(231.3 | ) | (909.6 | ) | ||||
Tax (provision)/ benefit on loss
|
(5.9 | ) | 34.7 | |||||
|
|
|
|
|||||
Loss for the financial year
|
(237.2 | )% | (874.9 | )% | ||||
|
|
|
|
(USD in thousands unless otherwise indicated) |
Year Ended
December 31, |
Variance
|
||||||||||||||
2020
|
2019
|
$
|
%
|
|||||||||||||
License fees revenue
|
$ | 24,603 | $ | 2,002 | 22,601 | NM | % | |||||||||
Clinical services revenue
|
28,631 | 14,032 | 14,599 | 104.0 | ||||||||||||
Value-based care revenue
|
26,038 | — | 26,038 | NM | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue
|
79,272 | 16,034 | 63,238 | 394.4 | ||||||||||||
|
|
|
|
|
|
|
|
(USD in thousands unless otherwise indicated) |
Year Ended December 31,
|
Variance
|
||||||||||||||
2020
|
2019
|
$
|
%
|
|||||||||||||
Cost of care delivery
|
(67,254 | ) | (19,810 | ) | (47,444 | ) | 239.5 | % |
(USD in thousands unless otherwise indicated) |
Year ended December 31,
|
Variance
|
||||||||||||||
2020
|
2019
|
$
|
%
|
|||||||||||||
Platform & application expenses
|
(48,664 | ) | (16,948 | ) | (31,716 | ) | 187.1 |
(USD in thousands unless otherwise indicated) |
Year Ended
December 31, |
Variance
|
||||||||||||||
2020
|
2019
|
$
|
%
|
|||||||||||||
Research & development expenses
|
(35,524 | ) | (51,205 | ) | 15,681 | (30.6 | ) |
(USD in thousands unless otherwise indicated) |
Year Ended December 31,
|
Variance
|
||||||||||||||
2020
|
2019
|
$
|
%
|
|||||||||||||
Sales, general & administrative expenses
|
(103,341 | ) | (90,891 | ) | (12,450 | ) | 13.7 | % |
(USD in thousands unless otherwise indicated) |
Year Ended December 31,
|
Variance
|
||||||||||||||
2020
|
2019
|
$
|
%
|
|||||||||||||
Exchange (loss)/ gain
|
(2,836 | ) | 17,075 | (19,911 | ) | (116.6 | )% |
(USD in thousands unless otherwise indicated) |
Year Ended December 31,
|
Variance
|
||||||||||||||
2020
|
2019
|
$
|
%
|
|||||||||||||
Tax (provision) / benefit on loss
|
(4,639 | ) | 5,559 | (10,198 | ) | 183.5 | % |
Six Months Ended June 30,
|
Years Ended December 31,
|
|||||||||||||||
(USD in thousands)
|
2021
|
2020
|
2020
|
2019
|
||||||||||||
Net cash used in operating activities
|
$(19,466) | $(87,391) | $ | (143,430 | ) | $ | (143,614 | ) | ||||||||
Net cash used in investing activities
|
(35,313 | ) | (23,591 | ) | (72,226 | ) | (36,936 | ) | ||||||||
Net cash provided by financing activities
|
(4,485 | ) | (13,007 | ) | 100,058 | 352,521 | ||||||||||
Net (decrease) increase in cash and cash equivalents
|
(59,264 | ) | (123,989 | ) | (115,598 | ) | 171,971 | |||||||||
Cash and cash equivalents beginning of the year
|
101,757 | 214,888 | 214,888 | 46,031 | ||||||||||||
Effect of exchange rates
|
(112 | ) | (703 | ) | 2,467 | (3,114 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents end of the year
|
$ | 42,381 | $ | 90,196 | $ | 101,757 | $ | 214,888 | ||||||||
|
|
|
|
|
|
|
|
Payments due by Period
|
||||||||||||||||
2021
(remainder of year) |
2022 -
2023 |
2024 -
2025 |
Thereafter
|
|||||||||||||
Operating lease obligations
|
1,206 | 9,581 | 4,422 | 1,377 | ||||||||||||
Borrowings
|
473 | — | — | — |
June 30, 2021
|
December 31, 2020
|
|||||||
Total assets
|
66,489 | $ | 35,535 | |||||
Total liabilities
|
81,429 | 42,699 | ||||||
Six Months Ended
June 30, 2021 |
For the Year Ended
December 31, 2020 |
|||||||
Revenue
|
35,786 | $ | 17,436 | |||||
Operating expenses:
|
||||||||
Cost of care delivery
|
36,710 | 20,175 | ||||||
Sales, general & administrative expenses
|
4,404 | 3,799 | ||||||
|
|
|
|
|||||
Total operating expenses
|
|
41,114
|
|
$
|
23,973
|
|
||
|
|
|
|
• |
the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;
|
• |
the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and
|
• |
the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form
10-Q
containing unaudited financial and other specific information, and current reports on Form
8-K
upon the occurrence of specified significant events.
|
• |
On October 21, 2021, the parties consummated the transactions contemplated by that certain Merger Agreement dated as of June 3, 2021 by and among Alkuri Global Acquisition Corp., a Delaware corporation (“Alkuri”), Babylon Holdings Limited (“Babylon”), and other parties thereto whereby Alkuri became a wholly owned subsidiary of Babylon (the “Business Combination”);
|
• |
On October 21, 2021, Babylon sold 22,400,000 Class A Ordinary Shares to subscribers pursuant to a Subscription Agreement dated June 3, 2021 for gross proceeds of $224,000,000 to Babylon in connection with the Business Combination (the “PIPE Sale”); and
|
• |
the probable acquisition of higi SH Holdings Inc. (“Higi”) by Babylon (the “Higi acquisition”).
|
• |
Babylon’s historical unaudited consolidated financial statements as of and for the six months ended June 30, 2021;
|
• |
Babylon’s historical audited consolidated financial statements as of and for the year ended December 31, 2020;
|
• |
Higi’s historical unaudited consolidated financial statements as of and for the six months ended June 30, 2021;
|
• |
Higi’s historical audited consolidated financial statements as of and for the year ended December 31, 2020;
|
• |
Alkuri’s historical condensed consolidated financial statements as of and for the six months ended June 30, 2021; and
|
• |
Alkuri’s historical condensed consolidated financial statements as of and for the quarter ended March 31, 2021. As a newly incorporated business on December 1, 2020, the results of Alkuri prior to January 1, 2021 were not material.
|
(in thousands, except for share amounts)
|
||||
Shares transferred at Closing
|
336,427,107 | |||
Value per share
(1)
|
$ | 10.90 | ||
|
|
|||
Total Share Consideration
|
$ | 3,667,055 |
|
|
|
|
(1) |
Share Consideration is calculated using the value of Alkuri Common Stock at Closing.
|
Alkuri
(Historical) |
Babylon
(Historical) |
Combined Pro
Forma
|
Babylon
Equivalent Per Share Pro
Forma
|
|||||||||||||
As of and for the period ending
|
Jun-21
|
Jun-21
|
||||||||||||||
Book Value per share
(1)
|
$ | 0.45 | $ | 0.06 | $ | 0.76 | $ | 0.23 | ||||||||
Weighted averages shares outstanding - basic and diluted
|
813,746,192 | |||||||||||||||
Net loss per share - basic and diluted
|
$ | (0.09 | ) | |||||||||||||
Weighted average shares outstanding of common share - basic and diluted
|
11,104,045 | 369,801,010 | 336,427,107 | |||||||||||||
Net loss per share of common share - basic and diluted
(2)
|
$ | (0.69 | ) | (0.22 | ) | (0.07 | ) |
(1) |
Book value per share = Total equity excluding preferred shares divided by shares outstanding
|
(2) |
The equivalent pro forma basic and diluted per share data for Babylon is calculated by multiplying the combined pro forma per share data by the 0.302 Exchange Ratio.
|
Alkuri
(Historical) |
Babylon
(Historical) |
Combined Pro
Forma |
Babylon
Equivalent Per Share Pro Forma |
|||||||||||||
As of and for the period ending
|
Mar-21
|
Dec-20
|
||||||||||||||
Book Value per share
(1)
|
$ | 0.50 | $ | 0.06 | $ | 0.97 | $ | 0.29 | ||||||||
Weighted averages shares outstanding - basic and diluted
|
803,901,000 | |||||||||||||||
Net loss per share - basic and diluted
|
$ | (0.23 | ) | |||||||||||||
Weighted average shares outstanding of common share - basic and diluted
|
10,052,006 | 369,801,010 | 336,427,107 | |||||||||||||
Net loss per share of common share - basic and diluted
(2)
|
$ | (0.12 | ) | (0.83 | ) | (0.25 | ) |
(1) |
Book value per share = Total equity excluding preferred shares divided by shares outstanding
|
(2) |
The equivalent pro forma basic and diluted per share data for Babylon is calculated by multiplying the combined pro forma per share data by the 0.302 Exchange Ratio.
|
Statement of Financial Position
Amounts in thousands, except for
per share amount |
||||||||||||||||||||||||||||||||||||
As of
June 30, 2021 |
As of
June 30, 2021 |
As of
June 30, 2021 |
As of
June 30, 2021 |
As of
June 30, 2021 |
||||||||||||||||||||||||||||||||
Alkuri
(Historical) |
Babylon
(Historical) |
Higi
Acquisition Historical |
Combined
(Historical) |
PPA
Adjustments |
Pro Forma
Adjustments |
Pro
Forma Combined |
||||||||||||||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||||||||||||||
Right of use of assets
|
— | 3,487 | — | 3,487 | — | 3,487 | ||||||||||||||||||||||||||||||
Trade and other receivables
|
— | 28,218 | 2,474 | 30,692 | — | 30,692 | ||||||||||||||||||||||||||||||
Prepayments and contract assets
|
987 | 9,253 | 384 | 10,624 | — | 10,624 | ||||||||||||||||||||||||||||||
Cash and cash equivalents
|
71 | 42,381 | 5,458 | 47,910 | (10,767 | ) | (CC | ) | 224,000 | (A | ) | 211,501 | ||||||||||||||||||||||||
(5,458 | ) | (EE | ) | — | ||||||||||||||||||||||||||||||||
(16,259 | ) | (D | ) | |||||||||||||||||||||||||||||||||
36,429 | (B | ) | ||||||||||||||||||||||||||||||||||
(63,773 | ) | (H | ) | |||||||||||||||||||||||||||||||||
(581 | ) | (H | ) | |||||||||||||||||||||||||||||||||
Assets held for sale
|
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Restricted cash
|
— | — | 273 | 273 | — | — | 273 | |||||||||||||||||||||||||||||
Other current assets
|
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total current assets
|
1,058 | 83,339 | 8,589 | 92,986 | (16,225 | ) | 179,618 | 256,577 | ||||||||||||||||||||||||||||
Property, plant and equipment
|
— | 2,879 | 114 | 2,993 | — | 2,993 | ||||||||||||||||||||||||||||||
Right of use of assets
|
— | 10,135 | 1,233 | 11,368 | — | 11,368 | ||||||||||||||||||||||||||||||
Investments
|
— | 12,600 | — | 12,600 | (12,600 | ) | (AA | ) | — | |||||||||||||||||||||||||||
Marketable securities held in Trust Account
|
345,022 | — | — | 345,022 | — | (345,022 | ) | (B | ) | — | ||||||||||||||||||||||||||
Goodwill
|
— | 31,303 | — | 31,303 | 23,440 | (AA | ) | 99,571 | ||||||||||||||||||||||||||||
1,624 | (BB | ) | ||||||||||||||||||||||||||||||||||
70,320 | (CC | ) | ||||||||||||||||||||||||||||||||||
231 | (DD | ) | ||||||||||||||||||||||||||||||||||
(25,805 | ) | (DD | ) | |||||||||||||||||||||||||||||||||
(1,542 | ) | (EE | ) | |||||||||||||||||||||||||||||||||
Other intangible assets
|
— | 102,331 | 231 | 102,562 | (231 | ) | (DD | ) | 134,189 | |||||||||||||||||||||||||||
31,858 | (DD | ) | ||||||||||||||||||||||||||||||||||
Other noncurrent assets
|
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Total non current assets
|
345,022 | 159,248 | 1,578 | 505,848 | 87,295 | (345,022 | ) | 248,121 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
TOTAL ASSETS
|
|
346,080
|
|
|
242,587
|
|
|
10,167
|
|
|
598,834
|
|
|
71,070
|
|
|
(165,206
|
)
|
|
504,698
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||||||||||||||||||||||||||
Accounts payable
|
— | 26,231 | 1,012 | 27,243 | — | 27,243 | ||||||||||||||||||||||||||||||
Accrued liabilities
|
4,099 | 31,574 | 1,072 | 36,745 | — | (4,099 | ) | (D | ) | 32,646 | ||||||||||||||||||||||||||
Contract Liabilities
|
— | 23,136 | — | 23,136 | — | 23,136 | ||||||||||||||||||||||||||||||
Deferred grant income - tax credit
|
1,264 | 1,264 | — | 1,264 | ||||||||||||||||||||||||||||||||
Current maturities of related party promissor
|
— | — | 940 | 940 | — | 940 | ||||||||||||||||||||||||||||||
Lease Liabilities
|
— | 1,984 | 332 | 2,316 | — | 2,316 | ||||||||||||||||||||||||||||||
Loans and Borrowings
|
— | 473 | — | 473 | — | (EE | ) | — | 6,473 | |||||||||||||||||||||||||||
6,000 | (CC | ) | ||||||||||||||||||||||||||||||||||
Liabilities directly associated with the assets
|
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Accrued offering costs
|
85 | — | — | 85 | — | (85 | ) | (D | ) | — | ||||||||||||||||||||||||||
Deferred liability
|
12,075 | — | — | 12,075 | — | (12,075 | ) | (D | ) | — | ||||||||||||||||||||||||||
Other current liabilities
|
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total current liabilities
|
16,259 | 84,662 | 3,356 | 104,277 | 6,000 | (16,259 | ) | 94,018 | ||||||||||||||||||||||||||||
Deferred tax liability
|
— | 768 | — | 768 | 6,053 | (DD | ) | 6,821 | ||||||||||||||||||||||||||||
Related party convertible promissory notes
|
— | — | 7,000 | 7,000 | (7,000 | ) | (EE | ) | — | |||||||||||||||||||||||||||
Deferred rent liability
|
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Other long-term liabilities
|
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Contract Liabilities
|
— | 81,982 | — | 81,982 | — | 81,982 | ||||||||||||||||||||||||||||||
Deferred grant income - tax credit
|
— | 6,340 | — | 6,340 | — | 6,340 | ||||||||||||||||||||||||||||||
Common stock subject to possible redemptio
|
— | — | — | — | — | 303,328 | (E | ) | — | |||||||||||||||||||||||||||
(303,328 | ) | (E | ) | |||||||||||||||||||||||||||||||||
Lease Liabilities
|
— | 10,815 | 1,435 | 12,250 | — | 12,250 | ||||||||||||||||||||||||||||||
Warrant Liability
|
21,493 | — | — | 21,493 | — | 21,493 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total liabilities
|
|
37,752
|
|
|
184,567
|
|
|
11,791
|
|
|
234,110
|
|
|
5,053
|
|
|
(16,259
|
)
|
|
222,904
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Common stock subject to possible redemptio
|
303,328 | 303,328 | (303,328 | ) | (E | ) | — |
Statement of Financial Position
Amounts in thousands, except for
per share amounts |
||||||||||||||||||||||||||||||||||||
As of
June 30, 2021 |
As of
June 30, 2021 |
As of
June 30, 2021 |
As of
June 30, 2021 |
As of
June 30, 2021 |
||||||||||||||||||||||||||||||||
Alkuri
(Historical) |
Babylon
(Historical) |
Higi
Acquisition Historical |
Combined
(Historical) |
PPA
Adjustments |
Pro Forma
Adjustments |
Pro
Forma Combined |
||||||||||||||||||||||||||||||
Common stock subject to possible redemption
|
303,328 | 303,328 | (303,328 | ) | (E | ) | — | |||||||||||||||||||||||||||||
Stockholders’ equity (deficit):
|
||||||||||||||||||||||||||||||||||||
Common stock Class A
|
1 | — | 6 | 7 | (6 | ) | (1 | ) | (C | ) | — | |||||||||||||||||||||||||
Common stock class B
|
1 | — | — | 1 | — | (1 | ) | (C | ) | — | ||||||||||||||||||||||||||
Series B preferred stock
|
— | — | — | — | — | (BB | ) | — | ||||||||||||||||||||||||||||
Series
A-3
preferred stock
|
— | — | — | — | — | (BB | ) | — | ||||||||||||||||||||||||||||
Series
A-2
preferred stock
|
— | — | — | — | — | (BB | ) | — | ||||||||||||||||||||||||||||
Series
A-1
preferred stock
|
— | — | — | — | — | (BB | ) | — | ||||||||||||||||||||||||||||
Additional
paid-in
capital
|
12,636 | — | 89,197 | 101,833 | — | (AA | ) | 223,998 | (A | ) | 322,313 | |||||||||||||||||||||||||
(89,197 | ) | (BB | ) | (7,636 | ) | (C | ) | |||||||||||||||||||||||||||||
53,553 | (CC | ) | (5,265 | ) | (E | ) | ||||||||||||||||||||||||||||||
108,829 | (F | ) | ||||||||||||||||||||||||||||||||||
— | ||||||||||||||||||||||||||||||||||||
(29 | ) | (G | ) | |||||||||||||||||||||||||||||||||
(63,773 | ) | (H | ) | |||||||||||||||||||||||||||||||||
Ordinary share capital
|
— | 10 | — | 10 | — | 29 | (G | ) | 41 | |||||||||||||||||||||||||||
2 | (A | ) | ||||||||||||||||||||||||||||||||||
Preference share capital
|
— | 4 | — | 4 | — | 4 | ||||||||||||||||||||||||||||||
Share premium
|
— | 557,569 | — | 557,569 | — | — | 557,569 | |||||||||||||||||||||||||||||
Share based payment reserve
|
— | 45,286 | — | 45,286 | — | 45,286 | ||||||||||||||||||||||||||||||
Retained earnings/(accumulated deficit)
|
(7,638 | ) | (544,411 | ) | (90,827 | ) | (642,876 | ) | 101,667 | (BB | ) | 7,638 | (C | ) | (642,981 | ) | ||||||||||||||||||||
(108,829 | ) | (F | ) | |||||||||||||||||||||||||||||||||
— | ||||||||||||||||||||||||||||||||||||
(581 | ) | |||||||||||||||||||||||||||||||||||
Non-controlling
interests
|
— | (2,046 | ) | — | (2,046 | ) | — | (2,046 | ) | |||||||||||||||||||||||||||
Translation differences
|
— | 1,608 | — | 1,608 | — | 1,608 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total stockholders’ equity
|
5,000 | 58,020 | (1,624 | ) | 61,396 | 66,017 | 154,381 | 281,794 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
346,080
|
|
|
242,587
|
|
|
10,167
|
|
|
598,834
|
|
|
71,070
|
|
|
(165,206
|
)
|
|
504,698
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) |
To reflect the proceeds received from the PIPE Investment with the corresponding issuance of 22,400,000 Babylon Class A Shares at US$10.00 per share, or $224 million.
|
(B) |
To reflect the release of cash from marketable securities held in the trust account after the redemptions by Alkuri shareholders.
|
(C) |
To reflect the elimination of historical accumulated deficit in Alkuri as it is the accounting acquiree.
|
(D) |
To reflect the settlement of Alkuri’s historical current liabilities at Closing.
|
(E) |
To reflect the reclassification of Alkuri Class A Common Stock subject to possible redemption of approximately $303 million from temporary equity under U.S. GAAP to a liability under IFRS, because the right to redeem is at the option of the holder. Additional adjustments reflect the redemption of 30,857,347 shares of Alkuri common stock which resulted in the reduction of the investments held in the trust account balance by $308 million and a reduction of APIC by $5.3 million.
|
(F) |
To reflect the fair value of share consideration of $120.6 million in excess of Alkuri net monetary assets acquired of $11.8 million as a Recapitalization transaction expense of $108.8 million. The fair value of share consideration was estimated based on the market capitalization of the combined company based on the closing stock price of Babylon Holdings Limited, and after taking into account the Stockholder Earnout and Sponsor Earnout. The fair value Alkuri’s net monetary assets was primarily composed of Marketable securities held in trust, including the effect of redemptions, and Alkuri’s historical condensed consolidated financial statements.
|
(G) |
To reflect the Business Combination of Babylon through the issuance of 290,000,000 of Babylon Class A Shares as consideration for the Business Combination assuming no redemptions.
|
(H) |
To reflect the payment of an aggregate of $63.8 million of legal, financial advisory and other professional fees that are directly attributable to the equity issuance costs as part of the Business Combination, which is reflected as an adjustment to additional paid in capital. These expenses were not previously accounted for in the financial statements as for the twelve months ended December 31, 2020 and as of June 30, 2021. Furthermore, expenses related to audit fees were expensed and adjusted for in retained earnings.
|
State of Profit and Loss
|
||||||||||||||||||||||||||||
January 1,
2021 to June 30, 2021 |
January 1,
2021 to June 30, 2021 |
January 1,
2021 to June 30, 2021 |
January 1,
2021 to June 30, 2021 |
January 1,
2021 to June 30, 2021 |
||||||||||||||||||||||||
Alkuri
(Historical) |
Babylon
(Historical) |
Higi
Acquisition |
Combined
(Historical) |
Purchase
price allocation adjustments |
Pro Forma
Adjustments |
Pro Forma
Combined |
||||||||||||||||||||||
Revenue
|
— | 128,771 | 4,621 | 133,392 | — | — | 133,392 | |||||||||||||||||||||
Cost of care delivery
|
— | (92,137 | ) | — | (92,137 | ) | — | — | (92,137 | ) | ||||||||||||||||||
Formation and operating costs
|
(5,266 | ) | — | — | (5,266 | ) | — | — | (5,266 | ) | ||||||||||||||||||
Platform & application expense
|
— | (21,377 | ) | (21,377 | ) | — | — | (21,377 | ) | |||||||||||||||||||
Research & development and technology expenses
|
— | (17,201 | ) | (8,638 | ) | (25,839 | ) | — | — | (25,839 | ) | |||||||||||||||||
Sales, General and administrative expenses
|
— | (76,606 | ) | (1,947 | ) | (78,553 | ) | (2,264 | ) (DD) | — | (80,817 | ) | ||||||||||||||||
— | — | |||||||||||||||||||||||||||
Recapitalization transaction expenses
|
— | — | — | — | — | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating loss
|
(5,266 | ) | (78,550 | ) | (5,964 | ) | (89,780 | ) | (2,264 | ) | — | (92,044 | ) | |||||||||||||||
Finance costs
|
— | (2,243 | ) | (645 | ) | (2,888 | ) | — | — | (2,888 | ) | |||||||||||||||||
Finance income
|
23 | 28 | 1,010 | 1,061 | — | (23 | ) (K) | 1,038 | ||||||||||||||||||||
Change in FV of warrant liability
|
(2,389 | ) | — | — | (2,389 | ) | — | — | (2,389 | ) | ||||||||||||||||||
Exchange gain/(loss)
|
— | (91 | ) | — | (91 | ) | — | — | (91 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net finance expense
|
(2,366 | ) | (2,306 | ) | 365 | (4,307 | ) | — | (23 | ) | (4,330 | ) | ||||||||||||||||
Gain/Loss On Sale
|
3,917 | 3,917 | — | 3,917 | ||||||||||||||||||||||||
Share of loss of equity-accounted investees
|
— | (1,276 | ) | — | (1,276 | ) | — | — | (1,276 | ) | ||||||||||||||||||
Interest income
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Other expense (income)
|
— | — | — | — | 10,840 | (AA) | — | 10,840 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income (loss) before income taxes
|
(7,632 | ) | (78,215 | ) | (5,599 | ) | (91,446 | ) | 8,576 | (23 | ) | (82,893 | ) | |||||||||||||||
Taxcredit on loss
|
— | 2,493 | (59 | ) | 2,434 | — | — | 2,434 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss) attributable to common stockholders
|
(7,632 | ) | (75,722 | ) | (5,658 | ) | (89,012 | ) | 8,576 | (23 | ) | (80,459 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders - Basic and Diluted
|
813,746,192 | 369,801,010 | ||||||||||||||||||||||||||
Net loss per share attributable to common stockholders - Basic and Diluted
|
(0.09 | ) | (0.22 | ) |
State of Profit and Loss
|
||||||||||||||||||||||||||||||||||||
January 1,
2021 to March 31, 2021 |
January 1,
2020 to December 31, 2020 |
January 1,
2020 to December 31, 2020 |
January 1,
2020 to December 31, 2020 |
January 1,
2020 to December 31, 2020 |
For Periods
shown below |
|||||||||||||||||||||||||||||||
Alkuri
(Historical) |
Babylon
(Historical) |
Higi
Acquisition |
Combined
(Historical) |
Purchase
price allocation adjustments |
Pro Forma
Adjustments |
Pro Forma
Combined |
||||||||||||||||||||||||||||||
Revenue
|
— | 79,272 | 9,486 | 88,758 | — | — | 88,758 | |||||||||||||||||||||||||||||
Cost of care delivery
|
— | (67,254 | ) | — | (67,254 | ) | — | — | (67,254 | ) | ||||||||||||||||||||||||||
Formation and operating costs
|
(1,075 | ) | — | — | (1,075 | ) | — | — | (1,075 | ) | ||||||||||||||||||||||||||
Platform & application expense
|
— | (48,664 | ) | — | (48,664 | ) | — | — | (48,664 | ) | ||||||||||||||||||||||||||
Research & development and technology expenses
|
— | (35,524 | ) | (15,500 | ) | (51,024 | ) | — | — | (51,024 | ) | |||||||||||||||||||||||||
Sales, General and administrative expenses
|
— | (103,341 | ) | (4,165 | ) | (107,506 | ) | (4,528 | ) | (DD | ) | — | (112,615 | ) | ||||||||||||||||||||||
— | (581 | ) | (H | ) | ||||||||||||||||||||||||||||||||
Recapitalization transaction expenses
|
— | — | — | — | — | (108,829 | ) | (J | ) | (108,829 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Operating loss
|
(1,075 | ) | (175,511 | ) | (10,179 | ) | (186,765 | ) | (4,528 | ) | (109,410 | ) | (300,703 | ) | ||||||||||||||||||||||
Finance costs
|
— | (4,530 | ) | (6,296 | ) | (10,826 | ) | — | (3,266 | ) | (L | ) | (14,092 | ) | ||||||||||||||||||||||
Finance income
|
10 | 610 | 3,000 | 3,620 | — | (10 | ) | (K | ) | 3,610 | ||||||||||||||||||||||||||
Change in FV of warrant liability
|
(92 | ) | — | — | (92 | ) | — | — | (92 | ) | ||||||||||||||||||||||||||
Exchange gain/(loss)
|
— | (2,836 | ) | — | (2,836 | ) | — | — | (2,836 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net finance expense
|
(82 | ) | (6,756 | ) | (3,296 | ) | (10,134 | ) | — | (3,276 | ) | (13,410 | ) | |||||||||||||||||||||||
Share of loss of equity-accounted investees
|
— | (1,124 | ) | — | (1,124 | ) | — | — | (1,124 | ) | ||||||||||||||||||||||||||
Interest income
|
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Other expense (income)
|
— | — | — | — | 14,564 | (AA | ) | — | 14,564 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Income (loss) before income taxes
|
(1,157 | ) | (183,391 | ) | (13,475 | ) | (198,023 | ) | 10,036 | (112,686 | ) | (300,673 | ) | |||||||||||||||||||||||
Taxcredit on loss
|
— | (4,639 | ) | (93 | ) | (4,732 | ) | — | — | (4,732 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net income (loss) attributable to common stockholders
|
(1,157 | ) | (188,030 | ) | (13,568 | ) | (202,755 | ) | 10,036 | (112,686 | ) | (305,405 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Outstanding
Shares |
||||||||||||||||||||||||||||||||||||
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders - Basic and Diluted
|
803,901,000 | 369,801,010 | ||||||||||||||||||||||||||||||||||
Net loss per share attributable to common stockholders - Basic and Diluted
|
(0.23 | ) | (0.83 | ) |
(J) |
As discussed in (F) the listing expense charge to recapitalization transaction expenses is $108.8 million.
|
(K) |
Reflects the elimination of interest income on Alkuri’s Trust Account.
|
(L) |
Reflects the adjustment related to the bridge financing obtained by Babylon. On August 18, 2021, the Group issued $50.0 million in unsecured bonds at a discount of 4.0% (“Unsecured Bonds”), including the
non-cash
conversion of $8.0 million in borrowings under the loan agreement dated July 15, 2021 with VNV (Cyprus) Limited into Unsecured Bonds. The proceeds from the Unsecured Bonds can be used for general corporate purposes. For purposes of the pro forma statements, the Unsecured Bonds are shown to be repaid in full once the transaction closes. Therefore, the capitalized costs associated with the financing have been expensed during the twelve months ended December 31, 2020.
|
Pro Forma
Combined Company |
||||
Summary Unaudited Pro Forma Condensed Combined
|
||||
Statement of Operations Data
|
||||
Period Ending December 31, 2020 Babylon and March 31, 2021, Alkuri
|
||||
Revenue
|
88,758 | |||
Net loss per share – basic and diluted
|
$ | (0.83 | ) | |
Weighted-average Common shares outstanding – basic and diluted
|
369,801,010 | |||
Summary Unaudited Pro Forma Condensed Combined
|
||||
Balance Sheet Data as of December 31, 2020
|
||||
Total assets
|
515,635 | |||
Total liabilities
|
157,004 | |||
Total stockholders equity
|
358,631 |
Pro Forma
Combined Company |
||||
Summary Unaudited Pro Forma Condensed Combined
|
||||
Statement of Operations Data
|
||||
Period Ending June 30, 2021
|
||||
Revenue
|
133,392 | |||
Net loss per share – basic and diluted
|
$ | (0.22 | ) | |
Weighted-average Common shares outstanding – basic and diluted
|
369,801,010 | |||
Summary Unaudited Pro Forma Condensed Combined
|
||||
Balance Sheet Data as of June 30, 2021
|
||||
Total assets
|
504,698 | |||
Total liabilities
|
222,904 | |||
Total stockholders equity
|
281,794 |
Reclassifications and US GAAP to IFRS
Adjustments |
||||||||||||||||||||
(USD in thousands)
|
Higi
(US GAAP) |
Reclassifications
1 |
Leases
2 |
Share-based
Payments
3
|
Adjusted Higi
(IFRS) |
|||||||||||||||
For the six months ended June 30, 2021
|
||||||||||||||||||||
Revenue
|
4,621 | — | — | — | 4,621 | |||||||||||||||
Cost of Revenues
|
||||||||||||||||||||
Depreciation of Higi stations
|
30 | (30 | ) | — | — | — | ||||||||||||||
Other
|
3,567 | (3,567 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cost of revenue
|
|
3,597
|
|
|
(3,597
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Gross income (loss)
|
|
1,024
|
|
|
3,597
|
|
|
—
|
|
|
—
|
|
|
4,621
|
|
|||||
Research and development expenses
|
— | 8,638 | 8,638 | |||||||||||||||||
Sales, general & administration costs
|
32 | 1,894 | 24 | (3 | ) | 1,947 | ||||||||||||||
Operating expenses
|
6,969 | (6,939 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating Loss
|
|
(5,977
|
)
|
|
34
|
|
(24 | ) | 3 | (5,964 | ) | |||||||||
Finance costs
|
— | 645 | — | — | 645 | |||||||||||||||
Finance income
|
— | (1,010 | ) | — | — | (1,010 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net finance expense (income)
|
|
—
|
|
|
(365
|
)
|
— | — | (365 | ) | ||||||||||
Interest expense
|
611 | (611 | ) | — | — | — | ||||||||||||||
Loss on discount related to conversion of promissory notes
|
— | — | — | — | — | |||||||||||||||
Forgiveness of paycheck protection program funds
|
(1,010 | ) | 1,010 | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net other expense
|
(399 | ) | 399 | — | — | — | ||||||||||||||
Income tax expense (benefit)
|
59 | — | — | — | 59 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net Loss
|
|
(5,637
|
)
|
|
—
|
|
|
(24
|
)
|
|
3
|
|
|
(5,658
|
)
|
Reclassifications and US GAAP to IFRS
Adjustments |
||||||||||||||||||||
(USD in thousands)
|
Higi
(US GAAP) |
Reclassifications
1 |
Leases
2 |
Share-based
Payments
3
|
Adjusted Higi
(IFRS) |
|||||||||||||||
For the year ended December 31, 2020
|
||||||||||||||||||||
Revenue
|
9,486 | — | — | — | 9,486 | |||||||||||||||
Cost of Revenues
|
||||||||||||||||||||
Depreciation of Higi stations
|
151 | (151 | ) | — | — | — | ||||||||||||||
Other
|
6,676 | (6,676 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cost of revenue
|
|
6,827
|
|
|
(6,827
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Gross income (loss)
|
|
2,659
|
|
|
6,827
|
|
|
—
|
|
|
—
|
|
|
9,486
|
|
|||||
Research and development expenses
|
— | 15,500 | — | — | 15,500 | |||||||||||||||
Sales, general & administration costs
|
— | 4,098 | 56 | 11 | 4,165 | |||||||||||||||
Operating expenses
|
12,534 | (12,534 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating Loss
|
|
(9,875
|
)
|
|
(237
|
)
|
|
(56
|
)
|
|
(11
|
)
|
|
(10,179
|
)
|
|||||
Finance costs
|
— | 6,296 | — | — | 6,296 | |||||||||||||||
Finance income
|
— | (3,000 | ) | — | — | (3,000 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net finance expense (income)
|
|
—
|
|
|
3,296
|
|
|
—
|
|
|
—
|
|
|
3,296
|
|
|||||
Interest expense
|
1,660 | (1,660 | ) | — | — | — | ||||||||||||||
Loss on discount related to conversion of promissory notes
|
4,636 | (4,636 | ) | — | — | — | ||||||||||||||
Gain on extinguishment of debt
|
(3,000 | ) | 3,000 | — | — | — | ||||||||||||||
Other expenses
|
250 | (250 | ) | — | — | — | ||||||||||||||
Gain on disposal of fixed assets
|
(15 | ) | 15 | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net other expense
|
3,531 | (3,531 | ) | — | — | — | ||||||||||||||
Income tax expense (benefit)
|
95 | (2 | ) | — | — | 93 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net Loss
|
|
(13,501
|
)
|
|
—
|
|
|
(56
|
)
|
|
(11
|
)
|
|
(13,568
|
)
|
Reclassifications and US GAAP to IFRS
Adjustments |
||||||||||||||||||||
(USD in thousands)
|
Higi
(US GAAP) |
Reclassifications
1 |
Leases
2 |
Share-based
Payments
3
|
Adjusted
Higi (IFRS) |
|||||||||||||||
As of June 30, 2021
|
||||||||||||||||||||
Non-Current
Assets
|
||||||||||||||||||||
Right of Use Asset
|
— | — | 1,233 | — | 1,233 | |||||||||||||||
Property and Equipment, net
|
114 | — | — | — | 114 | |||||||||||||||
Security deposits
|
66 | (66 | ) | — | — | — | ||||||||||||||
Other intangible assets, net
|
231 | — | — | — | 231 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total
non-current
assets
|
411 | (66 | ) | 1,233 | — | 1,578 | ||||||||||||||
— | ||||||||||||||||||||
Current Assets
|
||||||||||||||||||||
Other current assets
|
100 | (100 | ) | — | — | — | ||||||||||||||
Accounts receivable, net
|
2,374 | (2,374 | ) | — | — | — | ||||||||||||||
Trade and other receivables
|
— | 2,474 | — | — | 2,474 | |||||||||||||||
Prepayments and contract assets
|
318 | 66 | — | — | 384 | |||||||||||||||
Restricted cash
|
273 | — | — | — | 273 | |||||||||||||||
Cash and cash equivalents
|
5,458 | — | — | — | 5,458 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current assets
|
8,523 | 66 | — | — | 8,589 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets
|
|
8,934
|
|
|
—
|
|
|
1,233
|
|
|
—
|
|
|
10,167
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
— | ||||||||||||||||||||
Equity
|
||||||||||||||||||||
Common and Preferred Stock
|
6 | — | — | — | 6 | |||||||||||||||
Additional
paid-in
capital
|
89,194 | — | — | 3 | 89,197 | |||||||||||||||
Accumulated deficit
|
(90,574 | ) | — | (250 | ) | (3 | ) | (90,827 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total capital and reserves
|
(1,374 | ) | — | (250 | ) | — | (1,624 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities
|
||||||||||||||||||||
Non-current
liabilities
|
||||||||||||||||||||
Related party promissory notes
|
7,000 | — | — | — | 7,000 | |||||||||||||||
Deferred rent liability
|
284 | — | (284 | ) | — | — | ||||||||||||||
Deferred revenue
|
131 | (131 | ) | — | — | — | ||||||||||||||
Other long-term liabilities
|
100 | (100 | ) | — | — | — | ||||||||||||||
Lease liability
|
— | — | 1,435 | — | 1,435 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total long- term liabilities
|
7,515 | (231 | ) | 1,151 | — | 8,435 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Current Liabilities
|
||||||||||||||||||||
Accounts Payable
|
1,012 | (1,012 | ) | — | — | — | ||||||||||||||
Accrued Expenses
|
964 | (964 | ) | — | — | — | ||||||||||||||
Due to employees
|
8 | (8 | ) | — | — | — | ||||||||||||||
Trade and other payables
|
— | 1,012 | — | — | 1,012 | |||||||||||||||
Accruals and provisions
|
— | 1,072 | — | — | 1,072 | |||||||||||||||
Deferred revenue
|
809 | 131 | — | — | 940 | |||||||||||||||
Note Payable
|
— | — | — | — | — | |||||||||||||||
Lease liability, current portion
|
— | — | 332 | — | 332 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current liabilities
|
2,793 | 231 | 332 | — | 3,356 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and stockholders deficit
|
|
8,934
|
|
— |
|
1,233
|
|
|
—
|
|
|
10,167
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
1.) |
The classification of certain items presented by Higi under U.S. GAAP has been adjusted in order to align with the presentation of Babylon under IFRS.
|
• |
Presentation of Depreciation of Higi stations ($0.1 million) and Other cost of revenue ($6.7 million) in Research and development expenses ($6.8 million).
|
• |
Separate presentation of components of Operating expenses ($12.5 million) to Research and development expenses ($8.8 million) and Sales, general and administrative expenses ($3.7 million).
|
• |
Presentation of Interest expense ($1.7 million) and Loss on discount related to conversion of promissory notes ($4.6 million) to Finance costs ($6.3 million).
|
• |
Presentation of Gain on extinguishment of debt ($3.0 million) to Finance income ($3.0 million).
|
• |
Presentation of Other expenses ($0.2 million) in Sales, general & administrative expenses ($0.2 million).
|
• |
Presentation of Other cost of revenue ($3.6 million) in Research and development expenses ($3.6 million).
|
• |
Separate presentation of components of Operating expenses ($7.0 million) to Research and development expenses ($5.1 million) and Sales, general and administrative expenses ($1.9 million).
|
• |
Presentation of Interest expense ($0.6 million) to Finance costs ($0.6 million).
|
• |
Presentation of Forgiveness of paycheck protection program funds ($1.0 million) to Finance income ($1.0 million).
|
• |
Presentation of Accounts receivable, net ($2.4 million) and Other current assets ($0.1 million) in Trade and other receivables ($2.5 million).
|
• |
Presentation of Accounts Payable ($1.0 million) to Trade and other Payables ($1.0 million).
|
• |
Presentation of Accrued expenses ($1.0 million) to Accruals and provisions ($1.0 million).
|
2.) |
Higi has not adopted ASC 842, Leases, which becomes effective for private companies with fiscal years beginning after December 15, 2021. In accordance with IFRS 16, Leases¸ and Babylon’s accounting policies, right of use assets of $1.2 million and lease liabilities of $1.8 million have been recognized in the balance sheet as of June 30, 2021. In addition, accrued rent liabilities of $0.3 million have been derecognized from the balance sheet as of June 30, 2021. The impact of the adjustments to the statement of operations and deferred taxes was not material.
|
3.) |
Under U.S. GAAP, Higi elected to apply the straight-line approach for graded vesting when measuring share- based payment awards. Under IFRS, Babylon would use the graded vesting method, resulting in a higher proportion of cost being allocated to the earlier years. The impact of the adjustments to the statement of operations and deferred taxes was not material.
|
Preliminary Purchase Price Allocation (in 000s)
|
||||
Cash consideration
|
$ | 5,202 | ||
Shares issued as consideration
|
53,553 | |||
Fair value of existing equity interest
|
23,440 | |||
Additional consideration
|
11,565 | |||
|
|
|||
Total consideration transferred
|
|
93,760
|
|
|
Trade and other receivables
|
2,837 | |||
Prepayments and contract assets
|
294 | |||
Other intangible assets
|
31,837 | |||
Trade and other payables and Accruals and provisions
|
(2,303 | ) | ||
Other assets and liabilities, net
|
4,685 | |||
|
|
|||
Net Assets Acquired
|
|
37,350
|
|
|
Amount Allocated to Goodwill
|
$
|
56,410
|
|
(AA) |
Reflects the elimination of the previous investment related to Higi of $12.6 million and the step up to the fair value of prior existing equity interest of $23.4 million. This
step-up
in fair value resulted in a gain of $10.8 million.
|
(BB) |
To reflect the elimination of Higi’s historical equity.
|
(CC) |
To reflect the consideration payment in the form of $5.2 million in cash, shares issued as consideration with an estimated fair value of $53.6 million fair value of existing equity interest of $23.4 million and $11.6 million in deferred consideration, resulting in an addition of goodwill of $56.4 million and $53.6 million in additional paid capital.
|
(DD) |
To reflect the elimination of historical intangible assets of $0.2 million along with the fair value of the intangible assets acquired of $31.9 million along with its respective impact on Deferred Tax Liabilities of $6.1 million. This results in a reduction of the addition to goodwill by $25.8 million. Our preliminary estimate of the weighted average useful lives of the acquired intangible assets was determined to be 7.0 years based on the useful lives assigned to comparable historical acquisitions. The amortization of the intangible assets over a 7.0 year period resulted in an expense of $4.5 million and $2.3 million for the year ended December 31, 2020 and the six months ended June 30, 2021, respectively.
|
(EE) |
This adjustment is to reflect the payment of Higi’s debt using its cash on hand. If the cash on hand is not sufficient, part of the consideration transferred will be used to settle the Related party convertible notes at Closing. This results in a reduction in the cash balance of $5.5 million, elimination of $7.0 million of debt and a reduction of goodwill by $1.5 million.
|
Name
|
Age
|
Position(s)
|
||
Executive Officers
|
||||
Ali Parsadoust
|
56 |
Chief Executive Officer and Director
|
||
Charlie Steel
|
37 |
Chief Financial Officer
|
||
Stacy Saal
|
47 |
Chief Operating Officer
|
||
Paul-Henri Ferrand
|
57 |
Chief Business Officer
|
||
Steve Davis
|
55 |
Chief Technology Officer
|
||
Yon Nuta
|
40 |
Chief Product Officer
|
||
Darshak Sanghavi
|
51 |
Chief Medical Officer
|
||
Employee Directors
|
||||
Mairi Johnson
|
55 |
Chief Partnerships Officer and Director
|
||
Non-Executive
Directors
|
||||
Mohannad AlBlehed
|
35 |
Director
|
||
Per Brilioth
|
51 |
Director
|
||
Georgi Ganev
|
45 |
Director
|
||
David Warren
|
67 |
Director
|
• |
Exemption from filing quarterly reports on Form
10-Q
containing unaudited financial and other specified information or current reports on Form
8-K
upon the occurrence of specified significant events;
|
• |
Exemption from the requirement to comply with Regulation FD, which regulates selective disclosure of material
non-public
information by issuers;
|
• |
Exemption from Section 16 under the Exchange Act, which requires insiders to file public reports of their securities ownership and trading activities and provides for liability for insiders who profit from trades in a short period of time;
|
• |
Exemption from the NYSE rules applicable to domestic issuers requiring disclosure within four business days of any determination to grant a waiver of the code of business conduct and ethics to directors and officers;
|
• |
Exemption from the requirement to obtain shareholder approval for certain issuances of securities, including shareholder approval of share option plans;
|
• |
Exemption from the requirement that our audit committee have review and oversight responsibilities over all “related party transactions,” as defined in Item 7.B of Form
20-F;
|
• |
Exemption from the requirement that our board of directors have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
|
• |
Exemption from the requirements that director nominees are selected, or recommended for selection by our board of directors, either by (i) independent directors constituting a majority of our board’s independent directors in a vote in which only independent directors participate, or (ii) a committee comprised solely of independent directors, and that a formal written charter or board resolution, as applicable, addressing the nominations process is adopted.
|
• |
selects and hires a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;
|
• |
oversees our relationship with the independent registered public accounting firm and assess the effectiveness of the external audit process, including in relation to appointment and tendering, remuneration and other terms of engagement, and appropriate planning ahead of each annual audit cycle;
|
• |
maintains regular, timely, open and honest communication with the external auditors, ensuring the external auditors report to the committee on all relevant matters to enable the committee to carry out its oversight responsibilities;
|
• |
monitors the integrity of our financial and narrative reporting, preliminary announcements and any other formal announcements relating to our financial performance;
|
• |
advises the board on whether, taken as a whole, the Annual Report and accounts are fair, balanced and understandable;
|
• |
reviews the appropriateness and completeness of our risk management and internal controls;
|
• |
considers annually whether we should have an internal audit function;
|
• |
reviews, approves and/or ratifies related party transactions; and
|
• |
approves or, as required,
pre-approves,
all audit and all permissible
non-audit
services, other than de minimis
non-audit
services, to be performed by the independent registered public accounting firm.
|
• |
sets a remuneration policy that is designed to promote our long-term success;
|
• |
ensures that the remuneration of executive directors and other senior executives reflects both their individual performance and their contribution to our overall results;
|
• |
determines the terms of employment and remuneration of executive directors and other senior executives, including recruitment and retention terms;
|
• |
approves the design and performance targets of any annual incentive schemes that include the executive directors and other senior executives;
|
• |
agrees upon the design and performance targets, where applicable, of all share incentive plans;
|
• |
gathers and analyze appropriate data from comparator companies our industry; and
|
• |
selects and appoint external advisers to the remuneration committee, if any, to provide independent remuneration advice where necessary.
|
• |
identifies individuals qualified to become members of our board of directors;
|
• |
recommends to our board of directors the persons to be nominated for election as directors and to each of the committees of our board of directors;
|
• |
reviews and make recommendations to our board of directors with respect to our board leadership structure;
|
• |
reviews and make recommendations to our board of directors with respect to management succession planning; and
|
• |
develops and recommends to our board of directors corporate governance principles.
|
• |
an attempt to transfer, assign or encumber the option (save for a transfer to a personal representative on death);
|
• |
the board of directors determining that any performance target applicable to the option is no longer capable of being met;
|
• |
the date stated in the relevant option certificate;
|
• |
in respect of the unvested portion, upon the option holder’s termination of employment (or, in certain circumstances, the date on which notice of termination is given) for any reason;
|
• |
upon the option holder’s termination of employment (or, in certain circumstances, the date on which notice of termination is given) in certain bad leaver circumstances;
|
• |
unless otherwise determined by the board of directors, one month following an exit event in respect of an option holder whose employment terminated prior to such exit event;
|
• |
within certain defined periods following an exit event other than an initial public offering; or
|
• |
the option holder becoming bankrupt.
|
• |
an attempt to transfer, assign or encumber the option (save for a transfer to a personal representative on death);
|
• |
the date stated in the relevant option certificate;
|
• |
the first anniversary of an option holder’s death;
|
• |
in respect of the unvested portion, upon the option holder’s termination of employment (or the date on which notice of termination is given) for any reason;
|
• |
upon the option holder’s termination of employment (or the date on which notice of termination is given) in certain bad leaver circumstances;
|
• |
6 months after termination of the option holder’s employment in certain good leaver circumstances;
|
• |
within certain defined periods following an exit event other than an initial public offering; or
|
• |
the option holder becoming bankrupt.
|
• |
$70,000 per year for service as a member of our Board of Directors;
|
• |
$30,000 per year for service as
Non-Executive
Chair of our Board of Directors;
|
• |
$20,000 per year for service as chair of our audit committee;
|
• |
$15,000 per year for service as our Lead Independent Director;
|
• |
$15,000 per year for service as chair of our remuneration committee;
|
• |
$10,000 per year for service as a member of our audit committee;
|
• |
$8,000 per year for service as chair of our nominating and governance committee;
|
• |
$7,500 per year for service as a member of our remuneration committee;
|
• |
$4,000 per year for service as a member of our nominating and governance committee.
|
• |
Lockup Agreements;
|
• |
Registration Rights Agreement;
|
• |
Voting and Support Agreements;
|
• |
Director Nomination Agreement; and
|
• |
Subscription Agreements.
|
• |
with the approval of the holders of at least
two-thirds
by nominal value of the issued Class B Ordinary Shares;
|
• |
upon any transfer of the Class B Ordinary Shares to any person (other than to specified permitted transferees of Ali Parsadoust);
|
• |
where any of the Class B Ordinary Shares cease to be beneficially owned at any time by Dr. Ali Parsadoust or any of his permitted transferees;
|
• |
on such date that (i) Dr. Parsadoust (together with any of his permitted transferees) no longer hold at least five per cent of the Class B Ordinary Shares held by Dr. Parsadoust (together with his permitted transferees) at the Closing of the Business Combination and (ii) is either (a) at least 12 months following Dr. Parsadoust’s voluntary resignation as CEO and director of Babylon or (b) at least 12 months following the death or permanent incapacity of Dr. Parsadoust.
|
• |
the maximum number of shares to be purchased;
|
• |
the maximum and minimum prices which may be paid; and
|
• |
a date, not being later than five years after the passing of the resolution, on which the authority to purchase is to expire.
|
• |
acquires an interest in shares of a Code Company that, when taken together with shares in which persons acting in concert with such person are interested, carry 30% or more of the voting rights of the Code Company; or
|
• |
who, together with persons acting in concert with such person, is interested in shares that in the aggregate carry not less than 30% and not more than 50% of the voting rights in the Code, acquires additional interests in shares that increase the percentage of shares carrying voting rights in which that person is interested;
|
• |
the acquirer, and, depending on the circumstances, its concert parties, would be required (except with the consent of the Takeover Panel) to make a cash offer (or provide a cash alternative) for the Code Company’s outstanding shares at a price not less than the highest price paid for any interests in the shares by the acquirer or its concert parties during the previous 12 months.
|
• |
in whole and not in part;
|
• |
at a price of $0.01 per warrant when the price per ordinary share equals or exceeds $18.00;
|
• |
at a price of $0.10 per warrant when the price per ordinary share equals or exceeds $10.00;
|
• |
upon not less than 30 days’ prior written notice of redemption (the
“30-day
redemption period”) to each warrant holder;
|
• |
if, and only if, the reported last sale price of our ordinary shares equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a
30-trading
day period commencing on the date of the consummation of the transactions contemplated by the Merger Agreement and ending three business days before we send the notice of redemption to the warrant holders; and
|
• |
if, and only if, the closing price of our ordinary shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant and the like) for any 20 trading days within the
30-day
period ending three trading days before we send notice of the redemption to the warrant holders.
|
• |
each person, or group of affiliated persons, that beneficially owns 5% or more of our outstanding ordinary shares;
|
• |
each member of our board of directors and each of our other executive officers; and
|
• |
all of our directors and executive officers as a group
|
Class A
ordinary shares
|
Class B
ordinary shares
|
% of Total
Voting Power
(1)
|
||||||||||||||||||
Shares
|
%
|
Shares
|
%
|
|
||||||||||||||||
Name of Beneficial Owner
|
||||||||||||||||||||
Directors and Executive Officers
|
||||||||||||||||||||
Ali Parsadoust
(2)
|
76,512,016 | 18.7 | % | 79,637,576 | 19.4 | % | 83.4 | % | ||||||||||||
Charlie Steel
(3)
|
— | — | — | — | — | |||||||||||||||
Stacy Saal
|
— | — | — | — | — | |||||||||||||||
Paul-Henri Ferrand
(4)
|
1,908,013 | * | — | — | * | |||||||||||||||
Steve Davis
(5)
|
1,332,071 | * | — | — | * | |||||||||||||||
Darshak Sanghavi
|
— | — | — | — | — | |||||||||||||||
Yon Nuta
|
— | — | — | — | — | |||||||||||||||
Mohannad AlBlehed
|
— | — | — | — | — | |||||||||||||||
Per Brilioth
(6)
|
— | — | — | — | — | |||||||||||||||
Georgi Ganev
|
— | — | — | — | — | |||||||||||||||
Mairi Johnson
(7)
|
— | — | — | — | — | |||||||||||||||
David Warren
|
— | — | — | — | — | |||||||||||||||
All executive officers and directors as a group (12 persons)
|
79,752,100 | 19.3 | % | 79,637,576 | 19.4 | % | 83.4 | % | ||||||||||||
5% or more Holders
|
||||||||||||||||||||
Invik S.A.
(8)
|
54,942,568 | 13.4 | % | — | — | 3.6 | % | |||||||||||||
Entities affiliated with VNV Global AB (publ)
(9)
|
54,334,279 | 13.3 | % | — | — | 3.6 | % | |||||||||||||
Public Investment Fund
(10)
|
35,410,789 | 8.6 | % | — | — | 2.3 | % | |||||||||||||
Hanging Gardens Limited
(11)
|
21,830,250 | 5.3 | % | — | — | 1.4 | % |
* |
Represents beneficial ownership of less than one percent (1%) of the outstanding ordinary shares.
|
(1) |
Percentage of total voting power represents voting power with respect to all shares of our Class A ordinary shares and Class B ordinary shares, voting together as a single class. The holders of our Class B ordinary shares are entitled to fifteen (15) votes per share, and holders of our Class A ordinary shares are entitled to one vote per share. See the section titled “
Description of Share Capital and Articles of Association—Voting Rights
|
(2) |
Consists of (i) 76,512,016 Class A ordinary shares held of record by ALP Partners Limited and (ii) 79,637,576 Class B ordinary shares held of record by ALP Partners Limited. ALP Partners Limited is an entity owned and controlled by Dr. Ali Parsadoust. Mairi Johnson is Dr. Parsadoust’s spouse and thus may be deemed to beneficially own the shares held by Dr. Parsadoust.
|
(3) |
Excludes 1,350,009 Class A Ordinary Shares held by Ocorian Trustees (Jersey) Limited (as trustee of the Babylon Holdings Limited Employee Benefit Trust), an employee benefit trust, for the benefit of Charles Steel. Charles Steel granted a voting power of attorney over his Class A ordinary shares to Babylon Holdings Limited as a result of which Babylon Holdings Limited has voting control over such shares. Neither Babylon Holdings Limited nor Ocorian Trustees (Jersey) Limited (as trustee of the Babylon Holdings Limited Employee Benefit Trust) has dispositive control over the Class A ordinary shares held by Charles Steel.
|
(4) |
Consists of (i) 390,651 Class A ordinary shares and (ii) 1,517,362 Class A ordinary shares issuable upon the exercise of options held of record by Paul-Henri Ferrand.
|
(5) |
Consists of (i) 427,347 Class A ordinary shares and (ii) 904,724 Class A ordinary shares issuable upon the exercise of options held of record by Steve Davis.
|
(6) |
Per Brilioth is the Managing Director and a member of the Board of Directors of VNV Global AB (publ), VNV Sweden AB and Global Health Equity AB (publ). Mr. Brilioth disclaims any beneficial ownership of the shares described in footnote 9, except to the extent of any pecuniary interest therein.
|
(7) |
Mairi Johnson is Dr. Parsadoust’s spouse and thus may be deemed to beneficially own the shares held by Dr. Parsadoust described in footnote 2.
|
(8) |
Consists of 54,942,568 Class A ordinary shares held of record by Invik S.A., a wholly owned subsidiary of Kinnevik AB (publ), a Swedish publicly traded company. The address for Invik S.A. is 7 Avenue Jean-Pierre Pescatore, 2324 Luxembourg.
|
(9) |
Consists of (i) 36,588,975 Class A ordinary shares held of record by VNV (Cyprus) Limited, a wholly-owned subsidiary of VNV Global AB (publ), a Swedish publicly traded company, (ii) 17,745,304 Class A ordinary shares held of record by Global Health Equity (Cyprus) Ltd., (iii) 2,130,310 Class A ordinary shares held of record by Photenalo Limited and (iv) 531,161 Class A ordinary shares held of record by Atlas Peak Capital II, L.P. VNV Global AB (publ) is the direct and sole shareholder of VNV (Cyprus) Limited. Investment and voting decisions relating to holdings of VNV (Cyprus) Limited are made by a board of directors consisting of four individuals on the basis of recommendations issued by a five-member board of directors of VNV Global AB (publ). VNV Global AB (publ) indirectly holds, through its direct wholly-owned subsidiary VNV Sweden AB, 37.35% of the shares in Global Health Equity AB (publ), with the remainder held by other foreign institutional investors and individuals. VNV Global AB (publ) is the direct and sole shareholder of VNV Sweden AB. Investment decisions relating to holdings of VNV Sweden AB are made by a board of directors consisting of three individuals on the basis of recommendations issued by a five-member board of directors of VNV Global AB (publ), Global Healthy Equity AB (publ) is the direct and sole shareholder of Global Health Equity (Cyprus) Ltd. Investment decisions relating to holdings of Global Health Equity (Cyprus) Ltd are taken by a board of directors that consists of PC Nordic Administration Limited, a third-party corporate services provider, taking into account recommendations issued by a three-member board of directors of Global Health Equity AB (publ). The Global Health Equity AB (publ) board is comprised of the management of VNV Global AB (publ). Phonetalo Limited and Atlas Peak Capital II, L.P. each granted a voting power of attorney over their respective Class A ordinary shares to VNV (Cyprus) Limited and agreed to vote their shares consistent with VNV (Cyprus ) Limited or as directed by its board, and, as a result of the relationship described in this footnote, VNV Global AB (publ) has voting control over such shares until such time as VNV (Cyprus) Limited no longer holds Class A ordinary shares. VNV Global AB (publ) does not have dispositive control over the Class A ordinary shares held by either Photenalo Limited or Atlas Peak Capital II, L.P. The address for VNV (Cyprus) Limited is 1, Lampousas Street, 1095 Nicosia, Cyprus, and the address of Global Health Equity (Cyprus) Ltd is Stasikratous, 22, Olga Court, Office 104, 1065 Nicosia, Cyprus. Each of the other members of the respective boards of directors of VNV Global AB (publ), VNV (Cyprus) Limited, VNV Sweden AB, Global Health Equity AB (publ) and Global Health Equity (Cyprus) Ltd
|
disclaim beneficial ownership of the shares described in this footnote 9, except to the extent of any pecuniary interest therein. |
(10) |
Consists of 35,410,789 Class A ordinary shares held of record by the Public Investment Fund, an integral part of the Kingdom of Saudi Arabia. The board of directors of the Public Investment Fund consists of His Royal Highness Mohammad bin Salman
Al-Saud
(Chairman), H.E. Ibrahim Abdulaziz
Al-Assaf,
H.E. Mohammad Abdul Malek Al Shaikh, H.E. Khalid Abdulaziz
Al-Falih,
H.E. Dr. Majid Bin Abdullah Al Qasabi, H.E. Mohammad Abdullah
Al-Jadaan,
H.E. Mohamed Mazyed Altwaijri, H.E. Ahmed Aqeel
Al-Khateeb,
and H.E. Yasir Othman
Al-Rumayyan.
All voting and investment decisions over the shares held by the Public Investment Fund are made by a majority vote of applicable investment committees and /or the board of directors, as applicable. As a result, no single person controls investment or voting decisions with respect to the shares held by the Public Investment Fund. The address for the Public Investment Fund is Alr’idah Digital City, Building MU04, Al Nakhil District, P.O. Box 6847, Riyadh 11452, The Kingdom of Saudi Arabia.
|
(11) |
Consists of 21,830,250 Class A ordinary shares held of record by Hanging Gardens Limited. The address of Hanging Gardens Limited is Little Denmark Building, P.O. Box 4585, Road Town, Tortola, British Virgin Islands.
|
Ordinary Shares Beneficially
Owned Prior to Offering |
Ordinary
Shares
Being
Offered
|
Ordinary Shares Beneficially
Owned After the Registered Shares are Sold
(1)
|
||||||||||||||||||
Name of Registered Holder
|
Class A
ordinary
shares |
Class B
ordinary
shares |
Number
|
Percent
|
||||||||||||||||
Ali Parsadoust
(2)
|
76,512,016 | 79,637,576 | 156,149,592 | — | — | |||||||||||||||
Paul-Henri Ferrand
|
1,908,013 |
(3)
|
— | 390,651 |
(4)
|
1,517,362 | * | |||||||||||||
Steve Davis
|
1,332,071 |
(5)
|
— | 427,347 |
(6)
|
904,724 | * | |||||||||||||
Invik S.A.
(7)
|
54,942,568 | — | 54,942,568 | — | — | |||||||||||||||
VNV (Cyprus) Limited
(8)
|
36,588,975 | — | 36,588,975 | — | — | |||||||||||||||
Global Heath Equity (Cyprus) Ltd.
(9)
|
17,745,304 | — | 17,745,304 | — | — | |||||||||||||||
Public Investment Fund
(10)
|
35,410,789 | — | 35,410,789 | — | — | |||||||||||||||
Hanging Gardens Limited
(11)
|
21,830,250 | — | 21,830,250 | — | — | |||||||||||||||
Alkuri Sponsors LLC
(12)
|
15,147,361 | — | 15,147,361 | — | — | |||||||||||||||
Palantir Technologies Inc.
(13)
|
3,500,000 | — | 3,500,000 | — | — | |||||||||||||||
AMF Pensions for Sakring AB
(14)
|
6,000,000 | — | 6,000,000 | — | — | |||||||||||||||
Swedbank Robur Fonder AB
(15)
|
5,000,000 | — | 5,000,000 | — | — | |||||||||||||||
The Fourth Swedish National Pension Fund
(16)
|
1,200,000 | — | 1,200,000 | — | — | |||||||||||||||
SEB Life International Assurance Company DAC
(17)
|
2,500,000 | — | 2,500,000 | — | — | |||||||||||||||
Black Ice Capital Limited
(18)
|
500,000 | — | 500,000 | — | — | |||||||||||||||
Consensus Asset Management AB
(19)
|
316,000 | — | 316,000 | — | — | |||||||||||||||
Nordnet Pensions For Sakring AB
(20)
|
884,000 | — | 884,000 | — | — | |||||||||||||||
Phonetalo Limited
(21)
|
2,130,310 | — | 2,130,310 | — | — | |||||||||||||||
Atlas Peak Capital II, L.P.
(22)
|
531,161 | — | 531,161 | — | — | |||||||||||||||
Other shareholders
(23)
|
9,335,972 | — | 9,335,972 | — | — |
* |
Represents beneficial ownership of less than one percent (1%) of the outstanding ordinary shares.
|
(1) |
Percentage of total voting power represents voting power with respect to all shares of our Class A ordinary shares and Class B ordinary shares, voting together as a single class. The holders of our Class B ordinary shares are entitled to 15 votes per share, and holders of our Class A ordinary shares are entitled to one vote per share. See the section titled “Description of Share Capital and Articles of Association—Voting Rights” for additional information about the voting rights of our Class A ordinary shares and Class B ordinary shares.
|
(2) |
Consists of (i) 76,512,016 Class A ordinary shares held of record by ALP Partners Limited and (ii) 79,637,576 Class B ordinary shares held of record by ALP Partners Limited. ALP Partners Limited is an entity owned and controlled by Dr. Ali Parsadoust. Mairi Johnson is Dr. Parsadoust’s spouse and thus may be deemed to beneficially own the shares held by Dr. Parsadoust.
|
(3) |
Consists of (i) 390,651 Class A ordinary shares and (ii) 1,517,362 Class A ordinary shares issuable upon the exercise of options held of record by Paul-Henri Ferrand.
|
(4) |
Consists of 390,651 Class A ordinary shares held of record by Paul-Henri Ferrand.
|
(5) |
Consists of (i) 427,347 Class A ordinary shares and (ii) 904,724 Class A ordinary shares issuable upon the exercise of options held of record by Steve Davis.
|
(6) |
Consists of (i) 427,347 Class A ordinary shares held of record by Steve Davis.
|
(7) |
Consists of 54,942,568 Class A ordinary shares held of record by Invik S.A., a wholly owned subsidiary of Kinnevik AB (publ), a Swedish publicly traded company. The address for Invik S.A. is 7 Avenue Jean-Pierre Pescatore, 2324 Luxembourg.
|
(8) |
Consists of 36,588,975 Class A ordinary shares held of record by VNV (Cyprus) Limited, a wholly-owned subsidiary of VNV Global AB (publ), a Swedish publicly traded company. VNV Global AB (publ) is the direct and sole shareholder of VNV (Cyprus) Limited. Investment and voting decisions relating to holdings of VNV (Cyprus) Limited are made by a board of directors consisting of four individuals on the basis of recommendations issued by a five-member board of directors of VNV Global AB (publ). The address for VNV (Cyprus) Limited is 1 Lampousas Street, 1095 Nicosia, Cyprus. Each of the members of the respective boards of directors of VNV Global AB (publ) and VNV (Cyprus) Limited disclaim beneficial ownership of the shares described in this footnote 8, except to the extent of any pecuniary interest therein.
|
(9) |
Consists of 17,745,304 Class A ordinary shares held of record by Global Health Equity (Cyprus) Ltd. VNV Global AB (publ) indirectly holds, through its direct wholly-owned subsidiary VNV Sweden AB, 37.35% of the shares in Global Health Equity AB (publ), with the remainder held by other foreign institutional investors and individuals. VNV Global AB (publ) is the direct and sole shareholder of VNV Sweden AB. Investment decisions relating to holdings of VNV Sweden AB are made by a board of directors consisting of three individuals on the basis of recommendations issued by a five-member board of directors of VNV Global AB (publ), Global Healthy Equity AB (publ) is the direct and sole shareholder of Global Health Equity (Cyprus) Ltd. Investment decisions relating to holdings of Global Health Equity (Cyprus) Ltd are taken by a board of directors that consists of PC Nordic Administration Limited, a third-party corporate services provider, taking into account recommendations issued by a three-member board of directors of Global Health Equity AB (publ). The Global Health Equity AB (publ) board is comprised of the management of VNV Global AB (publ). Phonetalo Limited and Atlas Peak Capital II, L.P. each granted a voting power of attorney over their respective Class A ordinary shares to VNV (Cyprus) Limited and agreed to vote their shares consistent with VNV (Cyprus) Limited or as directed by its board, and, as a result of the relationship described in this footnote, VNV Global AB (publ) has voting control over such shares until such time as VNV (Cyprus) Limited no longer holds Class A ordinary shares. VNV Global AB (publ) does not have dispositive control over the Class A ordinary shares held by either Photenalo Limited or Atlas Peak Capital II, L.P. The address for Global Health Equity (Cyprus) Ltd. is Stasikratous, 22, Olga Court, Office 104, 1065 Nicosia, Cyprus. Each of the members of the respective boards of directors of VNV Global AB (publ), VNV (Cyprus) Limited, VNV Sweden AB, Global Health Equity AB (publ) and Global Health Equity (Cyprus) Ltd disclaim beneficial ownership of the shares described in this footnote 9, except to the extent of any pecuniary interest therein.
|
(10) |
Consists of 35,410,789 Class A ordinary shares held of record by the Public Investment Fund, an integral part of the Kingdom of Saudi Arabia. The board of directors of the Public Investment Fund consists of His Royal Highness Mohammad bin Salman
Al-Saud
(Chairman), H.E. Ibrahim Abdulaziz
Al-Assaf,
H.E. Mohammad Abdul Malek Al Shaikh, H.E. Khalid Abdulaziz
Al-Falih,
H.E. Dr. Majid Bin Abdullah Al
|
Qasabi, H.E. Mohammad Abdullah
Al-Jadaan,
H.E. Mohamed Mazyed Altwaijri, H.E. Ahmed Aqeel
Al-Khateeb,
and H.E. Yasir Othman
Al-Rumayyan.
All voting and investment decisions over the shares held by the Public Investment Fund are made by a majority vote of applicable investment committees and /or the board of directors, as applicable. As a result, no single person controls investment or voting decisions with respect to the shares held by the Public Investment Fund. The address for the Public Investment Fund is Alr’idah Digital City, Building MU04, Al Nakhil District, P.O. Box 6847, Riyadh 11452, The Kingdom of Saudi Arabia.
|
(11) |
Consists of 21,830,250 Class A ordinary shares held of record by Hanging Gardens Limited. The address of Hanging Gardens Limited is Little Denmark Building, P.O. Box 4585, Road Town, Tortola, British Virgin Islands.
|
(12) |
Consists of (i) 8,914,028 Class A ordinary shares held of record by or for the benefit of Alkuri Sponsors LLC, (ii) 5,933,333 Class A ordinary shares issuable upon the exercise of warrants held of record by Alkuri Sponsors LLC, (iii) 150,000 Class A ordinary shares held of record by Envst Opportunities 2 LLC, and (iv) 150,000 Class A ordinary shares held of record by Works Capital LLC. The address of Alkuri Sponsors LLC is 4235 Hillsboro Pike STE 300, Nashville TN, United States 37215-3344. The address of Envst Opportunities 2 LLC is 1006 Laurel Way, Beverly Hills CA, United States 90210. The address of Works Capital LLC is 4235 Hillsboro Pike, Ste 300, Nashville TN, United States 37215-3344.
|
(13) |
Consists of 3,500,000 Class A ordinary shares held of record by Palantir Technologies Inc. The address of Palantir Technologies Inc. is 1555 Blake Street, ste. 250, Denver CO, United States 80202.
|
(14) |
Consists of 6,000,000 Class A ordinary shares held of record by AMF Pensions for Sakring AB. The address of AMF Pensions for Sakring AB is Klara Sodra Kyrkogata 18, 113 88 Stockholm, Sweden.
|
(15) |
Consists of 5,000,000 Class A ordinary shares held of record by Swedbank Robur Fonder AB. The address of Swedbank Robur Fonder AB is NY Teknik, Landsvagen 40, 172 63 Sundbyberg, Sweden.
|
(16) |
Consists of 1,200,000 Class A ordinary shares held of record by The Fourth Swedish National Pension Fund. The address of The Fourth Swedish National Pension Fund is BOX 3069, 103 61 Stockholm, Sweden.
|
(17) |
Consists of 2,500,000 Class A ordinary shares held of record by SEB Life International Assurance Company DAC. The address of SEB Life International Assurance Company DAC is Bloodstone Building, Sir John Rogerson’s Quay, Dublin 2, Ireland.
|
(18) |
Consists of 500,000 Class A ordinary shares held of record by Black Ice Capital Limited. The address of Black Ice Capital Limited is 1ST & 2ND floors Elisabeth House, Les Rouettes Brayes GY, 11 EW, St Peter Port, Guernsey.
|
(19) |
Consists of 316,000 Class A ordinary shares held of record by Consensus Asset Management AB. The address of Consensus Asset Management AB is Krokslatts Parkgata 4, 431 68 Molndal, Sweden.
|
(20) |
Consists of 884,000 Class A ordinary shares held of record by Nordnet Pensions for Sakring AB. The address of Nordnet Pensions for Sakring AB is BOX 30068 SE, 104 25 Stockholm, Sweden.
|
(21) |
Consists of 2,130,310 Class A ordinary shares held of record by Photenalo Limited. The address of Photenalo Limited is Themistokli Dervi, 5n Elenion Building, 1068, Nicosia, Cyprus.
|
(22) |
Consists of 531,161 Class A ordinary shares held of record by Atlas Peak Capital II, L.P. The address of Atlas Peak Capital II, L.P. is 850 New Burton Road, Suire 201, Dover, Delaware 19904, USA.
|
(23) |
Consists of (i) 710,972 Class A ordinary shares and (ii) 8,625,000 Class A ordinary shares issuable upon the exercise of our public warrants trading on the NYSE under the symbol “BBLN.WS.”
|
• |
directly by the Registered Holders,
|
• |
to or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, commissions or agent’s commissions from the selling securityholders or the purchasers of the Registered Shares,
|
• |
through trading plans entered into by a Registered Holder pursuant to Rule 10b5-1 under the Exchange Act that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans,
|
• |
ordinary brokerage transactions and transactions in which the broker solicits purchasers,
|
• |
block trades in which the broker-dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction,
|
• |
directly to purchasers, including through a specific bidding, auction or other process or in privately negotiated transactions,
|
• |
any other method permitted pursuant to applicable law, and
|
• |
a combination of any such methods of sale.
|
• |
fixed prices;
|
• |
prevailing market prices at the time of sale;
|
• |
prices related to such prevailing market prices;
|
• |
varying prices determined at the time of sale; or
|
• |
negotiated prices.
|
• |
on any securities exchange or quotation service on which the Registered Shares may be listed or quoted at the time of sale, including the NYSE
|
• |
in the
over-the-counter
|
• |
in transactions otherwise than on such exchanges or services or in the
over-the-counter
|
• |
any other method permitted by applicable law; or
|
• |
through any combination of the foregoing.
|
Expense
|
Amount
|
|||
SEC registration fee
|
$ | 335,582 | ||
Printing expenses
|
200,000 | |||
Legal fees and expenses
|
275,000 | |||
Accounting fees and expenses
|
275,000 | |||
Miscellaneous
|
114,418 | |||
|
|
|||
Total
|
$ | 1,200,000 | ||
|
|
Page
|
||||
Babylon Holdings Limited Condensed Unaudited Consolidated Financial Statements
|
||||
F-4
|
||||
F-5
|
||||
F-6
|
||||
F-7
|
||||
F-9
|
Babylon Holdings Limited Audited Consolidated Financial Statements
|
||||
F-31
|
||||
F-32
|
||||
F-33
|
||||
F-34
|
||||
F-35
|
||||
F-36
|
higi SH Holdings, Inc. Condensed Unaudited Consolidated Interim Financial Statements
|
||||
F-78
|
||||
F-80
|
||||
F-81
|
||||
F-82
|
||||
F-83
|
higi SH Holdings, Inc. Audited Consolidated Financial Statements
|
||||
F-93
|
||||
F-94
|
||||
F-96
|
||||
F-97
|
||||
F-98
|
||||
F-99
|
Alkuri Global Acquisition Corp. Audited Financial Statements
|
||||
F-120
|
||||
F-121
|
||||
F-122
|
||||
F-123
|
||||
F-124
|
||||
F-125
|
Alkuri Global Acquisition Corp. Unaudited Condensed Financial Statements
|
||||
F-136
|
||||
F-137
|
||||
F-138
|
||||
F-139
|
||||
F-140
|
For the Six Months Ended June 30,
|
||||||||||||
2021
|
2020
|
|||||||||||
Notes |
$’000
|
$’000
|
||||||||||
Revenue
|
5 | 128,771 | 22,503 | |||||||||
Cost of care delivery
|
(92,137 | ) | (18,820 | ) | ||||||||
Platform & application expenses (including amortization & impairment of $8,995 thousand (2020: $5,085 thousand))
|
(21,377 | ) | (12,898 | ) | ||||||||
Research & development expenses (excluding amortization and impairment)
|
(17,201 | ) | (20,881 | ) | ||||||||
Sales, general & administrative expenses
|
(76,606 | ) | (52,762 | ) | ||||||||
|
|
|
|
|||||||||
Operating loss
|
(78,550 | ) | (82,858 | ) | ||||||||
Finance costs
|
(2,243 | ) | (2,569 | ) | ||||||||
Finance income
|
28 | 6 | ||||||||||
Exchange (loss)
|
(91 | ) | (2,146 | ) | ||||||||
|
|
|
|
|||||||||
Net finance (expense)
|
(2,306 | ) | (4,709 | ) | ||||||||
Gain on sale of subsidiary
|
4 | 3,917 | — | |||||||||
Share of loss of equity-accounted investees
|
(1,276 | ) | (309 | ) | ||||||||
|
|
|
|
|||||||||
Loss before taxation
|
(78,215 | ) | (87,876 | ) | ||||||||
|
|
|
|
|||||||||
Tax benefit / (provision)
|
2,493 | (2,937 | ) | |||||||||
|
|
|
|
|||||||||
Loss for the period
|
|
(75,722
|
)
|
|
(90,813
|
)
|
||||||
|
|
|
|
|||||||||
Other comprehensive loss
|
||||||||||||
Items that may be reclassified subsequently to profit or loss:
|
||||||||||||
Currency translation differences
|
(67 | ) | 1,530 | |||||||||
|
|
|
|
|||||||||
Other comprehensive (loss) / gain for the period, net of income tax
|
(67 | ) | 1,530 | |||||||||
|
|
|
|
|||||||||
Total comprehensive loss for the period
|
|
(75,789
|
)
|
|
(89,283
|
)
|
||||||
|
|
|
|
|||||||||
Loss attributable to:
|
||||||||||||
Equity holders of the parent
|
(74,907 | ) | (89,984 | ) | ||||||||
Non-controlling
interest
|
(815 | ) | (829 | ) | ||||||||
|
|
|
|
|||||||||
|
(75,722
|
)
|
|
(90,813
|
)
|
|||||||
|
|
|
|
|||||||||
Total comprehensive loss attributable to:
|
||||||||||||
Equity holders of the parent
|
(74,974 | ) | (88,454 | ) | ||||||||
Non-controlling
interest
|
(815 | ) | (829 | ) | ||||||||
|
|
|
|
|||||||||
|
(75,789
|
)
|
|
(89,283
|
)
|
|||||||
|
|
|
|
|||||||||
Loss per share
|
||||||||||||
Net loss per share, Basic and Diluted
|
(0.09 | ) | (0.11 | ) |
Share
capital |
Share
premium |
Share-based
payment reserve |
Retained
earnings |
Foreign exchange
revaluation reserve |
Equity
attributable to owners of the parent company |
Non-
controlling
Interest |
Total equity
|
|||||||||||||||||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
|||||||||||||||||||||||||
Balance at January 1, 2020
|
13 | 443,125 | 15,268 | (282,705 | ) | (1,904 | ) | 173,797 | — | 173,797 | ||||||||||||||||||||||
Total comprehensive loss for the period
|
||||||||||||||||||||||||||||||||
Loss for the period
|
— |
|
—
|
|
|
—
|
|
(89,984 | ) | — | (89,984 | ) | (829 | ) | (90,813 | ) | ||||||||||||||||
Foreign exchange movement
|
— |
|
—
|
|
|
—
|
|
— | 1,530 | 1,530 | — | 1,530 | ||||||||||||||||||||
Equity raise
|
— | — |
|
—
|
|
|
—
|
|
— | — |
|
—
|
|
— | ||||||||||||||||||
Equity-settled share-based payment transactions
|
— |
|
—
|
|
6,339 |
|
—
|
|
|
—
|
|
6,339 |
|
—
|
|
6,339 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at June 30, 2020
|
|
13
|
|
|
443,125
|
|
|
21,607
|
|
|
(372,689
|
)
|
|
(374
|
)
|
|
91,682
|
|
|
(829
|
)
|
|
90,853
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at January 1, 2021
|
13 | 485,221 | 32,185 | (469,504 | ) | 1,675 | 49,590 | (1,231 | ) | 48,359 | ||||||||||||||||||||||
Total comprehensive loss for the period
|
||||||||||||||||||||||||||||||||
Loss for the period
|
— | — | — | (74,907 | ) | — | (74,907 | ) | (815 | ) | (75,722 | ) | ||||||||||||||||||||
Foreign exchange movement
|
— | — | — | — | (67 | ) | (67 | ) | — | (67 | ) | |||||||||||||||||||||
Conversion of convertible debt
|
1 | 69,999 | — | — | — | 70,000 | — | 70,000 | ||||||||||||||||||||||||
Warrants issued as consideration
|
— | 2,349 | — | — | — | 2,349 | — | 2,349 | ||||||||||||||||||||||||
Equity-settled share-based payment transactions
|
— | — | 13,101 | — | — | 13,101 | — | 13,101 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at June 30, 2021
|
|
14
|
|
|
557,569
|
|
|
45,286
|
|
|
(544,411
|
)
|
|
1,608
|
|
|
60,066
|
|
|
(2,046
|
)
|
|
58,020
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30,
|
||||||||||||
2021
|
2020
|
|||||||||||
Notes |
$’000
|
$’000
|
||||||||||
Cash flows from operating activities
|
||||||||||||
Loss for the period
|
(75,722 | ) | (90,813 | ) | ||||||||
Adjustments for:
|
||||||||||||
Finance costs
|
2,243 | 2,569 | ||||||||||
Finance income
|
(28 | ) | (6 | ) | ||||||||
Depreciation and amortization
|
7 | 13,322 | 6,459 | |||||||||
Share-based compensation
|
12,344 | 433 | ||||||||||
Taxation
|
(2,493 | ) | 2,937 | |||||||||
Exchange loss
|
91 | 2,146 | ||||||||||
Gain on disposal of subsidiary
|
(3,917 | ) | — | |||||||||
Impairment expense
|
7 | — | 32 | |||||||||
Share of net loss of associates and joint ventures accounted for using the equity method
|
1,276 | 309 | ||||||||||
|
|
|
|
|||||||||
(52,884) | (75,934) | |||||||||||
Working capital adjustments
|
||||||||||||
(Increase) in trade and other receivables
|
(12,414 | ) | (8,291 | ) | ||||||||
Increase/(Decrease) in trade and other payables
|
5,9,10 | 43,604 | (3,166 | ) | ||||||||
Decrease in assets/liabilities held for sale
|
1,460 | — | ||||||||||
Decrease in other assets/liabilities
|
768 | — | ||||||||||
|
|
|
|
|||||||||
Net cash used in operating activities
|
(19,466 | ) | (87,391 | ) | ||||||||
|
|
|
|
|||||||||
Cash flows from investing activities
|
||||||||||||
Capital expenditure
|
(2,444 | ) | (460 | ) | ||||||||
Interest received
|
7 | 6 | ||||||||||
Development costs capitalized
|
(16,254 | ) | (18,138 | ) | ||||||||
Acquisition of subsidiary, net of cash acquired
|
3 | (13,835 | ) | — | ||||||||
Proceeds from sale of investment in subsidiary
|
2,213 | — | ||||||||||
Purchase of shares in associates and joint ventures
|
(5,000 | ) | (5,000 | ) | ||||||||
|
|
|
|
|||||||||
Net cash used in investing activities
|
(35,313 | ) | (23,592 | ) | ||||||||
|
|
|
|
|||||||||
Cash flows from financing activities
|
||||||||||||
Proceeds from other loans
|
116 | 357 | ||||||||||
Payments from exercise of share options
|
(482 | ) | — | |||||||||
Net proceeds from issue of share capital
|
— | 1 | ||||||||||
Fees directly attributable to equity raise
|
— | (10,245 | ) | |||||||||
Principle payments on leases
|
(2,293 | ) | (782 | ) | ||||||||
Interest paid
|
(1,826 | ) | (2,338 | ) | ||||||||
|
|
|
|
|||||||||
Net cash outflow from financing activities
|
(4,485 | ) | (13,007 | ) | ||||||||
|
|
|
|
|||||||||
Net (decrease) in cash and cash equivalents
|
(59,264 | ) | (123,990 | ) | ||||||||
Cash and cash equivalents at January 1
|
101,757 | 214,888 | ||||||||||
Effect of movements in exchange rate on cash held
|
(112 | ) | (702 | ) | ||||||||
|
|
|
|
|||||||||
Cash and cash equivalents at June 30
|
|
42,381
|
|
|
90,196
|
|
||||||
|
|
|
|
For the Six Months Ended June 30,
|
||||||||
2021
|
2020
|
|||||||
$’000
|
$’000
|
|||||||
Non-cash
financing and investing activities:
|
||||||||
Warrants issued as consideration for acquisitions
|
2,340 | — | ||||||
Conversion of Loan Agreements
|
70,000 | — |
1.
|
Corporate information
|
2.
|
Basis of preparation
|
3.
|
Business Acquisitions
|
2021
|
||||
$’000
|
||||
Cash paid, net of cash acquired
|
13,835 | |||
Issuance of warrants
|
2,349 | |||
|
|
|||
Aggregate purchase price
|
|
16,184
|
|
|
Accounts receivable
|
1,534 | |||
Customer relationships
|
10,800 | |||
Physician’s network
|
3,500 | |||
Trademark
|
1,900 | |||
License
|
590 | |||
Healthcare related liabilities
|
(11,247 | ) | ||
Other assets and liabilities, net
|
(4,364 | ) | ||
|
|
|||
Net assets acquired
|
|
2,713
|
|
|
|
|
|||
Amount allocated to goodwill
|
|
13,471
|
|
4.
|
Disposals of Subsidiaries
|
2021
|
||||
$’000
|
||||
Cash and cash equivalents
|
(57 | ) | ||
Prepayments and contract assets
|
(1,322 | ) | ||
Property, plant and equipment
|
(922 | ) | ||
Right-of-use
|
(797 | ) |
2021
|
||||
$’000
|
||||
Trade and other receivables
|
(619 | ) | ||
Accruals and provisions
|
658 | |||
Lease liabilities
|
837 | |||
Borrowings
|
3,075 | |||
Trade and other payables
|
588 | |||
|
|
|||
Net Assets and Liabilities Derecognised
|
|
1,441
|
|
|
|
|
|||
Consideration Received
|
2,344 | |||
2021
|
||||
$’000
|
||||
Gain on Disposal
|
||||
Consideration received
|
2,344 | |||
Net assets and liabilities derecognised
|
1,441 | |||
Working capital adjustment
|
132 | |||
|
|
|||
Gain on disposal
|
|
3,917
|
|
|
|
|
5.
|
Revenue
|
For the Six Months Ended June 30,
|
||||||||
2021
|
2020
|
|||||||
$’000
|
$’000
|
|||||||
Clinical services
|
18,134 | 12,149 | ||||||
Software licensing
|
44,245 | 10,354 | ||||||
Value based care
|
66,392 | — | ||||||
|
|
|
|
|||||
|
128,771
|
|
|
22,503
|
|
|||
|
|
|
|
June 30,
2021 |
December 31,
2020 |
|||||||
$’000
|
$’000
|
|||||||
Trade receivables
|
10,951 | 4,674 | ||||||
Contract assets
|
2,491 | 2,378 | ||||||
Contract liabilities
|
(105,118 | ) | (76,018 | ) |
Remainder
of 2021 |
2022
|
2023
|
2024
|
2025
and beyond |
Total
|
|||||||||||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
|||||||||||||||||||
At June 30, 2021
|
13,317 | 19,791 | 19,246 | 19,833 | 32,931 | 105,118 |
2021
|
||||
$’000
|
||||
Balance on January 1
|
76,018 | |||
Amounts billed but not recognized
|
70,728 | |||
Revenue recognized
|
(41,628 | ) | ||
|
|
|||
Balance on June 30
|
|
105,118
|
|
|
|
|
6.
|
Segment Information
|
Six Months Ended June 30, 2021
|
||||||||||||||||||||||||
UK
|
US
|
All other
segments |
Total
segments |
Reconciliation
adjustments |
Total
as per
statement of profit and loss |
|||||||||||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
|||||||||||||||||||
Revenue
|
56,616 | 72,071 | 904 | 129,591 | (820 | ) | 128,771 | |||||||||||||||||
Inter-segment revenue
|
— | — | (50 | ) | (50 | ) | 50 | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment revenue
|
56,616 | 72,071 | 854 | 129,541 | (770 | ) | 128,771 |
Six Months Ended June 30, 2021
|
||||||||||||||||||||||||
UK
|
US
|
All other
segments |
Total
segments |
Reconciliation
adjustments |
Total
as per
statement of profit and loss |
|||||||||||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
|||||||||||||||||||
Cost of care delivery
|
(20,545 | ) | (75,951 | ) | (938 | ) | (97,434 | ) | 5,297 | (92,137 | ) | |||||||||||||
Other operating expenses, excluding amortization and depreciation
|
(59,667 | ) | (32,976 | ) | (6,173 | ) | (98,816 | ) | (3,046 | ) | (101,862 | ) | ||||||||||||
Exchange (loss)/gain
|
(182 | ) | (70 | ) | 2,348 | 2,095 | (2,187 | ) | (91 | ) | ||||||||||||||
Share of loss of equity-accounted investees
|
— | (1,276 | ) | — | (1,276 | ) | — | (1,276 | ) | |||||||||||||||
Gain / (loss) on sale
|
(2,390 | ) | — | 3,880 | 1,490 | 2,427 | 3,917 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBITDA
|
|
(26,168
|
)
|
|
(38,202
|
)
|
|
(29
|
)
|
|
(64,399
|
)
|
|
1,721
|
|
|
(62,678
|
)
|
||||||
|
|
|||||||||||||||||||||||
Depreciation and amortization
|
(13,322 | ) | ||||||||||||||||||||||
Exchange loss/(gain)
|
91 | |||||||||||||||||||||||
Share of loss of equity-accounted investees
|
1,276 | |||||||||||||||||||||||
(Gain) / loss on sale
|
(3,917 | ) | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Operating loss
|
|
(78,550
|
)
|
|||||||||||||||||||||
|
|
|||||||||||||||||||||||
Six Months Ended June 30, 2020
|
||||||||||||||||||||||||
UK
|
US
|
All other
segments |
Total
segments |
Reconciliation
adjustments |
Total
as per
statement of profit and loss |
|||||||||||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
|||||||||||||||||||
External revenue
|
19,302 | 2,097 | 1,104 | 22,503 | — | 22,503 | ||||||||||||||||||
Inter-segment revenue
|
— | — | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment revenue
|
19,302 | 2,097 | 1,104 | 22,503 | — | 22,503 | ||||||||||||||||||
Cost of care delivery
|
(18,581 | ) | (3,040 | ) | (2,823 | ) | (24,444 | ) | 5,624 | (18,820 | ) | |||||||||||||
Other operating expenses, excluding amortization and depreciation
|
(57,704 | ) | (10,618 | ) | (6,218 | ) | (74,540 | ) | (5,542 | ) | (80,082 | ) | ||||||||||||
Exchange (loss)/gain
|
(813 | ) | 197 | (19,292 | ) | (19,908 | ) | 17,762 | (2,146 | ) | ||||||||||||||
Share of loss of equity-accounted investees
|
— | (309 | ) | — | (309 | ) | — | (309 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBITDA
|
|
(57,796
|
)
|
|
(11,673
|
)
|
|
(27,229
|
)
|
|
(96,698
|
)
|
|
17,844
|
|
|
(78,854
|
)
|
||||||
|
|
|||||||||||||||||||||||
Depreciation and amortization
|
(6,459 | ) | ||||||||||||||||||||||
Exchange loss/(gain)
|
2,146 | |||||||||||||||||||||||
Share of loss of equity-accounted investees
|
309 | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Operating loss
|
|
(82,858
|
)
|
|||||||||||||||||||||
|
|
Six Months Ended June 30,
|
||||||||||||||||
2021
|
2020
|
|||||||||||||||
$’000
|
%
of revenue
|
$’000
|
%
of revenue
|
|||||||||||||
Customer 1
|
32,937 | 26 | — | — | ||||||||||||
Customer 2
|
25,752 | 20 | — | — | ||||||||||||
Customer 3
|
15,173 | 12 | — | — | ||||||||||||
Customer 4
|
— | — | 4,797 | 21 | ||||||||||||
Customer 5
|
— | — | 4,219 | 19 | ||||||||||||
Customer 6
|
— | — | 3,688 | 16 | ||||||||||||
Customer 7
|
— | — | 2,473 | 11 |
Six Months Ended
June 30, |
||||||||
2021
|
2020
|
|||||||
$’000
|
$’000
|
|||||||
UK
|
16,130 | 12,332 | ||||||
US
|
71,651 | 2,097 | ||||||
Asia-Pacific
|
7,548 | 5,095 | ||||||
Canada
|
32,937 | 1,328 | ||||||
Rest of World
|
505 | 1,651 | ||||||
|
|
|
|
|||||
Total
|
|
128,771
|
|
|
22,503
|
|
||
|
|
|
|
7.
|
Intangible assets and Goodwill
|
Goodwill
|
Development
Costs |
Intangibles
under Development |
Customer
Relationships |
Trademarks
|
Choice
Physician Network |
Licenses
|
Total
other intangible assets (excluding goodwill) |
|||||||||||||||||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
|||||||||||||||||||||||||
Cost
|
||||||||||||||||||||||||||||||||
Balance at January 1, 2020
|
61 | 15,559 | 28,873 | — | — | — | — | 44,432 | ||||||||||||||||||||||||
Acquisitions through business combinations
|
17,771 | — | — | 3,100 | 3,300 | 1,500 | — | 7,900 | ||||||||||||||||||||||||
Additions
|
— | 940 | 43,027 | — | — | — | — | 43,967 | ||||||||||||||||||||||||
Transfers
|
— | 51,932 | (51,932 | ) | — | — | — | — | — | |||||||||||||||||||||||
Effect of movements in foreign exchange
|
— | 631 | 1,170 | — | — | — | — | 1,801 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2020
|
17,832 | 69,061 | 21,138 | 3,100 | 3,300 | 1,500 | — | 98,100 | ||||||||||||||||||||||||
Balance at January 1, 2021
|
17,832 | 69,061 | 21,138 | 3,100 | 3,300 | 1,500 | — | 98,100 | ||||||||||||||||||||||||
Acquisitions through business combinations
|
13,471 | — | — | 10,800 | 1,900 | 3,500 | 590 | 16,790 | ||||||||||||||||||||||||
Additions
|
— | — | 17,012 | — | — | — | — | 17,012 | ||||||||||||||||||||||||
Transfers
|
— | 14,903 | (14,903 | ) | — | — | — | — | — | |||||||||||||||||||||||
Effect of movements in foreign exchange
|
— | 871 | 230 | — | — | — | 1,101 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at June 30, 2021
|
31,303 | 84,835 | 23,477 | 13,900 | 5,200 | 5,000 | 590 | 133,002 | ||||||||||||||||||||||||
Amortization and impairment
|
||||||||||||||||||||||||||||||||
Balance at January 1, 2020
|
— | 680 | — | — | — | — | — | 680 | ||||||||||||||||||||||||
Amortization for the year
|
— | 10,157 | — | 845 | 83 | — | — | 11,085 | ||||||||||||||||||||||||
Impairment charge
|
— | 6,436 | — | — | — | 38 | — | 6,474 |
Goodwill
|
Development
Costs |
Intangibles
under Development |
Customer
Relationships |
Trademarks
|
Choice
Physician Network |
Licenses
|
Total
other intangible assets (excluding goodwill) |
|||||||||||||||||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
|||||||||||||||||||||||||
Effect of movements in foreign exchange
|
— | 1,007 | — | — | — | — | — | 1,007 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2020
|
— | 18,280 | — | 845 | 83 | 38 | — | 19,246 | ||||||||||||||||||||||||
Balance at January 1, 2021
|
— | 18,280 | — | 845 | 83 | 38 | — | 19,246 | ||||||||||||||||||||||||
Amortization for the period
|
— | 8,995 | — | 1,826 | 212 | 162 | 15 | 11,210 | ||||||||||||||||||||||||
Impairment charge
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Effect of movements in foreign exchange
|
— | 215 | — | — | — | — | — | 215 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at June 30, 2021
|
— | 27,490 | — | 2,671 | 295 | 200 | 15 | 30,671 | ||||||||||||||||||||||||
Net book value
|
||||||||||||||||||||||||||||||||
At January 1, 2020
|
— | 14,878 | 28,873 | — | — | — | — | 43,751 | ||||||||||||||||||||||||
At December 31, 2020 and January 1, 2021
|
17,832 | 50,780 | 21,138 | 2,255 | 3,217 | 1,462 | — | 78,853 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
At June 30, 2021
|
|
31,303
|
|
|
57,345
|
|
|
23,477
|
|
|
11,229
|
|
|
4,905
|
|
|
4,800
|
|
|
575
|
|
|
102,331
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
Investments in subsidiaries and associates
|
Subsidiary undertakings
|
Country of
Incorporation |
Principal Activity
|
Ownership
(As at June 30, 2021) |
|||||||||
Company:
|
||||||||||||
Babylon Partners Limited | London, UK | Application development |
|
100.0 | % | |||||||
Babylon Healthcare Services Limited | London, UK | Digital Healthcare services |
|
100.0 | % | |||||||
Babylon Rwanda Limited | Kigali, Rwanda | Digital Healthcare services |
|
100.0 | % | |||||||
Babylon Inc. | Delaware, USA | Digital Healthcare services |
|
100.0 | % | |||||||
Babylon Malaysia SDN BDN | Kuala Lumpur, Malaysia |
|
Digital Healthcare services |
|
100.0 | % | ||||||
Babylon International Limited | London, UK | Digital Healthcare services |
|
100.0 | % | |||||||
Babylon Health Ireland Limited | Cork, Ireland | Digital Healthcare services |
|
100.0 | % | |||||||
Babylon Singapore PTE Limited | Singapore | Digital Healthcare services |
|
100.0 | % | |||||||
Health Innovators Inc | Delaware, USA | Digital Healthcare services |
|
78.0 | % | |||||||
Babylon Acquisition Corp | Delaware, USA | Digital Healthcare services |
|
100.0 | % | |||||||
Babylon Technology LTDA | Brazil | Digital Healthcare services |
|
100.0 | % | |||||||
Group:
|
||||||||||||
Babylon Healthcare Inc | Delaware, USA | Digital Healthcare services |
|
100.0 | % | |||||||
Babylon Healthcare NJ, PC | New Jersey, USA |
|
Healthcare services | 100.0 | % | |||||||
Babylon Healthcare, PLLC | Maine, USA | Healthcare services | 100.0 | % | ||||||||
Babylon Medical Group (formerly Marcus Zachary DO), PC | California, USA | Healthcare services | 100.0 | % | ||||||||
California Telemedicine Associates, PC | California, USA | Healthcare services | 100.0 | % | ||||||||
Telemedicine Associates, PC | Maine, USA | Healthcare services | 100.0 | % | ||||||||
Babylon Healthcare, PC | Illinois, USA | Healthcare services | 100.0 | % | ||||||||
Babylon Healthcare NC, PC | North Carolina, USA |
|
Healthcare services | 100.0 | % | |||||||
Babylon Healthcare, PA | Pennsylvania, USA |
|
Healthcare services | 100.0 | % | |||||||
Meritage Medical Network | California, USA | Healthcare services | 100.0 | % | ||||||||
Meritage Health Ventures, LLC | California, USA | Healthcare services | 100.0 | % |
Subsidiary undertakings
|
Country of
Incorporation |
Principal Activity
|
Ownership
(As at June 30, 2021) |
|||||||||
Group:
|
||||||||||||
Meritage Health Plan | California, USA | Healthcare services | 100.0 | % | ||||||||
Meritage Management, LLC | California, USA | Healthcare services | 100.0 | % | ||||||||
Meritage ACO, LLC | California, USA | Healthcare services | 100.0 | % | ||||||||
First Choice 360 Care Solutions | California, USA | Healthcare services | 100.0 | % | ||||||||
Investment in Associates:
|
||||||||||||
Higi SH Holdings Inc. | Delaware, USA | Digital Healthcare services |
|
25.0 | % |
$’000
|
||||
Non-current
assets
|
684 | |||
Current Assets
|
8,250 | |||
Non-current
liabilities
|
(7,000 | ) | ||
Current liabilities
|
(3,244 | ) | ||
|
|
|||
Net assets (100%)
|
(1,310
|
)
|
||
Revenue
|
4,621 | |||
|
|
|||
Total comprehensive loss
|
(5,621
|
)
|
||
|
|
June 30,
2021 |
December 31,
2020 |
|||||||
$’000
|
$’000
|
|||||||
Total assets
|
66,489 | 35,535 | ||||||
Total liabilities
|
81,429 | 42,699 |
Six Months Ended June 30,
|
||||||||
2021
|
2020
|
|||||||
$’000
|
$’000
|
|||||||
Total revenues
|
35,786 | 1,036 | ||||||
Operating expenses:
|
||||||||
Cost of care delivery
|
(36,710 | ) | (942 | ) | ||||
Sales, general and administrative expenses
|
(4,404 | ) | (119 | ) | ||||
|
|
|
|
|||||
Total operating expenses
|
|
(41,114
|
)
|
|
(1,061
|
)
|
||
|
|
|
|
9.
|
Deferred grant income – tax credit
|
$’000
|
||||
Balance at January 1, 2020
|
— | |||
Grants related to prior years
|
3,173 | |||
Grants received in 2020
|
4,314 | |||
Grant income recognized
|
— | |||
Adjustments, net
|
— | |||
|
|
|||
Balance at December 31, 2020
|
|
7,488
|
|
|
Balance at January 1, 2021
|
7,488 | |||
Grants related to prior years
|
— | |||
Grants received in 2021
|
1,161 | |||
Grant income recognized
|
(1,144 | ) | ||
Adjustments, net
|
99 | |||
|
|
|||
Balance at June 30, 2021
|
|
7,604
|
|
|
|
|
10.
|
Claims Payable
|
$’000
|
||||
Balance at January 1, 2020
|
— | |||
Claims Expense
|
24,146 | |||
Claims Paid
|
(21,137 | ) | ||
Adjustment, net
|
881 | |||
|
|
|||
Balance at December 31, 2020
|
|
3,890
|
|
|
|
|
|||
Balance at January 1, 2021
|
3,890 | |||
Claims Expense
|
59,948 | |||
Claims Paid
|
(48,443 | ) | ||
Adjustment, net
|
(502 | ) | ||
|
|
|||
Balance at June 30, 2021
|
|
14,893
|
|
|
|
|
11.
|
Cash and cash equivalents
|
June 30,
|
December 31,
|
|||||||
2021
|
2020
|
|||||||
$’000
|
$’000
|
|||||||
Cash in hand and at banks
|
42,081 | 97,757 | ||||||
Short term investment funds
|
— | 4,000 | ||||||
Restricted cash
|
300 | — | ||||||
|
|
|
|
|||||
42,381
|
101,757
|
|||||||
|
|
|
|
12.
|
Leases
|
13.
|
Loans and borrowings
|
Changes from financing cash flows
|
$’000
|
|||
Balance at January 1, 2020
|
— | |||
Convertible loan notes issued
|
100,000 | |||
Convertible loan notes converted
|
(30,000 | ) | ||
Other loans
|
357 | |||
|
|
|||
Balance at December 31, 2020
|
|
70,357
|
|
|
|
|
Changes from financing cash flows
|
$’000
|
|||
Balance at January 1, 2021
|
70,357 | |||
Convertible loan notes issued
|
— | |||
Convertible loan notes converted
|
(70,000 | ) | ||
Other loans
|
116 | |||
|
|
|||
Balance at June 30, 2021
|
|
473
|
|
|
|
|
14.
|
Employee Benefits
|
15.
|
Capital and reserves
|
Ordinary A
Shares |
Ordinary B
Shares |
Preference C
Shares |
Preference
G1 Shares |
|||||||||||||
In thousands of shares |
2021
|
2021
|
2021
|
2021
|
||||||||||||
Authorized
|
10,000,000 | 11,000,000 | 10,000,000 | 50,000 | ||||||||||||
On issue at January 1, 2021
|
135,136 | 664,605 | 252,065 | 0 | ||||||||||||
Issued during the year
|
— | 17,206 | 41,012 | 10,150 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
On issue at June 30, 2021 - fully paid
|
|
135,136
|
|
|
681,811
|
|
|
293,077
|
|
|
10,150
|
|
||||
|
|
|
|
|
|
|
|
June 30,
2021 |
||||
Authorized
|
||||
10,000,000,000 A Ordinary shares of $0.00001277 each
|
127,700 | |||
11,000,000,000 B Ordinary shares of $0.00001277 each
|
140,471 | |||
10,000,000,000 C Preferred shares of $0.00001277 each
|
127,700 | |||
50,000,000 G1 Ordinary redeemable shares of $0.00001277 each
|
638 | |||
Allotted, called up and fully paid
|
||||
135,136,000 A ordinary shares of $0.00001277 each
|
1,726 | |||
664,605,000 B ordinary shares of $0.00001277 each
|
8,487 | |||
293,188 C preference shares of $0.00001277 each
|
3,744 | |||
10,150 G1 Ordinary redeemable shares of $0.00001277 each
|
130 | |||
|
|
|||
|
14,087
|
|
||
|
|
• |
the A Ordinary Shares in issue at any time shall (as a separate class) carry fifty per cent (50.0%) of the total voting rights of the Shares; and
|
• |
the B Ordinary Shares and the Series C Preferred Shares in issue at any time shall (as if the B Ordinary Shares and the Series C Preferred Shares constituted one and the same class) carry fifty per cent (50.0%) of the total voting rights of the Shares;
|
• |
the Holders of a majority of the A Ordinary Shares shall have the right from time to time to appoint such number of persons to be Directors of each Group Company equal to the number of Directors which the Holders of B Ordinary Shares and Series C Preferred Shares are entitled to appoint (in aggregate) plus one additional Director; and in each case to remove from office any persons appointed and to appoint another person in his or her place
|
• |
The Series C Largest Shareholder shall have the right from time to time to appoint one person to be a Director and to remove from office any person so appointed and to appoint another person in his or her place.
|
• |
For so long as a holder of B Ordinary Shares or Series C Preferred Shares is also a Qualifying Stakeholder, each such Qualifying Stakeholder shall have the right from time to time to appoint one person to be a Director for each whole Qualifying Stake held by them and to remove from office any person so appointed and to appoint another person in his or her place.
|
• |
G1 Ordinary Redeemable Shares do not have the right to vote, nor to receive dividends, and have capital rights to convert into Ordinary B Shares in connection with an exit event. G1 Ordinary Redeemable shares are redeemable at the sole discretion of the Company.
|
a) |
first, in paying to each of the Series C Preferred Shareholders, in priority to any other classes of Shares, an amount per Series C Preferred Share held equal to the Preference Amount
|
b) |
second, in paying to the 2016/2017 Subscribers pro rata to their respective holdings of Hoxton Shares and Kinnevik Shares an amount equal to the Hurdle Amount; and
|
c) |
the balance of the surplus assets (if any) shall be distributed among the holders of the A Ordinary Shares and the B Ordinary Shares pro rata as if they constituted one and the same class.
|
2021
|
||||
$’000
|
||||
January 1,
|
1,675 | |||
Foreign operations – foreign currency translation differences
|
(67 | ) | ||
|
|
|||
June 30,
|
|
1,608
|
|
|
|
|
16.
|
Summary of Significant Accounting Policies
|
17.
|
Related Parties
|
18.
|
Adoption of new and revised international reporting standards
|
• |
Amendments to IFRS 9:
Financial Instruments
Financial Instruments: Recognition and Measurement
Financial Instruments: Disclosures
Interest Rate Benchmark Reform – Phase 2
|
19.
|
Subsequent events
|
For the Years Ended December 31,
|
||||||||||||
2020
|
2019
|
|||||||||||
Notes |
$’000
|
$’000
|
||||||||||
Revenue
|
6
|
79,272 | 16,034 | |||||||||
Cost of care delivery
|
(67,254 | ) | (19,810 | ) | ||||||||
Platform & application expenses (including amortization & impairment of $17,524 thousand (2019: $1,182 thousand))
|
9 | (48,664 | ) | (16,948 | ) | |||||||
Research & development expenses (excluding amortization and impairment)
|
10 | (35,524 | ) | (51,205 | ) | |||||||
Sales, general & administrative expenses
|
11 | (103,341 | ) | (90, 891 | ) | |||||||
|
|
|
|
|||||||||
Operating loss
|
(175,511 | ) | (162,820 | ) | ||||||||
Finance costs
|
12 | (4,530 | ) | (1,116 | ) | |||||||
Finance income
|
12 | 610 | 1,015 | |||||||||
Exchange (loss) / gain
|
(2,836 | ) | 17,075 | |||||||||
|
|
|
|
|||||||||
Net finance (expense) income
|
(6,756 | ) | 16,974 | |||||||||
Share of loss of equity-accounted investees
|
(1,124 | ) | — | |||||||||
|
|
|
|
|||||||||
Loss before taxation
|
(183,391 | ) | (145,846 | ) | ||||||||
|
|
|
|
|||||||||
Tax (provision) benefit
|
13 | (4,639 | ) | 5,559 | ||||||||
|
|
|
|
|||||||||
Loss for the financial year
|
(188,030 | ) | (140,287 | ) | ||||||||
|
|
|
|
|||||||||
Other comprehensive loss
|
||||||||||||
Items that may be reclassified subsequently to profit or loss:
|
||||||||||||
Currency translation differences
|
3,579 | (9,693 | ) | |||||||||
|
|
|
|
|||||||||
Other comprehensive gain / (loss) for the year, net of income tax
|
3,579 | (9,693 | ) | |||||||||
|
|
|
|
|||||||||
Total comprehensive loss for the year
|
|
(184,451
|
)
|
|
(149,980
|
)
|
||||||
|
|
|
|
|||||||||
Loss attributable to:
|
||||||||||||
Equity holders of the parent
|
(186,799 | ) | (140,287 | ) | ||||||||
Non-controlling
interest
|
(1,231 | ) | — | |||||||||
|
|
|
|
|||||||||
(188,030 | ) | (140,287 | ) | |||||||||
|
|
|
|
|||||||||
Total comprehensive loss attributable to:
|
||||||||||||
Equity holders of the parent
|
(183,220 | ) | (149,980 | ) | ||||||||
Non-controlling
interest
|
(1,231 | ) | — | |||||||||
|
|
|
|
|||||||||
(184,451 | ) | (149,980 | ) | |||||||||
|
|
|
|
|||||||||
Loss per share
|
||||||||||||
Net loss per share, Basic and Diluted
|
26 | (0.23 | ) | (0.18 | ) |
Share
capital |
Share
premium |
Share-
based payment reserve |
Retained
earnings |
Foreign
exchange revaluation reserve |
Equity
attributable to owners of the parent company |
Non-controlling
Interest |
Total
equity |
|||||||||||||||||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
|||||||||||||||||||||||||
Balance at January 1, 2019
|
10 | 76,833 | 7,302 | (142,418 | ) | 7,789 | (50,484 | ) | — | (50,484 | ) | |||||||||||||||||||||
Total comprehensive loss for the period
|
||||||||||||||||||||||||||||||||
Loss for the financial year
|
— | — | — | (140,287 | ) | — | (140,287 | ) | — | (140,287 | ) | |||||||||||||||||||||
Foreign exchange movement
|
— | (9,693 | ) | (9,693 | ) | — | (9,693 | ) | ||||||||||||||||||||||||
Equity raise
|
3 | 377,270 | — | — | — | 377,273 | — | 377,273 | ||||||||||||||||||||||||
Equity-settled share-based payment transactions
|
— | — | 7,966 | — | — | 7,966 | — | 7,966 | ||||||||||||||||||||||||
Fees directly attributable to equity raise
|
— | (11,048 | ) | — | — | — | (11,048 | ) | — | (11,048 | ) | |||||||||||||||||||||
Effect of share redenomination
|
70 | — | 70 | — | 70 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2019
|
|
13
|
|
|
443,125
|
|
|
15,268
|
|
|
(282,705
|
)
|
|
(1,904
|
)
|
|
173,797
|
|
|
—
|
|
|
173,797
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at January 1, 2020
|
13 | 443,125 | 15,268 | (282,705 | ) | (1,904 | ) | 173,797 | — | 173,797 | ||||||||||||||||||||||
Total comprehensive loss for the period
|
||||||||||||||||||||||||||||||||
Loss for the financial year
|
— | — | — | (186,799 | ) | — | (186,799 | ) | (1,231 | ) | (188,030 | ) | ||||||||||||||||||||
Foreign exchange movement
|
— | — | — | — | 3,579 | 3,579 | — | 3,579 | ||||||||||||||||||||||||
Equity raise
|
— | 11,907 | — | — | — | 11,907 | — | 11,907 | ||||||||||||||||||||||||
Conversion of convertible debt
|
— | 30,189 | — | — | — | 30,189 | — | 30,189 | ||||||||||||||||||||||||
Equity-settled share-based payment transactions
|
— | — | 16,917 | — | — | 16,917 | — | 16,917 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2020
|
|
13
|
|
|
485,221
|
|
|
32,185
|
|
|
(469,504
|
)
|
|
1,675
|
|
|
49,590
|
|
|
(1,231
|
)
|
|
48,359
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31,
|
||||||||||||
2020
|
2019
|
|||||||||||
Notes |
$’000
|
$’000
|
||||||||||
Cash flows from operating activities
|
||||||||||||
Loss for the year
|
(188,030 | ) | (140,287 | ) | ||||||||
Adjustments for:
|
||||||||||||
Finance costs
|
12 | 4,530 | 1,116 | |||||||||
Finance income
|
12 | (610 | ) | (1,015 | ) | |||||||
Depreciation and amortization
|
14, 15, 20 | 14,487 | 2,496 | |||||||||
Share-based compensation
|
22 | 9,557 | 7,966 | |||||||||
Taxation
|
13 | 4,639 | (5,559 | ) | ||||||||
Exchange loss / (gain)
|
2,836 | (17,075 | ) | |||||||||
Impairment expense
|
15 | 6,436 | — | |||||||||
Share of net loss of associates and joint ventures accounted for using the equity method
|
1,124 | — | ||||||||||
|
|
|
|
|||||||||
(145,031) | (152,358) | |||||||||||
Working capital adjustments
|
||||||||||||
(Increase)/Decrease in trade and other receivables
|
17 | 738 | (9,308 | ) | ||||||||
Increase/(Decrease) in trade and other payables
|
6,18 | 2,323 | 18,052 | |||||||||
(Increase)/Decrease in assets held for sale
|
27 | (3,282 | ) | — | ||||||||
Increase/(Decrease) liabilities directly associated with the assets held for sale
|
27 | 1,822 | — | |||||||||
|
|
|
|
|||||||||
Net cash used in operating activities
|
(143,430 | ) | (143,614 | ) | ||||||||
|
|
|
|
|||||||||
Cash flows from investing activities
|
||||||||||||
Capital expenditure
|
14 | (719 | ) | (1,915 | ) | |||||||
Interest received
|
673 | 1,015 | ||||||||||
Development costs capitalized
|
15 | (36,509 | ) | (36,036 | ) | |||||||
Payment for acquisition of trade and assets
|
5 | (25,671 | ) | — | ||||||||
Purchase of shares in associates and joint ventures
|
(10,000 | ) | — | |||||||||
|
|
|
|
|||||||||
Net cash used in investing activities
|
(72,226 | ) | (36,936 | ) | ||||||||
|
|
|
|
|||||||||
Cash flows from financing activities
|
||||||||||||
Proceeds from issuance of convertible loan notes
|
21 | 100,000 | 51,064 | |||||||||
Repayment of convertible loans
|
— | (14,794 | ) | |||||||||
Repayment of cash loan
|
— | (1,231 | ) | |||||||||
Gross proceeds from issuance of share capital
|
23 | 12,096 | 320,334 | |||||||||
Fees directly attributable to equity raise
|
(10,245 | ) | (773 | ) | ||||||||
Principal payments on leases
|
20 | (1,541 | ) | (1,228 | ) | |||||||
Interest paid
|
12 | (252 | ) | (851 | ) | |||||||
|
|
|
|
|||||||||
Net cash provided by financing activities
|
100,058 | 352,521 | ||||||||||
|
|
|
|
|||||||||
Net (decrease) / increase in cash and cash equivalents
|
(115,598 | ) | 171,971 | |||||||||
Cash and cash equivalents at January 1,
|
214,888 | 46,031 | ||||||||||
Effect of movements in exchange rate on cash held
|
2,467 | (3,114 | ) | |||||||||
|
|
|
|
|||||||||
Cash and cash equivalents at December 31,
|
101,757 | 214,888 | ||||||||||
|
|
|
|
1.
|
Corporate information
|
2.
|
Basis of preparation
|
3.
|
Significant accounting judgements, estimates and assumptions
|
4.
|
Accounting policies
|
-
|
Computer equipment | 3 years | ||||
- | Fixtures and fittings | 4 years |
-
|
Development costs |
1-10
years
|
||||
-
|
Customer relationships | 11 months | ||||
-
|
Trade names | 10 years | ||||
-
|
Physician network | 10 years |
• |
They are available for immediate sale
|
• |
Management is committed to a plan to sell
|
• |
It is unlikely that significant changes to the plan will be made or that the plan will be withdrawn
|
• |
An active programme to locate a buyer has been initiated
|
• |
The asset or disposal group is being marketed at a reasonable price in relation to its fair value, and
|
• |
A sale is expected to complete within 12 months from the date of classification.
|
• |
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
• |
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
• |
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
• |
Amendments to IFRS 9:
Financial Instruments
Financial Instruments: Recognition and Measurement
Financial Instruments: Disclosures
Interest Rate Benchmark Reform – Phase 2
|
• |
Amendments to IAS 37:
Onerous Contracts—Cost of Fulfilling a Contract,
Business Combinations,
Property, Plant and Equipment—Proceeds before Intended Use,
|
5.
|
Business Acquisitions
|
Recognized values on acquisition
|
||||
$‘000
|
||||
Acquiree’s net assets at the acquisition date:
|
||||
Intangible assets
|
7,900 | |||
Right-of-use
|
153 | |||
Lease liability
|
(153 | ) | ||
|
|
|||
Net identifiable assets and liabilities
|
|
7,900
|
|
|
Goodwill
|
17,771 | |||
|
|
|||
Consideration paid
|
|
25,671
|
|
|
|
|
Recognized values on acquisition
|
||||
$‘000
|
||||
Acquiree’s net assets at the acquisition date:
|
||||
Intangible assets
|
940 | |||
Working capital
|
27 | |||
Cash and cash equivalents
|
4,230 | |||
Deferred tax liabilities
|
(160 | ) | ||
Debt
|
(1,098 | ) | ||
|
|
|||
Net identifiable assets and liabilities
|
|
3,939
|
|
|
Goodwill
|
61 | |||
|
|
|||
Consideration paid
|
|
4,000
|
|
|
|
|
6.
|
Revenue
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Clinical services
|
28,631 | 14,032 | ||||||
Software licensing revenue
|
24,603 | 2,002 | ||||||
Value based care
|
26,038 | — | ||||||
|
|
|
|
|||||
|
79,272
|
|
|
16,034
|
|
|||
|
|
|
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Trade receivables (Note 17)
|
4,674 | 3,016 | ||||||
Contract assets (Note 17)
|
2,378 | 1,541 | ||||||
Contract liabilities (Note 6 iii)
|
76,018 | 81,584 |
2020
|
2021
|
2022
|
2023
|
2024
and beyond |
Total
|
|||||||||||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
|||||||||||||||||||
At December 31, 2020
|
— | 18,744 | 13,883 | 14,174 | 29,217 | 76,018 | ||||||||||||||||||
At December 31, 2019
|
16,690 | 26,755 | 24,027 | 14,112 | — | 81,584 |
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Balance on January 1
|
81,584 | 82,542 | ||||||
Amounts billed but not recognized
|
18,080 | 1,808 | ||||||
Revenue recognized
|
(23,646 | ) | (2,766 | ) | ||||
|
|
|
|
|||||
Balance on December 31
|
|
76,018
|
|
|
81,584
|
|
||
|
|
|
|
7.
|
Segment Information
|
Year ended December 31, 2020
|
||||||||||||||||||||||||
UK
|
US
|
All other
segments |
Total
segments |
Reconciliation
adjustments |
Total as
per statement of profit and loss |
|||||||||||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
|||||||||||||||||||
Revenue
|
44,000 | 32,226 | 2,968 | 79,194 | 78 | 79,272 | ||||||||||||||||||
Inter-segment revenue
|
1,194 | (3,094 | ) | 1,766 | (134 | ) | 134 | 0 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment revenue
|
45,194 | 29,132 | 4,734 | 79,060 | 212 | 79,272 | ||||||||||||||||||
Cost of care delivery
|
(34,600 | ) | (34,381 | ) | (7,205 | ) | (76,186 | ) | 8,932 | (67,254 | ) | |||||||||||||
Other operating expenses, excluding amortization and depreciation
|
(127,762 | ) | (27,190 | ) | (3,990 | ) | (158,942 | ) | (14,100 | ) | (173,042 | ) | ||||||||||||
Exchange (loss)/gain
|
403 | (246 | ) | 17,060 | 17,217 | (20,053 | ) | (2,836 | ) | |||||||||||||||
Share of loss of equity-accounted investees
|
— | — | (1,124 | ) | (1,124 | ) | — | (1,124 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBITDA
|
|
(116,765
|
)
|
|
(32,685
|
)
|
|
9,475
|
|
|
(139,975
|
)
|
|
(25,009
|
)
|
|
(164,984
|
)
|
||||||
|
|
|||||||||||||||||||||||
Depreciation and amortization
|
(14,487 | ) | ||||||||||||||||||||||
Exchange loss/(gain)
|
2,836 | |||||||||||||||||||||||
Share of loss of equity-accounted investees
|
1,124 | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Operating loss
|
|
(175,511
|
)
|
|||||||||||||||||||||
|
|
|||||||||||||||||||||||
Year ended December 31, 2019
|
||||||||||||||||||||||||
UK
|
US
|
All other
segments |
Total
segments |
Reconciliation
adjustments |
Total as
per statement of profit and loss |
|||||||||||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
|||||||||||||||||||
External revenue
|
14,633 | — | 1,410 | 16,043 | (9 | ) | 16,034 | |||||||||||||||||
Inter-segment revenue
|
4,081 | (2,669 | ) | (1,382 | ) | 30 | (30 | ) | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Segment revenue
|
18,714 | (2,669 | ) | 28 | 16,073 | (39 | ) | 16,034 | ||||||||||||||||
Cost of care delivery
|
(25,707 | ) | (160 | ) | (373 | ) | (26,240 | ) | 6,430 | (19,810 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other operating expenses, excluding amortization and depreciation
|
(119,895 | ) | (23,273 | ) | (5,340 | ) | (148,508 | ) | (8,040 | ) | (156,548 | ) | ||||||||||||
Exchange (loss)/gain
|
314 | (83 | ) | 16,584 | 16,815 | 260 | 17,075 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBITDA
|
|
(126,574
|
)
|
|
(26,185
|
)
|
|
10,899
|
|
|
(141,860
|
)
|
|
(1,389
|
)
|
|
(143,249
|
)
|
||||||
|
|
|||||||||||||||||||||||
Depreciation and amortization
|
(2,496 | ) | ||||||||||||||||||||||
Exchange loss/(gain)
|
(17,075 | ) | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Operating loss
|
|
(162,820
|
)
|
|||||||||||||||||||||
|
|
2020
|
2019
|
|||||||||||||||
$‘000
|
% of revenue
|
$‘000
|
% of revenue
|
|||||||||||||
Customer 1
|
11,918 | 15.0 | % | 2,215 | 13.8 | % | ||||||||||
Customer 2
|
9,706 | 12.3 | % | 2,465 | 15.4 | % | ||||||||||
Customer 3
|
9,505 | 12.0 | % | 5,607 | 34.9 | % | ||||||||||
Customer 4
|
14,937 | 18.9 | % | — | — |
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
UK
|
28,827 | 12,189 | ||||||
US
|
32,689 | — | ||||||
Asia-Pacific
|
11,585 | 2,215 | ||||||
Canada
|
3,207 | 564 | ||||||
Rest of World
|
2,964 | 1,066 | ||||||
|
|
|
|
|||||
Total
|
|
79,272
|
|
|
16,034
|
|
||
|
|
|
|
8.
|
Employee benefits expense
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Wages and salaries
|
108,018 | 57,388 | ||||||
Social security and pension contributions
|
13,404 | 8,254 | ||||||
Share-based compensation
|
9,557 | 7,966 | ||||||
|
|
|
|
|||||
Total
|
|
130,979
|
|
|
73,608
|
|
||
|
|
|
|
2020
|
2019
|
|||||||
Engineers
|
515 | 670 | ||||||
Sales & marketing
|
88 | 108 | ||||||
Finance, HR & legal
|
146 | 178 | ||||||
Clinical operations
|
586 | 476 | ||||||
Clinicians
|
773 | 124 | ||||||
|
|
|
|
|||||
|
2,108
|
|
|
1,556
|
|
|||
|
|
|
|
9.
|
Platform & Application Expenses
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Wages and salaries
|
24,540 | 5,676 | ||||||
Contractors and consultants expense
|
2,922 | 7,381 | ||||||
Share based compensation
|
625 | 575 | ||||||
Social security and pension contributions
|
2,776 | 974 | ||||||
Staffing, training and recruitment
|
175 | 145 | ||||||
Insurance
|
103 | 1,015 | ||||||
Depreciation and amortization
|
11,088 | 1,182 | ||||||
Impairment
|
6,436 | — | ||||||
|
|
|
|
|||||
Total
|
|
48,664
|
|
|
16,948
|
|
||
|
|
|
|
10.
|
Research and Development Expenses
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Wages and salaries
|
18,564 | 28,149 | ||||||
Contractors and consultants expense
|
2,727 | 14,752 | ||||||
Share based compensation
|
9,655 | 4,428 | ||||||
Social security and pension contributions
|
3,756 | 4,054 | ||||||
Other
|
822 | (177 | ) | |||||
|
|
|
|
|||||
Total
|
|
35,524
|
|
|
51,205
|
|
||
|
|
|
|
11.
|
Sales, General and Administrative expenses
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Employee benefits expense
|
34,362 | 26,020 | ||||||
Contractors and consultants’ expense
|
2,501 | 7,008 | ||||||
IT and hosting costs
|
20,219 | 16,609 | ||||||
Property related expenses
|
8,651 | 10,214 | ||||||
Professional fees
|
8,645 | 4,469 | ||||||
Marketing
|
6,575 | 7,691 |
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Insurance
|
4,172 | 2,444 | ||||||
Staffing, training and recruitment
|
3,494 | 6,393 | ||||||
Local taxes
|
2,359 | 2,321 | ||||||
Office and clinical supplies
|
2,120 | 2,362 | ||||||
Travel and accommodation
|
1,154 | 2,917 | ||||||
Trademarks and patents
|
753 | 503 | ||||||
Depreciation and amortization
|
3,399 | 1,315 | ||||||
Other
|
4,937 | 625 | ||||||
|
|
|
|
|||||
Total
|
|
103,341
|
|
|
90,891
|
|
||
|
|
|
|
12.
|
Finance income and costs
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Finance costs
(i)
|
4,530 | 1,116 | ||||||
Finance income
(ii)
|
(610 | ) | (1,015 | ) | ||||
|
|
|
|
|||||
Net finance charge
|
|
3,920
|
|
|
101
|
|
||
|
|
|
|
(i) |
The following items are included under finance costs:
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Interest payable
|
252 | 851 | ||||||
Interest on leases
|
572 | 265 | ||||||
Interest on contract liabilities
|
3,706 | — | ||||||
|
|
|
|
|||||
Total finance cost
|
|
4,530
|
|
|
1,116
|
|
||
|
|
|
|
(ii) |
In 2020 and 2019 finance income related to interest received.
|
|
13.
|
Taxation
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Taxation
|
||||||||
Current tax on loss for the period
|
569 | (3,457 | ) | |||||
Adjustments to tax in respect of previous periods
|
4,070 | (2,102 | ) | |||||
|
|
|
|
|||||
Tax provision (benefit)
|
|
4,639
|
|
|
(5,559
|
)
|
||
|
|
|
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Loss before tax
|
(183,391 | ) | (145,846 | ) | ||||
Tax on loss on ordinary activities at standard CT rate (19.00%)
|
(34,844 | ) | (27,711 | ) | ||||
Expenses not deductible for tax purposes
|
4,142 | 187 | ||||||
Foreign tax
|
— | 4 | ||||||
Additional deduction for R&D expenditure
|
— | (2,563 | ) | |||||
Surrender of tax losses for R&D tax credit refund
|
— | 1,074 | ||||||
Adjustments to tax in respect of previous periods
|
4,070 | (2,102 | ) | |||||
Deferred tax not recognised
|
31,271 | 25,552 | ||||||
|
|
|
|
|||||
Tax provision (benefit) for the period
|
|
4,639
|
|
|
(5,559
|
)
|
||
|
|
|
|
14.
|
Property, plant and equipment
|
Computer
Equipment |
Fixtures and
Fittings |
Total
|
||||||||||
$’000
|
$’000
|
$’000
|
||||||||||
Cost
|
||||||||||||
Balance at January 1, 2019
|
798 | 122 | 920 | |||||||||
Additions
|
1,649 | 266 | 1,915 | |||||||||
Effect of movements in foreign exchange
|
16 | 2 | 18 | |||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2019
|
2,463 | 390 | 2,853 | |||||||||
|
|
|
|
|
|
|||||||
Balance at January 1, 2020
|
2,463 | 390 | 2,853 | |||||||||
Additions
|
308 | 411 | 719 | |||||||||
Reclassification to assets held for sale
|
— | (621 | ) | (621 | ) | |||||||
Effect of movements in foreign exchange
|
89 | 89 | ||||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2020
|
2,860 | 180 | 3,040 | |||||||||
|
|
|
|
|
|
Computer
Equipment |
Fixtures and
Fittings |
Total
|
||||||||||
$’000
|
$’000
|
$’000
|
||||||||||
Depreciation
|
||||||||||||
Balance at January 1, 2019
|
345 | 53 | 398 | |||||||||
Depreciation
|
574 | 7 | 581 | |||||||||
Effect of movements in foreign exchange
|
72 | 1 | 73 | |||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2019
|
991 | 61 | 1,052 | |||||||||
|
|
|
|
|
|
|||||||
Balance at January 1, 2020
|
991 | 61 | 1,052 | |||||||||
Depreciation
|
931 | 3 | 934 | |||||||||
Reclassification to assets held for sale
|
— | — | — | |||||||||
Effect of movements in foreign exchange
|
(346 | ) | 66 | (280 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2020
|
1,576 | 130 | 1,706 | |||||||||
|
|
|
|
|
|
|||||||
Net book value
|
||||||||||||
At January 1, 2019
|
453 | 69 | 522 | |||||||||
At December 31, 2019 and January 1, 2020
|
1,472 | 329 | 1,801 | |||||||||
|
|
|
|
|
|
|||||||
At December 31, 2020
|
|
1,284
|
|
|
50
|
|
|
1,334
|
|
|||
|
|
|
|
|
|
15.
|
Intangible assets and Goodwill
|
Goodwill
|
Development
Costs |
Intangibles
under Development |
Customer
Relationships |
Trademarks
|
Choice
Physician Network |
Total other
intangible assets (excl goodwill) |
||||||||||||||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
||||||||||||||||||||||
Cost
|
||||||||||||||||||||||||||||
Balance at January 1, 2019
|
— | 544 | 7,591 | — | — | — | 8,135 | |||||||||||||||||||||
Acquisitions through business combinations
|
61 | — | — | — | — | — | — | |||||||||||||||||||||
Additions
|
— | — | 36,036 | — | — | — | 36,036 | |||||||||||||||||||||
Transfers
|
15,004 | (15,004 | ) | |||||||||||||||||||||||||
Effect of movements in foreign exchange
|
— | 10 | 250 | — | — | — | 260 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2019
|
61 | 15,558 | 28,873 | — | — | — | 44,431 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at January 1, 2020
|
61 | 15,558 | 28,873 | — | — | — | 44,431 | |||||||||||||||||||||
Acquisitions through business combinations
|
17,771 | — | — | 3,100 | 3,300 | 1,500 | 7,900 |
Goodwill
|
Development
Costs |
Intangibles
under Development |
Customer
Relationships |
Trademarks
|
Choice
Physician Network |
Total other
intangible assets (excl goodwill) |
||||||||||||||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
||||||||||||||||||||||
Additions
|
— | 940 | 43,027 | — | — | — | 43,967 | |||||||||||||||||||||
Transfers
|
51,932 | (51,932 | ) | — | ||||||||||||||||||||||||
Effect of movements in foreign exchange
|
— | 632 | 1,170 | — | — | — | 1,802 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2020
|
17,832 | 69,062 | 21,138 | 3,100 | 3,300 | 1,500 | 98,100 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Amortization and impairment
|
||||||||||||||||||||||||||||
Balance at January 1, 2019
|
— | 19 | — | — | — | — | 19 | |||||||||||||||||||||
Amortization for the year
|
— | 643 | — | — | — | — | 643 | |||||||||||||||||||||
Impairment charge
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Effect of movements in foreign exchange
|
— | 18 | — | — | — | — | 18 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2019
|
— | 680 | — | — | — | — | 680 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at January 1, 2020
|
— | 680 | — | — | — | — | 680 | |||||||||||||||||||||
Amortization for the year
|
— | 10,157 | — | 845 | 83 | 38 | 11,123 | |||||||||||||||||||||
Impairment charge
|
— | 6,436 | — | — | — | — | 6,436 | |||||||||||||||||||||
Effect of movements in foreign exchange
|
— | 1,008 | — | — | — | — | 1,008 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2020
|
— | 18,281 | — | 845 | 83 | 38 | 19,247 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net book value
|
||||||||||||||||||||||||||||
At January 1, 2019
|
— | 525 | 7,591 | — | — | — | 8,116 | |||||||||||||||||||||
At December 31, 2019 and January 1, 2020
|
61 | 14,878 | 28,873 | — | — | — | 43,751 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
At December 31, 2020
|
|
17,832
|
|
|
50,781
|
|
|
21,138
|
|
|
2,255
|
|
|
3,217
|
|
|
1,462
|
|
|
78,853
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.
|
Investments in subsidiaries and associates
|
Subsidiary undertakings
|
Country of Incorporation
|
Principal Activity
|
Ownership
(As at December 31, 2020) |
Ownership
(As at December 31, 2019) |
||||||||||||
Company:
|
||||||||||||||||
Babylon Partners Limited | London, UK | Application development | 100.0 | % | 100.0 | % | ||||||||||
Babylon Healthcare Services Limited | London, UK | Digital Healthcare services | 100.0 | % | 100.0 | % | ||||||||||
Babylon Rwanda Limited | Kigali, Rwanda | Digital Healthcare services | 100.0 | % | 100.0 | % | ||||||||||
Babylon Inc. | Delaware, USA | Digital Healthcare services | 100.0 | % | 100.0 | % | ||||||||||
Babylon Health Canada Limited | British Columbia, Canada | Digital Healthcare services | 100.0 | % | 100.0 | % | ||||||||||
Babylon Malaysia SDN BDN | Kuala Lumpur, Malaysia | Digital Healthcare services | 100.0 | % | 100.0 | % | ||||||||||
Babylon International Limited | London, UK | Digital Healthcare services | 100.0 | % | 100.0 | % | ||||||||||
Babylon Health Ireland Limited | Cork, Ireland | Digital Healthcare services | 100.0 | % | 100.0 | % | ||||||||||
Babylon Singapore PTE Limited | Singapore | Digital Healthcare services | 100.0 | % | 100.0 | % | ||||||||||
Health Innovators Inc | Delaware, USA | Digital Healthcare services | 70.1 | % | 58.0 | % | ||||||||||
Babylon Acquisition Corp | Delaware, USA | Digital Healthcare services | 100.0 | % | — | |||||||||||
Babylon Technology LTDA | Brazil | Digital Healthcare services | 100.0 | % | — | |||||||||||
Group:
|
||||||||||||||||
Babylon Healthcare Inc | Delaware, USA | Digital Healthcare services | 100.0 | % | — | |||||||||||
Babylon Healthcare NJ, PC* | New Jersey, USA | Healthcare services | 100.0 | % | — | |||||||||||
Babylon Healthcare, PLLC* | Maine, USA | Healthcare services | 100.0 | % | — | |||||||||||
Marcus Zachary DO, OC* | California, USA | Healthcare services | 100.0 | % | — | |||||||||||
California Telemedicine Associates, PC* | California, USA | Healthcare services | 100.0 | % | — | |||||||||||
Telemedicine Associates, PC* | Maine, USA | Healthcare services | 100.0 | % | — | |||||||||||
Babylon Healthcare, PC* | Illinois, USA | Healthcare services | 100.0 | % | — | |||||||||||
Babylon Healthcare NC, PC* | North Carolina, USA | Healthcare services | 100.0 | % | — | |||||||||||
Investment in Associates:
|
||||||||||||||||
Higi SH Holdings Inc. |
|
Delaware, USA |
|
|
Digital Healthcare services |
|
19.0 | % | — |
* |
Subsidiary is a PC, which is included in the Consolidated Financial Statements of the Group on the basis of control. Refer to Note 2 for additional discussion.
|
$’000
|
||||
Non-current
assets
|
1,792 | |||
Current Assets
|
10,403 | |||
Non-current
liabilities
|
8,670 | |||
Current liabilities
|
4,661 | |||
|
|
|||
Net assets (100%)
|
|
(1,136
|
)
|
|
Revenue
|
9,486 | |||
|
|
|||
Total comprehensive loss
|
|
(13,558
|
)
|
17.
|
Trade and other receivables, Prepayments and contract assets
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Trade receivables (Note 6)
|
4,674 | 3,016 | ||||||
Other receivables
|
8,914 | 9,826 | ||||||
Prepayments
|
6,463 | 4,846 | ||||||
Contract assets
|
2,378 | 1,541 | ||||||
VAT (payable) receivable
|
(63 | ) | 3,875 | |||||
|
|
|
|
|||||
|
22,366
|
|
|
23,104
|
|
|||
|
|
|
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Balance, beginning of year
|
1,541 | 750 | ||||||
Revenues recognized but not billed
|
1,511 | 765 | ||||||
Amounts reclassified to trade receivable
|
(674 | ) | 26 | |||||
|
|
|
|
|||||
Balance, end of year
|
|
2,378
|
|
|
1,541
|
|
||
|
|
|
|
18.
|
Trade and other payables, Accruals and provisions
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Trade payables
|
7,629 | 5,191 | ||||||
Accruals
|
15,409 | 19,787 | ||||||
Provisions
|
3,227 | 319 | ||||||
Taxation and Social Security
|
4,006 | 4,573 | ||||||
Deferred grant income – tax credit
|
7,488 | — | ||||||
|
|
|
|
|||||
|
37,759
|
|
|
29,870
|
|
|||
|
|
|
|
19.
|
Cash and cash equivalents
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Cash in hand and at banks
|
97,757 | 189,888 | ||||||
Short term investment funds
|
4,000 | 25,000 | ||||||
|
|
|
|
|||||
|
101,757
|
|
|
214,888
|
|
|||
|
|
|
|
20.
|
Leases
|
Right-of-use
|
$’000
|
|||
Cost
|
||||
Balance at January 1, 2019
|
1,431 | |||
Additions to
right-of-use-assets
|
4,951 | |||
Effect of change in foreign currency
|
119 | |||
|
|
|||
Balance at December 31, 2019
|
6,501 | |||
|
|
|||
Balance at January 1, 2020
|
6,501 | |||
Additions to
right-of-use-assets
|
2,300 | |||
Reclassification to assets held for sale
|
(872 | ) | ||
Effect of change in foreign currency
|
228 | |||
|
|
|||
Balance at December 31, 2020
|
8,157 | |||
|
|
|||
Amortization
|
||||
Balance at January 1, 2019
|
— | |||
Amortization charge for the year
|
1,272 | |||
Effect of change in foreign currency
|
— | |||
|
|
|||
Balance at December 31, 2019
|
1,272 | |||
|
|
|||
Balance at January 1, 2020
|
1,272 | |||
Amortization charge for the year
|
2,430 | |||
Reclassification to assets held for sale
|
(243 | ) | ||
Effect of change in foreign currency
|
184 | |||
|
|
|||
Balance at December 31, 2020
|
3,643 | |||
|
|
|||
Net book value
|
||||
Balance at January 1, 2019
|
1,431 | |||
Balance at December 31, 2019 and January 1, 2020
|
5,229 | |||
|
|
|||
Balance at December 31, 2020
|
|
4,514
|
|
|
|
|
|||
Lease liability
|
$’000
|
|||
Balance at January 1, 2019
|
1,154 | |||
Additions to lease liabilities
|
3,502 | |||
Interest expense on lease liabilities
(i)
|
265 | |||
Principal payments on leases
|
(1,228 | ) | ||
Effect of change in foreign currency
|
(110 | ) | ||
|
|
|||
Balance at December 31, 2019
|
3,583 | |||
|
|
|||
Balance at January 1, 2020
|
3,583 | |||
Additions to lease liabilities
|
2,362 | |||
Interest expense on lease liabilities
(i)
|
572 | |||
Principal payments on leases
|
(1,541 | ) | ||
Reclassification to liabilities associated with the assets held for sale
|
(607 | ) | ||
Effect of change in foreign currency
|
130 | |||
|
|
|||
Balance at December 31, 2020
|
|
4,499
|
|
|
|
|
(i) |
Interest paid on lease liabilities are presented within cash flows from financing activities.
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Depreciation expense on
right-of-use
|
2,430 | 1,272 | ||||||
Interest expense on lease liabilities
|
572 | 265 | ||||||
Expenses relating to short term leases
|
4,756 | 6,127 | ||||||
|
|
|
|
|||||
Profit and loss impact
|
|
7,758
|
|
|
7,664
|
|
||
|
|
|
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Short term (less than 1 year)
|
2,348 | 2,026 | ||||||
Long term (between 1 – 10 years remaining)
|
3,511 | 4,021 | ||||||
|
|
|
|
|||||
Total
|
|
5,859
|
|
|
6,047
|
|
||
|
|
|
|
21.
|
Loans and borrowings
|
Changes from financing cash flows
|
$’000
|
|||
Balance at January 1, 2020
|
— | |||
Convertible loan notes issued
|
100,000 | |||
Convertible loan notes converted
|
(30,000 | ) | ||
Other loans
|
357 | |||
|
|
|||
Balance at December 31, 2020
|
|
70,357
|
|
|
|
|
22.
|
Employee Benefits
|
Weighted
average exercise price 2020 |
Number of
options 2020 |
Weighted
average exercise price 2019 |
Number of
options 2019 |
|||||||||||||
$
|
$
|
|||||||||||||||
Outstanding at the beginning of the year
|
0.00001 | 74,707,270 | 0.00001 | 57,613,684 | ||||||||||||
Forfeited during the year
|
0.00001 | (8,673,488 | ) | 0.00001 | (9,160,081 | ) | ||||||||||
Exercised during the year
|
— | — | — | — | ||||||||||||
Granted during the year
|
0.00001 | 12,738,070 | 0.00001 | 26,253,667 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding at the end of the year
|
0.00001 | 78,771,852 | 0.00001 | 74,707,270 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at the end of the year
|
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Total share-based payment expense
|
9,557 | 7,966 |
23.
|
Capital and reserves
|
Ordinary A
Shares |
Ordinary B
Shares |
Preference C
Shares |
||||||||||
In thousands of shares |
2020
|
2020
|
2020
|
|||||||||
Authorized
|
10,000,000 | 11,000,000 | 10,000,000 | |||||||||
On issue at January 1, 2020
|
135,136 | 664,605 | 227,380 | |||||||||
Issued during the year
|
— | — | 24,796 | |||||||||
|
|
|
|
|
|
|||||||
On issue at December 31, 2020—fully paid
|
|
135,136
|
|
|
664,605
|
|
|
252,176
|
|
|||
|
|
|
|
|
|
2020
|
2019
|
|||||||
|
|
|
|
|||||
Authorized
|
||||||||
10,000,000,000 A Ordinary shares of $0.00001277 each
|
127,700 | 127,700 | ||||||
11,000,000,000 B Ordinary shares of $0.00001277 each
|
140,470 | 140,470 | ||||||
10,000,000,000 C Preferred shares of $0.00001277 each
|
127,700 | 127,700 | ||||||
Allotted, called up and fully paid
|
||||||||
135,136,000
A ordinary shares of $
0.00001277
each
|
1,726 | 1,726 | ||||||
664,605,000
B ordinary shares of $
0.00001277
each
|
8,487 | 8,487 | ||||||
252,176,369
C preference shares of $
0.00001277
each
|
3,220 | 2,904 | ||||||
|
|
|
|
|||||
|
13,433
|
|
|
13,117
|
|
|||
|
|
|
|
• |
the A Ordinary Shares in issue at any time shall (as a separate class) carry fifty per cent (50.0%) of the total voting rights of the Shares; and
|
• |
the B Ordinary Shares and the Series C Preferred Shares in issue at any time shall (as if the B Ordinary Shares and the Series C Preferred Shares constituted one and the same class) carry fifty per cent (50.0%) of the total voting rights of the Shares;
|
• |
the Holders of a majority of the A Ordinary Shares shall have the right from time to time to appoint such number of persons to be Directors of each Group Company equal to the number of Directors which the Holders of B Ordinary Shares and Series C Preferred Shares are entitled to appoint (in aggregate) plus one additional Director; and in each case to remove from office any persons appointed and to appoint another person in his or her place
|
• |
The Series C Largest Shareholder shall have the right from time to time to appoint one person to be a Director and to remove from office any person so appointed and to appoint another person in his or her place.
|
• |
For so long as a holder of B Ordinary Shares or Series C Preferred Shares is also a Qualifying Stakeholder, each such Qualifying Stakeholder shall have the right from time to time to appoint one person to be a Director for each whole Qualifying Stake held by them and to remove from office any person so appointed and to appoint another person in his or her place.
|
a) |
first, in paying to each of the Series C Preferred Shareholders, in priority to any other classes of Shares, an amount per Series C Preferred Share held equal to the Preference Amount
|
b) |
second, in paying to the 2016/2017 Subscribers pro rata to their respective holdings of Hoxton Shares and Kinnevik Shares an amount equal to the Hurdle Amount; and
|
c) |
the balance of the surplus assets (if any) shall be distributed among the holders of the A Ordinary Shares and the B Ordinary Shares pro rata as if they constituted one and the same class.
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
January 1,
|
(1,904 | ) | 7,789 | |||||
Foreign operations – foreign currency translation differences
|
3,579 | (9,693 | ) | |||||
|
|
|
|
|||||
December 31,
|
|
1,675
|
|
|
(1,904
|
)
|
||
|
|
|
|
24.
|
Related parties
|
25.
|
Financial risk management objectives and policies
|
25.1
|
Credit risk
|
25.2
|
Liquidity risk
|
25.3
|
Currency risk
|
Average Rate
|
Year-end
spot rate
|
|||||||||||||||
United States Dollar |
2020
|
2019
|
2020
|
2019
|
||||||||||||
GBP
|
0.7760 | 0.7835 | 0.7321 | 0.7618 | ||||||||||||
CAD
|
1.3433 | 1.3251 | 1.2750 | 1.30328 | ||||||||||||
RWF
|
959.1820 | 914.2488 | 988.0837 | 947.075 | ||||||||||||
SGD
|
1.3789 | 1.3111 | 1.3224 | 1.34555 | ||||||||||||
INR
|
74.0038 | N/A | 73.2901 | N/A |
Profit or loss
|
||||||||
Strengthening
|
Weakening
|
|||||||
$’000
|
$’000
|
|||||||
December 31, 2020
|
||||||||
GBP (5.0% movement)
|
(184,067 | ) | (184,416 | ) | ||||
December 31, 2019
|
||||||||
GBP (5.0% movement)
|
(156,489 | ) | (150,290 | ) | ||||
Equity, net of tax
|
||||||||
Strengthening
|
Weakening
|
|||||||
$’000
|
$’000
|
|||||||
December 31, 2020
|
||||||||
GBP (5.0% movement)
|
(48,743 | ) | (48,394 | ) | ||||
December 31, 2019
|
||||||||
GBP (5.0% movement)
|
(175,371 | ) | (173,872 | ) |
25.5
|
Interest rate risk
|
25.6
|
Capital management
|
26.
|
Loss per share
|
2020
|
2019
|
|||||||
$’000
|
$’000
|
|||||||
Net loss for the year
|
(188,030 | ) | (140,287 | ) | ||||
Weighted-average ordinary shares outstanding – Basic and Diluted
|
803,901 | 800,484 | ||||||
|
|
|
|
|||||
Net loss per ordinary share – Basic and Diluted
|
|
(0.23
|
)
|
|
(0.18
|
)
|
||
|
|
|
|
27.
|
Assets and liabilities classified as held for sale
|
2020
|
||||
$’000
|
||||
Cash and cash equivalents
|
577 | |||
Prepayments and contract assets
|
1,125 | |||
Property, plant and equipment
|
621 | |||
Right-of-use
|
629 | |||
Trade and other receivables
|
330 | |||
|
|
|||
Assets held for sale
|
|
3,282
|
|
|
|
|
|||
Accruals and provisions
|
813 | |||
Lease liabilities
|
607 | |||
Trade and other payables
|
402 | |||
|
|
|||
Liabilities directly associated with the assets held for sale
|
|
1,822
|
|
|
|
|
28.
|
Subsequent events
|
Page
|
||||
Condensed Unaudited Consolidated Financial Statements
|
||||
F-78 | ||||
F-80 | ||||
F-81 | ||||
F-82 | ||||
F-83
|
2021
|
2020
|
|||||||
Assets
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 5,458,157 | $ | 7,211,024 | ||||
Accounts receivable, net
|
2,373,721 | 2,513,236 | ||||||
Prepaid expenses
|
318,366 | 306,521 | ||||||
Other current assets
|
99,956 | 99,956 | ||||||
Restricted cash
|
272,563 | 272,404 | ||||||
|
|
|
|
|||||
Total current assets
|
8,522,763 | 10,403,141 | ||||||
|
|
|
|
|||||
Property and Equipment, Net
|
114,124 | 144,626 | ||||||
|
|
|
|
|||||
Other Assets
|
||||||||
Intangible assets, net
|
231,461 | 263,516 | ||||||
Security deposits
|
66,014 | 66,014 | ||||||
|
|
|
|
|||||
Total other assets
|
297,475 | 329,530 | ||||||
|
|
|
|
|||||
Total assets
|
$ | 8,934,362 | $ | 10,877,297 | ||||
|
|
|
|
2021
|
2020
|
|||||||
Liabilities and Stockholders’ Deficit
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$ | 1,012,148 | $ | 915,194 | ||||
Accrued expenses
|
964,389 | 1,297,874 | ||||||
Deferred revenue
|
808,742 | 1,097,680 | ||||||
Due to employees
|
7,819 | 17,885 | ||||||
Note payable
|
— | 1,000,400 | ||||||
|
|
|
|
|||||
Total current liabilities
|
2,793,098 | 4,329,033 | ||||||
|
|
|
|
|||||
Long-Term
Liabilities
|
||||||||
Related party promissory notes
|
7,000,000 | 7,000,000 | ||||||
Deferred rent liability
|
284,074 | 286,836 | ||||||
Deferred revenue
|
131,478 | 73,341 | ||||||
Other
long-term
liabilities
|
100,000 | 100,000 | ||||||
|
|
|
|
|||||
Total
long-term
liabilities
|
7,515,552 | 7,460,177 | ||||||
|
|
|
|
|||||
Total liabilities
|
10,308,650 | 11,789,210 | ||||||
|
|
|
|
|||||
Stockholders’ Deficit
|
||||||||
Series B preferred stock
|
4,551 | 3,904 | ||||||
Series
A-3
preferred stock
|
548 | 548 | ||||||
Series
A-2
preferred stock
|
71 | 71 | ||||||
Series
A-1
preferred stock
|
569 | 569 | ||||||
Common stock
|
33 | 33 | ||||||
Additional
paid-in
capital
|
89,194,348 | 84,020,231 | ||||||
Accumulated deficit
|
(90,574,407 | ) | (84,937,269 | ) | ||||
|
|
|
|
|||||
Total stockholders’ deficit
|
(1,374,288 | ) | (911,913 | ) | ||||
|
|
|
|
|||||
Total liabilities and stockholders’ deficit
|
$ | 8,934,362 | $ | 10,877,297 | ||||
|
|
|
|
2021
|
2020
|
|||||||
Revenue
|
||||||||
Retail station lease
|
$ | 2,998,181 | $ | 2,959,911 | ||||
Station unit sales
|
— | 11,400 | ||||||
Non-retail
station lease and platform
|
1,601,944 | 1,286,056 | ||||||
Other
|
20,950 | 33,048 | ||||||
|
|
|
|
|||||
Total revenue
|
4,621,075 | 4,290,415 | ||||||
|
|
|
|
|||||
Cost of Revenue
|
||||||||
Depreciation of Higi stations
|
30,190 | 92,112 | ||||||
Other
|
3,566,833 | 3,158,260 | ||||||
|
|
|
|
|||||
Total cost of revenue
|
3,597,023 | 3,250,372 | ||||||
|
|
|
|
|||||
Gross income
|
1,024,052 | 1,040,043 | ||||||
Operating Expenses
|
6,969,267 | 6,400,321 | ||||||
|
|
|
|
|||||
Operating loss
|
(5,945,215 | ) | (5,360,278 | ) | ||||
|
|
|
|
|||||
Other (Income) Expense
|
||||||||
Interest expense
|
610,816 | 1,040,286 | ||||||
Loss on discount related to conversion of promissory notes
|
— | 4,636,313 | ||||||
Gain on extinguishment of debt
|
— | (3,000,000 | ) | |||||
Forgiveness of paycheck protection program funds
|
(1,010,020 | ) | — | |||||
Depreciation and amortization
|
32,367 | 32,367 | ||||||
Net other expense / (income)
|
(366,837 | ) | 2,708,966 | |||||
|
|
|
|
|||||
Income Tax Expense
|
58,761 | 54,556 | ||||||
|
|
|
|
|||||
Net loss
|
$ | (5,637,139 | ) | $ | (8,123,800 | ) | ||
|
|
|
|
2021
|
2020
|
|||||||
Cash Flows From Operating Activities
|
||||||||
Net loss
|
$ | (5,637,139 | ) | $ | (8,123,800 | ) | ||
Adjustments to reconcile net loss to net cash flows from operating activities:
|
||||||||
Depreciation
|
30,502 | 92,422 | ||||||
Amortization
|
32,055 | 32,055 | ||||||
Stock compensation expense
|
24,784 | 18,945 | ||||||
Change in allowance for doubtful accounts
|
— | 56,095 | ||||||
Non-cash
interest expense related to convertible promissory notes
|
— | 467,594 | ||||||
Loss on discount related to convertible promissory notes
|
— | 4,636,313 | ||||||
Gain on extinguishment of debt
|
(1,000,400 | ) | (3,000,000 | ) | ||||
Change in deferred rent
|
(2,762 | ) | 1,273 | |||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable
|
139,515 | 671,502 | ||||||
Prepaid expenses and other current assets and other assets
|
(11,844 | ) | 101,128 | |||||
Stations held for sale
|
||||||||
Accounts payable
|
96,954 | 50,214 | ||||||
Accrued expenses
|
(333,485 | ) | (245,010 | ) | ||||
Deferred revenue
|
(230,802 | ) | (299,400 | ) | ||||
|
|
|
|
|||||
Net cash flows from operating activities
|
(6,892,622 | ) | (5,540,669 | ) | ||||
|
|
|
|
|||||
Cash Flows From Investing Activities
|
||||||||
Capital expenditures
|
— | (46,141 | ) | |||||
Decrease in amounts due to employees
|
(10,066 | ) | (40,867 | ) | ||||
|
|
|
|
|||||
Net cash flows from investing activities
|
(10,066 | ) | (87,008 | ) | ||||
|
|
|
|
|||||
Cash Flows From Financing Activities
|
||||||||
Proceeds from issuance of convertible promissory notes
|
— | 2,117,249 | ||||||
Proceeds from issuance of Series B preferred stock
|
5,149,980 | 6,999,663 | ||||||
Proceeds from exercised common stock units
|
— | 6,156 | ||||||
Proceeds of related party promissory note
|
— | 5,000,000 | ||||||
Principal payments on related party promissory note
|
— | (5,000,000 | ) | |||||
Proceeds from Paycheck Protection Program
|
— | 1,002,538 | ||||||
|
|
|
|
|||||
Net cash flows from financing activities
|
5,149,980 | 10,125,606 | ||||||
|
|
|
|
|||||
Net change in cash and cash equivalents
|
(1,752,708 | ) | 4,497,929 | |||||
Cash, Cash Equivalents and Restricted Cash, Beginning
|
7,483,428 | 3,008,433 | ||||||
|
|
|
|
|||||
Cash, Cash Equivalents and Restricted Cash, Ending
|
$ | 5,730,720 | $ | 7,506,362 | ||||
|
|
|
|
1.
|
Summary of Significant Accounting Policies
|
2.
|
Property and Equipment, Net
|
June 30, 2021
|
December 31, 2020
|
|||||||
Higi stations
|
$ | 42,985,661 | $ | 42,985,661 | ||||
Leasehold improvements
|
6,688 | 6,688 | ||||||
Less: accumulated depreciation
|
42,878,225 | 42,847,723 | ||||||
|
|
|
|
|||||
Property and equipment, net
|
$ | 114,124 | $ | 144,626 | ||||
|
|
|
|
3.
|
Paycheck Protection Program
|
4.
|
Promissory Notes
|
5.
|
Stockholders’ Equity
|
6.
|
Commitments and Contingencies
|
Amount
|
||||
Years ending December 31:
|
||||
2021 (Remainder)
|
$ | 166,820 | ||
2022
|
340,567 | |||
2023
|
349,082 | |||
2024
|
357,809 | |||
2025
|
366,754 | |||
2026
|
375,923 | |||
Thereafter
|
713,082 | |||
|
|
|||
Total
|
$ | 2,670,037 | ||
|
|
7.
|
Major Customers
|
8.
|
Stock-Based Compensation
|
9.
|
Supplemental Cash Flow Information
|
2021
|
2020
|
|||||||
Cash and cash equivalents
|
$ | 5,458,157 | $ | 7,231,742 | ||||
Restricted cash
|
272,563 | 274,620 | ||||||
|
|
|
|
|||||
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows
|
$ | 5,730,720 | $ | 7,506,362 | ||||
|
|
|
|
|||||
Supplemental Cash Flow Disclosures
|
||||||||
Cash paid for interest
|
$ | 615,254 | $ | 608,514 | ||||
|
|
|
|
|||||
Cash paid for income taxes
|
$ | 228,195 | $ | 81,967 | ||||
|
|
|
|
|||||
Noncash Investing and Financing Activities
|
||||||||
Conversion of promissory notes to Series B Preferred Stock
|
$ | — | $ | $14,048,998 | ||||
|
|
|
|
10.
|
Subsequent Events
|
Assets
|
||||
Current Assets
|
||||
Cash and cash equivalents
|
$ | 7,211,024 | ||
Accounts receivable, net
|
2,513,236 | |||
Prepaid expenses
|
306,521 | |||
Other current assets
|
99,956 | |||
Restricted cash
|
272,404 | |||
|
|
|||
Total current assets
|
10,403,141 | |||
|
|
|||
Property and Equipment, Net
|
144,626 | |||
|
|
|||
Other Assets
|
||||
Intangible assets, net
|
263,516 | |||
Security deposits
|
66,014 | |||
|
|
|||
Total other assets
|
329,530 | |||
|
|
|||
Total assets
|
$ | 10,877,297 | ||
|
|
Liabilities and Stockholders’ Deficit
|
||||
Current Liabilities
|
||||
Accounts payable
|
$ | 915,194 | ||
Accrued expenses
|
1,297,874 | |||
Deferred revenue
|
1,097,680 | |||
Due to employees
|
17,885 | |||
Note payable
|
1,000,400 | |||
|
|
|||
Total current liabilities
|
4,329,033 | |||
|
|
|||
Long-Term
Liabilities
|
||||
Related party promissory notes
|
7,000,000 | |||
Deferred rent liability
|
286,836 | |||
Deferred revenue
|
73,341 | |||
Other
long-term
liabilities
|
100,000 | |||
|
|
|||
Total
long-term
liabilities
|
7,460,177 | |||
|
|
|||
Total liabilities
|
11,789,210 | |||
|
|
|||
Stockholders’ Deficit
|
||||
Series B preferred stock
|
3,904 | |||
Series
A-3
preferred stock
|
548 | |||
Series
A-2
preferred stock
|
71 | |||
Series
A-1
preferred stock
|
569 | |||
Common stock
|
33 | |||
Additional
paid-in
capital
|
84,020,231 | |||
Accumulated deficit
|
(84,937,269 | ) | ||
|
|
|||
Total stockholders’ deficit
|
(911,913 | ) | ||
|
|
|||
Total liabilities and stockholders’ deficit
|
$ | 10,877,297 | ||
|
|
Revenue
|
||||
Retail station lease
|
$ | 5,818,075 | ||
Station unit sales
|
41,000 | |||
Non-retail
station lease and platform
|
3,547,850 | |||
Other
|
79,559 | |||
|
|
|||
Total revenue
|
9,486,484 | |||
|
|
|||
Cost of Revenue
|
||||
Depreciation of Higi stations
|
151,104 | |||
Other
|
6,675,854 | |||
|
|
|||
Total cost of revenue
|
6,826,958 | |||
|
|
|||
Gross income
|
2,659,526 | |||
Operating Expenses
|
12,533,698 | |||
|
|
|||
Operating loss
|
(9,874,172 | ) | ||
|
|
|||
Other (Income) Expense
|
||||
Interest expense
|
1,660,100 | |||
Loss on discount related to conversion of promissory notes
|
4,636,313 | |||
Gain on extinguishment of debt
|
(3,000,000 | ) | ||
Other expenses
|
250,000 | |||
Gain on disposal of fixed assets
|
(15,000 | ) | ||
|
|
|||
Net other expense
|
3,531,413 | |||
|
|
|||
Income Tax Expense
|
95,070 | |||
|
|
|||
Net loss
|
$ | (13,500,655 | ) | |
|
|
Series B
Preferred Stock** |
Series
A-3
Preferred Stock** |
Series
A-2
Preferred Stock** |
Series
A-1
Preferred Stock** |
Common
Stock** |
Additional
Paid-in
Capital |
Accumulated
Deficit |
Total
Stockholders’
Deficit
|
|||||||||||||||||||||||||
Balances, December 31, 2019
|
— | 548 | 71 | 569 | 33 | 53,032,165 | (71,436,614 | ) | (18,403,228 | ) | ||||||||||||||||||||||
Net loss
|
— | — | — | — | — | — | (13,500,655 | ) | (13,500,655 | ) | ||||||||||||||||||||||
Conversion of notes payable into Series B Preferred Stock
|
2,329 | — | — | — | — | 14,406,659 | — | 14,408,988 | ||||||||||||||||||||||||
Discount on conversion of notes payable to Series B Preferred Stock
|
— | — | — | — | — | 4,636,313 | — | 4,636,313 | ||||||||||||||||||||||||
Issuance of Series B Preferred Stock
|
1,575 | — | — | — | — | 12,044,929 | — | 12,046,504 | ||||||||||||||||||||||||
Issuance costs of Series B Preferred Stock
|
— | — | — | — | — | (166,454 | ) | — | (166,454 | ) | ||||||||||||||||||||||
Exercise of common stock options
|
— | — | — | — | — | 6,156 | — | 6,156 | ||||||||||||||||||||||||
Stock compensation expense
|
— | — | — | — | — | 60,463 | — | 60,463 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balances, December 31, 2020
|
$ | 3,904 | $ | 548 | $ | 71 | $ | 569 | $ | 33 | $ | 84,020,231 | $ | (84,937,269 | ) | $ | (911,913 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** |
See Note 7 for shares issued, authorized and outstanding
|
Cash Flows From Operating Activities
|
||||
Net loss
|
$ | (13,500,655 | ) | |
Adjustments to reconcile net loss to net cash flows from operating activities:
|
||||
Depreciation
|
151,726 | |||
Amortization
|
64,112 | |||
Stock compensation expense
|
60,463 | |||
Change in allowance for doubtful accounts
|
(517,601 | ) | ||
Accrued interest expense related to convertible promissory notes
|
467,594 | |||
Loss on discount related to convertible promissory notes
|
4,636,313 | |||
Gain on extinguishment of debt
|
(3,000,000 | ) | ||
Gain on disposal of property and equipment
|
(15,000 | ) | ||
Change in deferred rent
|
1,202 | |||
Changes in assets and liabilities:
|
||||
Accounts receivable
|
686,399 | |||
Prepaid expenses and other current assets and other assets
|
3,417 | |||
Accounts payable
|
96,091 | |||
Accrued expenses
|
148,995 | |||
Deferred revenue
|
190,749 | |||
Other
long-term
liabilities
|
100,000 | |||
|
|
|||
Net cash flows from operating activities
|
(10,426,195 | ) | ||
|
|
|||
Cash Flows From Investing Activities
|
||||
Capital expenditures
|
(93,745 | ) | ||
Decrease in amounts due to employees
|
(23,920 | ) | ||
Proceeds from sale of property and equipment
|
15,000 | |||
|
|
|||
Net cash flows from investing activities
|
(102,665 | ) | ||
|
|
|||
Cash Flows From Financing Activities
|
||||
Proceeds from issuance of convertible promissory notes
|
2,117,249 | |||
Proceeds from issuance of Series B preferred stock
|
12,046,504 | |||
Professional fees related to issuance of Series B preferred stock
|
(166,454 | ) | ||
Proceeds from exercised common stock units
|
6,156 | |||
Proceeds of related party promissory note
|
5,000,000 | |||
Principal payments on related party promissory note
|
(5,000,000 | ) | ||
Proceeds from note payable
|
1,000,400 | |||
|
|
|||
Net cash flows from financing activities
|
15,003,855 | |||
|
|
|||
Net change in cash and cash equivalents
|
4,474,995 | |||
Cash, Cash Equivalents and Restricted Cash, Beginning
|
3,008,433 | |||
|
|
|||
Cash, Cash Equivalents and Restricted Cash, Ending
|
$ | 7,483,428 | ||
|
|
1.
|
Summary of Significant Accounting Policies
|
Higi stations
|
3 years | |
Leasehold improvements
|
3 - 5 years
|
• |
Identification of the contract or contracts, with a customer
|
• |
Identification of the performance obligations in the contract
|
• |
Determination of the transaction price
|
• |
Allocation of the transaction price to the performance obligations in the contract
|
• |
Recognition of revenue when or as, the Company satisfies a performance obligation
|
2.
|
Property and Equipment, Net
|
Higi Stations
|
$ | 42,985,661 | ||
Leasehold improvements
|
6,688 | |||
Less accumulated depreciation
|
(42,847,723 | ) | ||
|
|
|||
Property and equipment, net
|
$ | 144,626 | ||
|
|
3.
|
Intangible Assets, Net
|
Gross Carrying
Value |
Accumulated
Amortization |
Net Intangible
Assets |
Estimated Useful
Lives (Years) |
|||||||||||||
Patent license
|
$ | 388,950 | $ | (281,988 | ) | $ | 106,962 | 10 | ||||||||
Trade name
|
252,167 | (95,613 | ) | 156,554 | 10 | |||||||||||
|
|
|
|
|
|
|||||||||||
$ | 641,117 | $ | (377,601 | ) | $ | 263,516 | ||||||||||
|
|
|
|
|
|
Trade Name
|
Patent License
|
|||||||
Years ending December 31:
|
||||||||
2021
|
$ | 25,217 | $ | 38,895 | ||||
2022
|
25,217 | 38,895 | ||||||
2023
|
25,217 | 29,172 | ||||||
2024
|
25,217 | — | ||||||
2025
|
25,217 | — | ||||||
Thereafter
|
30,469 | — | ||||||
|
|
|
|
|||||
Total
|
$ | 156,554 | $ | 106,962 | ||||
|
|
|
|
4.
|
Accrued Expenses
|
Accrued compensation
|
$ | 419,129 | ||
Accrued legal
|
76,328 | |||
Accrued settlements
|
50,000 | |||
Accrued sales and personal property taxes
|
160,345 | |||
Accrued international taxes
|
119,365 | |||
Accrued medical excise taxes
|
136,600 | |||
Accrued interest
|
111,977 | |||
Accrued revenue share
|
31,999 | |||
Accrued payroll benefits
|
34,300 | |||
Other accrued expenses
|
157,831 | |||
|
|
|||
Total
|
$ | 1,297,874 | ||
|
|
5.
|
Paycheck Protection Program
|
6.
|
Promissory Notes
|
7.
|
Stockholders’ Equity
|
8.
|
Commitments and Contingencies
|
Amount
|
||||
Years ending December 31:
|
||||
2021
|
$ | 332,261 | ||
2022
|
340,567 | |||
2023
|
349,082 | |||
2024
|
357,809 | |||
2025
|
366,754 | |||
Thereafter
|
1,089,005 | |||
|
|
|||
Total
|
$ | 2,835,478 | ||
|
|
9.
|
Income Taxes
|
Current:
|
||||
Federal
|
$ | — | ||
State
|
11,093 | |||
Foreign
|
83,977 | |||
|
|
|||
Total income tax expense
|
$ | 95,070 | ||
|
|
Deferred income tax assets:
|
||||
Property and equipment
|
$ | 247,464 | ||
Goodwill
|
10,050 | |||
Reserves and accruals
|
264,966 | |||
Federal and state net operating loss carryforwards
|
13,235,475 | |||
Stock compensation
|
17,995 | |||
Charitable contributions
|
2,919 | |||
|
|
|||
Total deferred income tax assets
|
13,778,869 | |||
|
|
|||
Deferred income tax liabilities:
|
||||
Intangible assets
|
(46,318 | ) | ||
|
|
|||
Total deferred income tax liabilities
|
(46,318 | ) | ||
|
|
|||
Net deferred income tax assets
|
13,732,551 | |||
Valuation allowance
|
(13,732,551 | ) | ||
|
|
|||
Total net deferred income tax assets
|
$ | — | ||
|
|
10.
|
Major Customers
|
11.
|
Stock-Based
Compensation
|
Number of
Shares |
Weighted Average
Exercise Price Per Share |
Weighted Average
Remaining Life (years) |
||||||||||
Balance at December 31, 2019
|
620,828 | 0.90 | 8.87 | |||||||||
Granted
|
6,567,816 | 0.01 | — | |||||||||
Exercised
|
(6,840 | ) | 0.90 | — | ||||||||
Forfeited
|
(106,852 | ) | 0.83 | — | ||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2020
|
7,074,952 | $ | 0.01 | 9.89 | ||||||||
|
|
|
|
|
|
|||||||
Exercisable at December 31, 2020
|
3,423,900 | $ | 0.01 | 9.89 | ||||||||
|
|
|
|
|
|
Number of
Shares |
||||
Available for grant at December 31, 2019
|
2,510,698 | |||
Additional authorized
|
13,404,722 | |||
Stock options granted
|
(6,567,816 | ) | ||
Stock options forfeited
|
106,852 | |||
|
|
|||
Available for grant at December 31, 2020
|
9,454,456 | |||
|
|
Expected volatility
|
100 percent | |
Expected dividends
|
N/A | |
Expected life of option (in years)
|
6.25 | |
Risk-free
interest rate
|
0.50 percent |
12.
|
Retirement Plan
|
13.
|
Supplemental Cash Flow Information
|
Cash and cash equivalents
|
$ | 7,211,024 | ||
Restricted cash
|
272,404 | |||
|
|
|||
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows
|
$ | 7,483,428 | ||
|
|
|||
Supplemental Cash Flow Disclosures
|
||||
Cash paid for interest
|
$ | 1,189,474 | ||
|
|
|||
Cash paid for income taxes
|
$ | 106,512 | ||
|
|
|||
Noncash Investing and Financing Activities
|
||||
Conversion of promissory notes to Series B Preferred Stock
|
$ | 14,408,988 | ||
|
|
14.
|
Subsequent Events
|
ASSETS
|
||||
Current Assets
|
||||
Cash
|
$ | 293,634 | ||
Prepaid expenses
|
998 | |||
|
|
|||
Total current assets
|
294,632 | |||
Deferred offering costs
|
247,735 | |||
|
|
|||
Total Assets
|
$
|
542,367
|
|
|
|
|
|||
LIABILITIES AND STOCKHOLDER’S EQUITY
|
||||
Current liabilities
|
||||
Accrued expenses
|
$ | 1,863 | ||
Accrued offering costs
|
216,369 | |||
Advances from related party
|
4,220 | |||
Promissory note — related party
|
300,000 | |||
|
|
|||
Total Liabilities
|
|
522,452
|
|
|
|
|
|||
Commitments and Contingencies
|
||||
Stockholder’s Equity
|
||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding
|
— | |||
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; no shares issued and outstanding
|
— | |||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 8,625,000 shares issued and outstanding
(1)
|
863 | |||
Additional
paid-in
capital
|
24,137 | |||
Accumulated deficit
|
(5,085 | ) | ||
|
|
|||
Total Stockholder’s Equity
|
|
19,915
|
|
|
|
|
|||
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY
|
$
|
542,367
|
|
|
|
|
(1) |
Included an aggregate of up to 1,125,000 shares of Class B common stock that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised (see Note 5). On February 4, 2021, the Company effected a
1.2-for-1
|
Formation and operating costs
|
$ | 5,085 | ||
|
|
|||
Net Loss
|
$
|
(5,085
|
)
|
|
|
|
|||
Weighted average shares outstanding, basic and diluted
(1)
|
7,500,000 | |||
|
|
|||
Basic and diluted net loss per common shares
|
$
|
(0.00
|
)
|
|
|
|
(1) |
Excluded an aggregate of up to 1,125,000 shares of Class B common stock that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised (see Note 5). On February 4, 2021, the Company effected a
1.2-for-1
|
Class B
Common Stock
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Total
Stockholder’s
Equity
|
|||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||
Balance — December 1, 2020 (inception)
|
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|||||
Issuance of Class B common stock to Sponsor
(1)
|
8,625,000 | 863 | 24,137 | — | 25,000 | |||||||||||||||
Net loss
|
— | — | — | (5,085 | ) | (5,085 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance — December 31, 2020
|
|
8,625,000
|
|
$
|
863
|
|
$
|
24,137
|
|
$
|
(5,085
|
)
|
$
|
19,915
|
|
|||||
|
|
|
|
|
|
|
|
|
|
(1) |
Included an aggregate of up to 1,125,000 shares of Class B common stock that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised (see Note 5). On February 4, 2021, the Company effected a
1.2-for-1
|
Cash Flows from Operating Activities:
|
||||
Net loss
|
$ | (5,085 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||
Changes in operating assets and liabilities:
|
||||
Prepaid expenses
|
(998 | ) | ||
Accrued expenses
|
1,863 | |||
|
|
|||
Net cash used in operating activities
|
(4,220 | ) | ||
|
|
|||
Cash Flows from Financing Activities:
|
||||
Proceeds from issuance of Class B common stock to Sponsor
|
25,000 | |||
Proceeds from advances from related party
|
4,220 | |||
Proceeds from promissory note — related party
|
300,000 | |||
Payment of offering costs
|
(31,366 | ) | ||
|
|
|||
Net cash provided by financing activities
|
297,854 | |||
|
|
|||
Net Change in Cash
|
293,634 | |||
Cash – Beginning
|
— | |||
|
|
|||
Cash – Ending
|
$ | 293,634 | ||
|
|
|||
Non-cash
investing and financing activities:
|
||||
Deferred offering costs included in accrued offering costs
|
$ | 216,369 | ||
|
|
• |
in whole and not in part;
|
• |
at a price of $0.01 per Public Warrant;
|
• |
upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
|
• |
if, and only if, the reported closing price of the shares of Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a
30-trading
day period commencing after the warrants become exercisable and ending three business days before Alkuri sends to the notice of redemption to the warrant holders.
|
• |
in whole and not in part;
|
• |
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the shares of Class A common stock;
|
• |
if, and only if, the closing price of Class A common stock equals or exceeds $10.00 per public share (as adjusted) for any 20 trading days within the
30-trading
day period ending three trading days before Alkuri sends the notice of redemption to the warrant holders; and
|
• |
if the closing price of Class A common stock for any 20 trading days within a
30-trading
day period ending three trading days before Alkuri send notice of redemption to the warrant holders is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.
|
June 30, 2021
|
December 31, 2020
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash
|
$ | 70,821 | $ | 293,634 | ||||
Prepaid expenses
|
986,732 | 998 | ||||||
|
|
|
|
|||||
Total Current Assets
|
|
1,057,553
|
|
|
294,632
|
|
||
Deferred offering costs
|
— | 247,735 | ||||||
Marketable securities held in Trust Account
|
345,022,618 | — | ||||||
|
|
|
|
|||||
Total Assets
|
$
|
346,080,171
|
|
$
|
542,367
|
|
||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities
|
||||||||
Accrued expenses
|
$ | 4,099,486 | $ | 1,863 | ||||
Accrued offering costs
|
84,736 | 216,369 | ||||||
Advances from related party
|
— | 4,220 | ||||||
Promissory note – related party
|
— | 300,000 | ||||||
|
|
|
|
|||||
Total Current Liabilities
|
4,184,222 | 522,452 | ||||||
Warrant liability
|
21,492,500 | — | ||||||
Deferred underwriting fee payable
|
12,075,000 | — | ||||||
|
|
|
|
|||||
Total Liabilities
|
|
37,751,722
|
|
|
522,452
|
|
||
Commitments
|
||||||||
Class A common stock subject to possible redemption, 30,332,844 and no shares at redemption value as of June 30, 2021 and December 31, 2020, respectively
|
303,328,440 | — | ||||||
Stockholders’ Equity
|
||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued and outstanding in at June 30, 2021 and December 31, 2020, respectively
|
— | — | ||||||
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; 4,167,156 and no shares issued and outstanding (excluding 30,332,844 and no shares subject to possible redemption) as of June 30, 2021 and December 31, 2020, respectively
|
417 | — | ||||||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 8,625,000 shares issued and outstanding at June 30, 2021 and December 31, 2020
|
863 | 863 | ||||||
Additional
paid-in
capital
|
12,636,290 | 24,137 | ||||||
Accumulated deficit
|
(7,637,561 | ) | (5,085 | ) | ||||
|
|
|
|
|||||
Total Stockholders’ Equity
|
|
5,000,009
|
|
|
19,915
|
|
||
|
|
|
|
|||||
Total Liabilities and Stockholders’ Equity
|
$
|
346,080,171
|
|
$
|
542,367
|
|
||
|
|
|
|
Three Months Ended
|
Six Months Ended
|
|||||||
June 30,
|
June 30,
|
|||||||
2021
|
2021
|
|||||||
Operating and formation costs
|
$ | 4,191,749 | $ | 5,266,438 | ||||
|
|
|
|
|||||
Loss from operations
|
|
(4,191,749
|
)
|
|
(5,266,438
|
)
|
||
Other income (loss):
|
||||||||
Change in fair value of warrant liability
|
(2,296,917 | ) | (2,388,667 | ) | ||||
Interest income – bank
|
7 | 11 | ||||||
Interest earned on marketable securities held in Trust Account
|
12,331 | 22,618 | ||||||
Total other loss, net
|
(2,284,579 | ) | (2,366,038 | ) | ||||
Loss before income taxes
|
(6,476,328 | ) | (7,632,476 | ) | ||||
Benefit (Provision) for income taxes
|
— | — | ||||||
|
|
|
|
|||||
Net loss
|
$
|
(6,476,328
|
)
|
$
|
(7,632,476
|
)
|
||
|
|
|
|
|||||
Weighted average shares outstanding, Class A redeemable common stock
|
30,980,477 | 31,011,419 | ||||||
|
|
|
|
|||||
Basic and diluted earnings per share, Class A redeemable common stock
|
$
|
0.00
|
|
$
|
0.00
|
|
||
|
|
|
|
|||||
Weighted average shares outstanding, Class B
non-redeemable
common stock
|
12,144,523 | 11,104,045 | ||||||
|
|
|
|
|||||
Basic and diluted earnings per share, Class B
non-redeemable
common stock
|
$
|
(0.53
|
)
|
$
|
(0.69
|
)
|
||
|
|
|
|
Class A
|
Class B
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Total
Stockholders’
Equity
|
||||||||||||||||||||||||
Common Stock
|
Common Stock
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||
Balance — January 1, 2021
|
— | $ | — |
|
8,625,000
|
|
$
|
863
|
|
$
|
24,137
|
|
$
|
(5,085
|
)
|
$
|
19,915
|
|
||||||||||
Sale of 34,500,000 Units, net of underwriting discounts and offering expenses
|
34,500,000 | 3,450 | — | — | 314,928,893 | — | 314,932,343 | |||||||||||||||||||||
Sale of 5,933,333 Private Placement Warrants (proceeds received in excess of fair value)
|
— | — | — | — | 1,008,667 | — | 1,008,667 | |||||||||||||||||||||
Common stock subject to possible redemption
|
(30,980,477 | ) | (3,098 | ) | — | — | (309,801,673 | ) | — | (309,804,771 | ) | |||||||||||||||||
Net loss
|
— | — | — | — | — | (1,156,148 | ) | (1,156,148 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance — March 31, 2021
|
|
3,519,523
|
|
$
|
352
|
|
|
8,625,000
|
|
$
|
863
|
|
$
|
6,160,024
|
|
$
|
(1,161,233
|
)
|
$
|
5,000,006
|
|
|||||||
Change in value of Class A common stock subject to redemption
|
647,633 | 65 | — | — | 6,476,266 | — | 6,476,331 | |||||||||||||||||||||
Net loss
|
— | — | — | — | — | (6,476,328 | ) | (6,476,328 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance — June 30, 2021
|
|
4,167,156
|
|
$
|
417
|
|
|
8,625,000
|
|
$
|
863
|
|
$
|
12,636,290
|
|
$
|
(7,637,561
|
)
|
$
|
5,000,009
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
||||
Net loss
|
$ | (7,632,476 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||
Interest earned on marketable securities held in Trust Account
|
(22,618 | ) | ||
Change in fair value of warrant liability
|
2,388,667 | |||
Transaction costs associated with IPO
|
645,038 | |||
Changes in operating assets and liabilities:
|
||||
Prepaid expenses and other current assets
|
(985,734 | ) | ||
Accounts payable and accrued expenses
|
4,097,623 | |||
|
|
|||
Net cash used in operating activities
|
|
(1,509,500
|
)
|
|
|
|
|||
Cash Flows from Investing Activities:
|
||||
Investment of cash in Trust Account
|
(345,000,000 | ) | ||
|
|
|||
Net cash used in investing activities
|
|
(345,000,000
|
)
|
|
|
|
|||
Cash Flows from Financing Activities:
|
||||
Proceeds from sale of Units, net of underwriting discounts paid
|
338,100,000 | |||
Proceeds from sale of Private Placement Warrants
|
8,900,000 | |||
Advances from related party
|
1,194,375 | |||
Repayment of advances from related party
|
(1,198,595 | ) | ||
Repayment of promissory note – related party
|
(300,000 | ) | ||
Payment of offering costs
|
(409,093 | ) | ||
|
|
|||
Net cash used in financing activities
|
|
346,286,687
|
|
|
|
|
|||
Net Change in Cash
|
|
(222,813
|
)
|
|
Cash – Beginning of period
|
293,634 | |||
|
|
|||
Cash – End of period
|
$
|
70,821
|
|
|
|
|
|||
Non-Cash
investing and financing activities:
|
||||
Offering costs included in accrued offering costs
|
$ | 84,736 | ||
|
|
|||
Initial classification of Class A common stock subject to possible redemption
|
$ | 310,313,887 | ||
|
|
|||
Change in value of Class A common stock subject to possible redemption
|
$ | (6,985,447 | ) | |
|
|
|||
Deferred underwriting fee payable
|
$ | 12,075,000 | ||
|
|
|||
Initial classification of warrant liability
|
19,103,833 | |||
|
|
Three Months
Ended June 30, 2021 |
Six Months
Ended June 30, 2021 |
|||||||
Class A common stock subject to possible redemption
|
||||||||
Numerator: Earnings allocable to Class A common stock subject to possible redemption
|
||||||||
Interest earned on marketable securities held in Trust Account
|
$ | 12,331 | $ | 22,618 | ||||
Less: interest available for payment of taxes
|
(12,331 | ) | (22,618 | ) | ||||
|
|
|
|
|||||
Net Income attributable
|
$
|
—
|
|
$
|
—
|
|
||
|
|
|
|
|||||
Denominator: Weighted Average Class A ordinary shares subject to possible redemption
|
||||||||
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption
|
|
30,980,477
|
|
|
31,011,419
|
|
||
|
|
|
|
|||||
Basic and diluted net income per share, Class A common stock subject to possible redemption
|
$
|
0.00
|
|
$
|
0.00
|
|
||
|
|
|
|
|||||
Non-Redeemable
Common Stock
|
||||||||
Numerator: Net Loss minus Net Earnings
|
||||||||
Net loss
|
$ | (6,476,328 | ) | $ | (7,632,476 | ) | ||
Less: Net income allocable to Class A common stock subject to possible redemption
|
— | — | ||||||
|
|
|
|
|||||
Non-Redeemable
Net Loss
|
$
|
(6,476,328
|
)
|
$
|
(7,632,476
|
)
|
||
|
|
|
|
|||||
Denominator: Weighted Average
Non-redeemable
common stock
|
||||||||
Basic and diluted weighted average shares outstanding,
Non-Redeemable
Common stock
|
|
12,144,523
|
|
|
11,104,045
|
|
||
|
|
|
|
|||||
Basic and diluted net loss per share,
Non-Redeemable
Common stock
|
$
|
(0.53
|
)
|
$
|
(0.69
|
)
|
||
|
|
|
|
• |
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
|
• |
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
|
• |
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
• |
in whole and not in part;
|
• |
at a price of $0.01 per Public Warrant;
|
• |
upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
|
• |
if, and only if, the reported closing price of the shares of Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a
30-trading
day period commencing after the warrants become exercisable and ending three business days before the Company sends to the notice of redemption to the warrant holders.
|
• |
in whole and not in part;
|
• |
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the shares of Class A common stock;
|
• |
if, and only if, the closing price of Class A common stock equals or exceeds $10.00 per public share (as adjusted) for any 20 trading days within
the 30-trading
day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and
|
• |
if the closing price of Class A common stock for any 20 trading days within
a 30-trading
day period ending three trading days before the Company send notice of redemption to the warrant holders is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.
|
Level 1: |
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
|
Level 2: |
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
|
Level 3: |
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
|
Description
|
Level
|
June 30, 2021
|
||||||
Assets:
|
||||||||
Cash and marketable securities held in Trust Account
|
1 | $ | 345,022,618 | |||||
Liabilities:
|
||||||||
Warrant Liability - Public Warrants
|
1 | 12,592,500 | ||||||
Warrant Liability - Private Placement Warrants
|
3 | 8,900,000 |
February 9, 2021
(Initial Measurement) |
June 30, 2021
|
|||||||||||||||
Input
|
Public
Warrants |
Private
Warrants |
Public
Warrants |
Private
Warrants |
||||||||||||
Risk-free interest rate
|
0.74 | % | 0.74 | % | 0.91 | % | 0.91 | % | ||||||||
Expected term (years)
|
6.57 | 6.57 | 5.25 | 5.25 | ||||||||||||
Expected volatility
|
20 | % | 20 | % | 21.1 | % | 21.1 | % | ||||||||
Exercise price
|
$ | 11.50 | $ | 11.50 | $ | 11.50 | $ | 11.50 | ||||||||
Fair value of Units
|
$ | 9.68 | $ | 9.68 | $ | 9.89 | $ | 9.89 | ||||||||
Probability of completing a business combination
|
88.3 | % | 88.3 | % | 90.0 | % | 90.0 | % |
Private
Placement |
Public
|
Warrant
Liabilities |
||||||||||
Fair value as of January 1, 2021
|
$ | — | $ | — | $ | — | ||||||
Initial measurement on February 9, 2021 (including over-allotment)
|
7,891,333 | 11,212,500 | 19,103,833 | |||||||||
Change in valuation inputs or other assumptions
|
178,000 | (86,250 | ) | 91,750 | ||||||||
|
|
|
|
|
|
|||||||
Fair value as of March 31, 2021
|
$ | 8,069,333 | $ | 11,126,250 | $ | 19,195,583 | ||||||
|
|
|
|
|
|
|||||||
Change in valuation inputs or other assumptions
|
830,667 | 1,466,250 | 2,296,917 | |||||||||
|
|
|
|
|
|
|||||||
Fair value as of June 30, 2021
|
$ | 8,900,000 | $ | 12,592,500 | $ | 21,492,500 | ||||||
|
|
|
|
|
|
Item 6.
|
Indemnification of Directors and Officers
|
(a) |
any liabilities incurred in defending any proceedings (whether civil or criminal):
|
(i) |
in which judgment is given in his or her favor or he or she is acquitted;
|
(ii) |
which are discontinued otherwise than for some benefit conferred by him or her or on his or her behalf or some detriment suffered by him or her; or
|
(iii) |
which are settled on terms which include such benefit or detriment and, in the opinion of a majority of the directors of the company (excluding any director who conferred such benefit or on whose behalf such benefit was conferred or who suffered such detriment), he or she was substantially successful on the merits in his or her resistance to the proceedings; or
|
(b) |
any liability incurred otherwise than to the company if he or she acted in good faith with a view to the best interests of the company;
|
(c) |
any liability incurred in connection with an application made under Article 212 of the Jersey Companies Law in which relief is granted to him or her by the court; or
|
(d) |
any liability against which the company normally maintains insurance for persons other than directors.
|
Item 7.
|
Recent Sales of Unregistered Securities
|
Item 8.
|
Exhibits and Financial Statements Schedules
|
BABYLON HOLDINGS LIMITED
|
||
By: | /s/ Ali Parsadoust | |
Name: | Ali Parsadoust | |
Title: | Chief Executive Officer |
Signature
|
Title
|
Date
|
||
/s/ Ali Parsadoust
Ali Parsadoust
|
Director and Chief Executive Officer (
Principal Executive Officer
|
November 8, 2021 | ||
/s/ Charles Steel
Charles Steel
|
Chief Financial Officer
Principal Financial and Accounting Officer
|
November 8, 2021 | ||
Mohannad AlBlehed
|
Director |
|
||
/s/ Per Brilioth
Per Brilioth
|
Director | November 8, 2021 | ||
/s/ Georgi Ganev
Georgi Ganev
|
Director | November 8, 2021 | ||
/s/ Mairi Johnson
Mairi Johnson
|
Director | November 8, 2021 | ||
David Warren
|
Director |
BABYLON INC.
|
||
By: | /s/ Stacy Saal | |
Name: Stacy Saal | ||
Title: Chief Operating Officer |
Exhibit 4.5
SHEARMAN & STERLING
EXECUTION VERSION
Dated 8 October 2021
BABYLON HOLDINGS LIMITED
as Issuer
- and
THE ENTITIES LISTED HEREIN AS NOTE SUBSCRIBERS
as Note Subscribers
Up to US$200,000,000
NOTE SUBSCRIPTION AGREEMENT
WE OPERATE IN THE UK AND ITALY AS SHEARMAN & STERLING (LONDON) LLP, A LIMITED LIABILITY PARTNERSHIP ORGANISED IN THE UNITED STATES UNDER THE LAWS OF THE STATE OF DELAWARE, WHICH LAWS LIMIT THE PERSONAL LIABILITY OF PARTNERS. SHEARMAN & STERLING (LONDON) LLP IS AUTHORISED AND REGULATED BY THE SOLICITORS REGULATION AUTHORITY (FIRM SRA NUMBER 211340). A LIST OF ALL PARTNERS NAMES, WHICH INCLUDES SOLICITORS AND REGISTERED FOREIGN LAWYERS, IS OPEN FOR INSPECTION AT THE ABOVE ADDRESS. EACH PARTNER OF SHEARMAN & STERLING (LONDON) LLP IS ALSO A PARTNER OF SHEARMAN & STERLING LLP WHICH HAS OFFICES IN THE OTHER CITIES NOTED ABOVE.
TABLE OF CONTENTS
Clause | Headings | Page | ||||
1. |
DEFINITIONS AND INTERPRETATION |
1 | ||||
2. |
ISSUE OF THE NOTES |
6 | ||||
3. |
CONDITIONS |
7 | ||||
4. |
CLOSING |
9 | ||||
5. |
REPRESENTATIONS |
10 | ||||
6. |
CONFIDENTIALITY |
10 | ||||
7. |
OTHER PROVISIONS |
12 | ||||
SCHEDULE 1 THE NOTE SUBSCRIBERS |
19 | |||||
SCHEDULE 2 REPRESENTATIONS |
20 | |||||
SCHEDULE 3 SHARE CAPITAL OF THE ISSUER |
26 |
THIS NOTE SUBSCRIPTION AGREEMENT (the Agreement) is made on 8 October 2021
BETWEEN:
(1) |
BABYLON HOLDINGS LIMITED, a company incorporated in Jersey under registration number 115471 whose registered office is 31 Esplanade, St. Helier, Jersey JE2 3QA (the Issuer); and |
(2) |
THE ENTITIES listed in Schedule 1 (The Note Subscribers) (the Note Subscribers and each a Note Subscriber), |
(each a Party and together the Parties).
WHEREAS:
(A) |
On the Closing Date (as defined below), the Issuer plans to issue to the Note Subscribers up to US$200,000,000 Notes due 2026 (the Notes). |
(B) |
The Notes shall be constituted by way of a deed poll in the Agreed Form to be entered into by the Issuer (the Deed Poll) on the Closing Date and shall have the terms and conditions (the Conditions) set out in Schedule 1 to the Deed Poll. |
(C) |
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act), and may not be offered or sold directly or indirectly within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. |
(D) |
The offering of Notes is being made by the Issuer in a private placement transaction in a manner not requiring registration under the Securities Act. |
(E) |
The Notes will be represented by certificates (each, a Certificate and together, the Certificates), duly executed and registered in the Register in the name of each Note Subscriber in respect of such Note Subscribers holding of the Notes. |
IT IS AGREED as follows:
1. |
DEFINITIONS AND INTERPRETATION |
In this Agreement, unless the context otherwise requires, the provisions in this Clause 1 (Definitions and Interpretation) apply:
1.1 |
Definitions |
Affiliate means, in relation to any person, a Subsidiary of that person or a holding company of that person or any other Subsidiary of that holding company;
Agreed Form means, in relation to any document, the form of that document which has been identified as agreed by or on behalf of each of the Parties on or before the date of this Agreement, with such changes as each Party may expressly agree in writing before the Closing Date;
Anti-Corruption Laws means all laws, rules, and regulations of any jurisdiction applicable to the Issuer or its Subsidiaries from time to time concerning or relating to bribery or corruption;
Anti-Money Laundering Laws means all applicable financial recordkeeping and reporting requirements and laws or regulations related to money laundering or terrorist financing, including the anti-money laundering statutes and the rules and regulations thereunder and any related or similar laws, rules, regulations or guidelines in any jurisdiction to which the Issuer or Subsidiary is subject or in which the proceeds of the Notes will be used;
1
Applicable Laws means all laws, regulations, directives, statutes, subordinate legislation, common law and civil code of any jurisdiction, all judgments, orders, notices, instructions, decisions and awards of any court or competent authority or tribunal and all codes of practice having force of law, statutory guidance and policy notes;
Associated Company means in relation to a person, (a) any of its Affiliates, or any fund, partnership, special purpose vehicle or similar vehicle (the Entity) in respect of which the person or any of its Affiliates is (i) a limited partner or the general partner; or (ii) an investment manager; or (iii) directly or indirectly Controls the Entity or (b) any investor of an Entity of such person and for the purposes of this definition, Control means in relation to any person, where a person has direct or indirect control over more than 50% of the voting share capital of the relevant person and Controls shall have a corresponding meaning;
Authorisation means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration;
Business Combination has the meaning given to it in the proxy statement for special meeting of stockholders of Alkuri Global Acquisition Corp. dated 2 July 2021;
Business Day means, a day (other than Saturday or Sunday) on which commercial banks and foreign exchange markets are open for business in Dublin, London, New York and Jersey;
Certificate has the meaning given to it in Recital (E);
Closing means the completion of the issue and subscription of the Notes pursuant to Clause 4 (Closing) of this Agreement;
Closing Date means the date that is ten (10) Business Days after the occurrence of the Effective Time of the Business Combination and unless agreed otherwise between the Issuer and the Note Subscribers, shall not be later than 31 December 2021;
Conditions has the meaning given to it in Recital (B);
Confidential Information has the meaning given to it in Clause 6.1 (Confidential Information);
Deed Poll has the meaning given to it in Recital (B), in the Agreed Form as at the date of this Agreement;
Default means any event or circumstance which (with the expiry of a grace period, the giving of notice, the making of any determination or any combination of the foregoing) would constitute (after the issue of the Notes) an Event of Default;
Effective Time has the meaning given to it in the proxy statement for special meeting of stockholders of Alkuri Global Acquisition Corp. dated 30 September 2021;
Event of Default has the meaning given to such term in the Conditions;
Existing Shareholders means the shareholders listed in the certified share register excerpt of the Issuer dated as of the date of this Agreement;
Financial Indebtedness has the meaning given to it in the Conditions;
FSMA means the Financial Services and Markets Act 2000;
2
Group has the meaning given to it in the definition of Material Adverse Effect;
Instrument means the Deed Poll together with the Conditions;
Intellectual Property means:
(a) |
any patents, trade marks, service marks, designs, business names, copyrights, database rights, design rights, domain names, moral rights, inventions, confidential information, knowhow and other intellectual property rights and interests (which may on or after the date of this Agreement subsist), whether registered or unregistered; and |
(b) |
the benefit of all applications and rights to use such assets of the Issuer (which may on or after the date of this Agreement subsist); |
Issue Price means 95.50 per cent. of the Principal Amount;
Jersey Registrar has the meaning given to it in paragraph 1.19(d) of Schedule 2;
Joint Venture has the meaning given to it in the Conditions;
Legal Reservations means:
(a) |
the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors; |
(b) |
the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim; |
(c) |
similar principles, rights and defences under the laws of any other relevant jurisdiction; and |
(d) |
any general principles of law which are set out as qualifications to matters of law in any legal opinions delivered pursuant to Clause 3.1 (Conditions Precedent); |
Limitation Acts means the Limitation Act 1980 and the Foreign Limitation Periods Act 1984;
Material Adverse Effect has the meaning given to it in the Conditions;
Notes has the meaning given to it in Recital (A);
Party means a party to this Agreement and Parties shall be construed accordingly;
PIPE Investors means the third party investors participating in a private placement of the Class A ordinary shares of the Issuer, closing of which will occur at the Effective Time of the Business Combination;
Principal Amount means the aggregate principal amount of the Notes denominated in dollars which shall be determined by the Issuer and confirmed in writing to the Note Subscribers on or before the occurrence of the Effective Time of the Business Combination, and which shall not be less than US$100,000,000 and no more than US$200,000,000;
Proceedings has the meaning given to it in Clause 7.2.1;
Prospectus Regulation means Regulation (EU) 2017/1129;
3
Quasi-Security has the meaning given to it in the Conditions;
Register has the meaning given to it in the Conditions;
Representative means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian;
Right means any right, power or remedy in connection with this Agreement;
Sanctioned Country means, at any time, any country or other territory that is the subject of comprehensive country-wide Sanctions, which at the date of this Agreement, are Crimea (as defined and construed in the applicable Sanctions), Cuba, Iran, North Korea, South Sudan and Syria;
Sanctioned Person means, at any time, any individual or entity that is:
(a) |
listed on, owned 50% or more, or otherwise controlled (directly or indirectly) by a person listed on a Sanctions List; |
(b) |
a government of a Sanctioned Country; |
(c) |
an agency or entity directly or indirectly owned 50% or more or controlled by, a government of a Sanctioned Country; or |
(d) |
located, incorporated, organised or ordinarily resident in a Sanctioned Country. |
Sanctions means any trade, financial or economic sanctions or trade embargoes imposed, enacted, administered or enforced by the United States of America (including, without limitation, the Office of Foreign Assets Control of the US Department of the Treasury), the United Nations Security Council, the United Kingdom, the European Union, Jersey, and/or the governments and official institutions or agencies of any of the aforementioned;
Sanctions List means any of the lists of specifically designated nationals or similarly sanctioned individuals or entities (or equivalent) issued by the authorities listed in the definition of Sanctions;
Securities Act has the meaning given to it in Recital (C);
Security has the meaning given to it in the Conditions;
Shares means shares in the capital of the Issuer;
A company is a Subsidiary of another company (its holding company) if that other company, directly or indirectly, through one or more subsidiaries:
(a) |
holds a majority of the voting rights in it; |
(b) |
is a member or shareholder of it and has the right to appoint or remove a majority of its board of directors or equivalent managing body; |
(c) |
is a member or shareholder of it and controls alone, or pursuant to an agreement with other shareholders or members, a majority of the voting rights in it; or |
(d) |
has the right to exercise a dominant influence over it, for example by having the right to give directions with respect to its operating and financial policies, with which directions its directors are obliged to comply; |
4
Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same);
Transaction Documents means:
(a) |
this Agreement; |
(b) |
the Instrument; and |
(c) |
the Warrant Instrument; |
UK means the United Kingdom;
UK Prospectus Regulation means Regulation (EU) 2017/1129 as it forms part of domestic law in the UK by virtue of the European Union (Withdrawal) Act 2018 (as amended by the European Union (Withdrawal Agreement) Act 2020);
Warrantholder Register means a register of persons in whose names a Warrant is registered from time to time;
Warrants mean the warrants to be issued to the Note Subscribers and constituted pursuant to the Warrant Instrument executed by the Issuer on or about the Closing Date; and
Warrant Instrument means the warrant instrument in the Agreed Form to be entered into by the Issuer in favour of the Note Subscribers on the Closing Date.
1.2 |
Singular, plural, gender |
References to one gender include all genders and references to the singular include the plural and vice versa.
1.3 |
References to persons and companies |
References to:
1.3.1. |
a person include any company, corporation, firm, joint venture, partnership, fund or unincorporated association (whether or not having separate legal personality); and |
1.3.2. |
a company include any company, corporation or any body corporate, wherever incorporated. |
1.4 |
Modification etc. of statutes |
References to a statute or statutory provision include:
1.4.1. |
that statute or provision as from time to time modified, re-enacted or consolidated whether before or after the date of this Agreement; |
1.4.2. |
any past statute or statutory provision (as from time to time modified, re-enacted or consolidated) which that statute or provision has directly or indirectly replaced; and |
1.4.3. |
any subordinate legislation made from time to time under that statute or statutory provision. |
1.5 |
Headings |
Headings shall be ignored in interpreting this Agreement.
5
1.6 |
Schedules etc. |
References to this Agreement shall include any Recitals and Schedules to it and references to Clauses and Schedules are to Clauses of, and Schedules to, this Agreement. References to paragraphs are to paragraphs of the Schedules.
1.7 |
Legal terms |
References to any English legal term shall, in respect of any jurisdiction other than England, be construed as references to the term or concept which most nearly corresponds to it in that jurisdiction.
1.8 |
Currency Symbols and Definitions |
$, US$ and dollar denote the single currency of the United States of America.
2. |
ISSUE OF THE NOTES |
2.1 |
Undertaking to issue the Notes |
Subject to, and in accordance with, the provisions of this Agreement, the Issuer undertakes to each Note Subscriber that:
2.1.1. |
the Issuer will issue the Notes to each Note Subscriber on the Closing Date in the principal amount equal to the proportion of the Principal Amount specified opposite each Note Subscribers name in Schedule 1 (The Note Subscribers) (the Subscription Amount), in accordance with this Agreement; and |
2.1.2. |
the Issuer will, on or before the Closing Date, execute the Deed Poll. |
2.2 |
Undertaking to subscribe |
Subject to, and in accordance with, the provisions of this Agreement, each Note Subscriber undertakes to the Issuer to subscribe for its proportion of the principal amount of the Notes at the Issue Price on the Closing Date and to procure payment of the Issue Price in respect of its proportion of the principal amount of the Notes in accordance with Clause 4.2.3 (Payment of Issue Price).
2.3 |
Costs and Expenses |
The Issuer shall, subject to the Closing Date occurring, pay the Note Subscribers the amount of all costs and expenses (including the fees of Shearman & Sterling (London) LLP, Ogier (Jersey) LLP and Duff & Phelps) up to a maximum aggregate amount of US$500,000 inclusive of VAT, which are properly incurred and documented by the Note Subscribers in connection with the negotiation, preparation and execution of this Agreement and any other documents referred to in this Agreement (including any Transaction Document) by the date that is no later than 30 calendar days following the Closing Date.
2.4 |
Stamp Duties |
The Issuer shall pay any and all stamp, registration and other similar taxes and duties (including any interest and penalties thereon or in connection therewith) which are payable upon or in connection with the authorisation, creation, issuance and delivery of the Notes and the execution, delivery and performance of the Transaction Documents and the Issuer shall indemnify the Note Subscribers against any claim, demand, action, liability, damages, cost, loss
6
or expense (including, without limitation, legal fees and any applicable value added tax) which it may incur as a result or arising out of or in relation to any failure to pay or delay in paying any of the same.
2.5 |
Note Subscribers rights and obligations |
2.5.1. |
The obligations of each Note Subscriber under this Agreement are several. Failure by a Note Subscriber to perform its obligations under this Agreement does not affect the obligations of any other Party. No Note Subscriber is responsible for the obligations of any other Note Subscriber under this Agreement. |
2.5.2. |
The rights of each Note Subscriber under or in connection with this Agreement are separate and independent rights and any debt arising under this Agreement to a Note Subscriber from the Issuer is a separate and independent debt in respect of which a Note Subscriber shall be entitled to enforce its rights in accordance with Clause 2.5.3 below. The rights of each Note Subscriber include any debt owing to that Note Subscriber under this Agreement and, for the avoidance of doubt, the outstanding principal amount of any Note held by a Note Subscriber or any other amount owed by the Issuer which relates to that Note or that Note Subscribers role under this Agreement is a debt owing to that Note Subscriber by the Issuer. |
2.5.3. |
A Note Subscriber may separately enforce its rights under or in connection with this Agreement. |
3. |
CONDITIONS |
3.1 |
Conditions Precedent |
Each Note Subscriber will only be obliged to subscribe for the Notes if:
3.1.1. |
prior to or at the Closing, such Note Subscriber has received a copy of the Deed Poll and a copy of the Warrant Instrument, in each case executed by the Issuer, and all the following documents and other evidence in form and substance satisfactory to it: |
(a) |
a copy of the constitutional documents of the Issuer and any consents issued to the Issuer pursuant to the Control of Borrowing (Jersey) Order 1958; |
(b) |
a copy of a resolution of the board of directors of the Issuer (i) approving the terms of, and the transactions contemplated by, the Transaction Documents and resolving that it execute the Transaction Documents, (ii) authorising a specified person or persons to execute the Transaction Documents on its behalf and (iii) authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with the Transaction Documents; |
(c) |
a specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above; |
(d) |
a certificate of an authorised signatory of the Issuer confirming that issuing the Notes would not cause any borrowing, guaranteeing or similar limit binding on it to be exceeded; |
(e) |
a certificate of an authorised signatory of the Issuer certifying that each copy document relating to it specified in this Clause 3.1.1 is correct, complete and in full force and effect as at the Closing Date; |
(f) |
a certified copy of the register of members of the Issuer as at the Closing Date; |
7
(g) |
the warrant certificates in respect of the Warrants issued to the Note Subscribers; |
(h) |
a copy of the Warrantholder Register of the Issuer dated the Closing Date; |
(i) |
a legal opinion of Shearman & Sterling (London) LLP, legal advisers to the Note Subscribers in England, as to enforceability of the Transaction Documents; |
(j) |
a legal opinion of Walkers (Jersey) LLP, legal advisers to the Issuer in Jersey, as to capacity of the Issuer to enter into the Transaction Documents; |
(k) |
evidence that any process agent referred to in Clause 7.3 (Service of process) of this Agreement, Condition 15(c) (Service of process) and Clause 9 of the Deed Poll has accepted its appointment; |
(l) |
evidence that all fees payable on the Closing Date to the Note Subscribers will be paid on or prior to the Closing Date; |
(m) |
any information and evidence reasonably requested by such Note Subscriber in order to comply with Applicable Laws in respect of anti-money laundering requirements and know your customer requirements; |
(n) |
evidence that consent from the PIPE Investors to the issuance of the Notes has been obtained; and |
(o) |
evidence that any other shareholder approvals that may be required by the Issuer in connection with the issuance of the Notes have been obtained. |
3.1.2. |
on or prior to the date that is three (3) Business Days prior to the Closing Date, such Note Subscriber has received all necessary information to enable it to make payment in accordance with Clause 4.2.3 (Payment of Issue Price). |
3.1.3. |
on the Closing Date, no event has occurred which constitutes (after the issue of the Notes) an Event of Default under condition 8 (Events of Default) in the Conditions, or a Default; |
3.1.4. |
on the Closing Date, the representations to be made by the Issuer pursuant to Schedule 2 (Representations) on the Closing Date are true in all material respects or, if the representation is subject to materiality, in all respects; and |
3.1.5. |
the Effective Time of the Business Combination has occurred. |
3.2 |
Non-Satisfaction/Waiver |
3.2.1. |
Each Note Subscriber shall give notice to the Issuer upon receipt by it of a copy of the Deed Poll and a copy of the Warrant Instrument, in each case executed by the Issuer, and all of the documents and other evidence listed in Clause 3.1.1(a) to (o) in form and substance satisfactory to it. |
3.2.2. |
Subject to Clause 3.2.3, the Note Subscribers may at any time waive in whole or in part and conditionally or unconditionally any of the conditions precedent set out in Clause 3.1 (Conditions Precedent) in writing. |
3.2.3. |
The condition precedent set out in Clause 3.1.5 may only be waived by the Note Subscribers with the prior written consent of the Issuer. |
8
4. |
CLOSING |
4.1 |
Date and Place |
Subject to Clause 3 (Conditions), Closing shall take place on the Closing Date.
4.2 |
Closing Events |
The closing of the issue shall take place on the Closing Date, whereupon:
4.2.1. |
Issue and Registration of Notes |
The Issuer shall issue the Notes and cause the Notes to be registered in the Register in the name of each Note Subscriber in respect of such Note Subscribers holding of the Notes in accordance with Condition 3(a).
4.2.2. |
Delivery of Notes and copy of Register to the Note Subscribers |
The Issuer shall deliver: (i) a Certificate to each Note Subscriber as soon as reasonably practicable following the Closing Date; and (ii) a PDF copy of the Register to each Note Subscriber on the Closing Date.
4.2.3. |
Payment of Issue Price |
Each Note Subscriber shall procure the payment of the Issue Price in respect of its proportion of the principal amount of the Notes to the Issuer in US$ for immediate value to such account as the Issuer has designated to such Note Subscriber in writing at least three (3) Business Days prior to the Closing Date.
4.3 |
Breach of Closing Obligations |
4.3.1. |
If, at the Closing: |
(a) |
the Issuer fails to issue the Notes and/or deliver the Certificate to a Note Subscriber in accordance with this Clause 4 (Closing); or |
(b) |
the Issuer fails to issue any or all of the Warrants to the Note Subscribers in accordance with the terms of the Warrant Instrument; or |
(c) |
any of the conditions precedent specified in Clause 3.1 (Conditions Precedent) have not been fulfilled to such Note Subscribers satisfaction, |
such Note Subscriber shall, at its election, be relieved of all further obligations under this Agreement.
4.3.2. |
An election by a Note Subscriber under Clause 4.3.1 above shall not operate as a waiver of any rights such Note Subscriber may have by reason of such failure or such non-fulfilment. |
4.4 |
Use of Proceeds |
4.4.1. |
The Issuer will use the proceeds from the issue of the Notes for general corporate purposes. |
4.4.2. |
The Issuer will not directly or indirectly use the proceeds of the issue of the Notes, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity: |
9
(a) |
to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is a Sanctioned Person; |
(b) |
to fund or facilitate any activities of or business in any Sanctioned Country; |
(c) |
to make any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity to improperly obtain, retain or direct business, or to obtain any improper advantage in any other manner, |
in all cases, in such a way that will result in a violation by any person (including any person participating in the transaction, whether as manager, advisor, investor or otherwise) of Sanctions or Anti-Corruption Laws.
5. |
REPRESENTATIONS |
5.1 |
The Issuer Representations |
The Issuer makes the representations and warranties set out in Schedule 2 (Representations) to each Note Subscriber on the date of this Agreement (other than the representations and warranties set out in paragraphs 1.16(b), 1.16(c) and 1.16(d) of Schedule 2 (Representations), which are only made on the Closing Date) and, by reference to the facts and circumstances then existing, on the Closing Date (other than the representation and warranty set out in paragraph 1.16(a), which is only made on the date of this Agreement) (for the purposes of which references in Schedule 2 (Representations) to the date of this Agreement shall be deemed to be references to the Closing Date).
6. |
CONFIDENTIALITY |
6.1 |
Confidential Information |
Subject to 6.2 (Exclusions), each Party shall keep confidential the following (the Confidential Information):
6.1.1. |
all communications between the Parties relating to the Transaction Documents; |
6.1.2. |
all information in whatever form and other materials supplied and received between the Parties relating to the Transaction Documents which are either marked confidential or are by their nature intended to be for the knowledge of the recipient alone; and |
6.1.3. |
any information relating to: |
(a) |
the Transaction Documents; and |
(b) |
the customers, directors, employees, business, assets or affairs of a Party or its Associated Companies and all information concerning the business transactions and/or financial arrangements of a Party or its Associated Companies, |
and shall not use any Confidential Information for its own business purposes or disclose any Confidential Information to any third party without the consent of the other Parties.
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6.2 |
Exclusions |
Clause 6.1 (Confidential Information) shall not prohibit the disclosure or use of any information if and to the extent:
6.2.1. |
the information is or becomes publicly available (other than by breach of this Agreement); |
6.2.2. |
the disclosure of such information is required in connection with the listing of the Notes; |
6.2.3. |
the relevant Party has given prior approval to the disclosure or use; |
6.2.4. |
the information is information about the Group which the board of directors of the Issuer has confirmed in writing to the Note Subscribers is not confidential; |
6.2.5. |
the information is independently developed by a party after the date of this Agreement; |
6.2.6. |
the disclosure or use is required by Applicable Laws, any governmental or regulatory body or any stock exchange on which the shares of a Party or any of its Associated Companies is listed (including where this is required as part of any actual or potential offering, placing and/or sale of securities of that Party or any of its Associated Companies) or requested by any court of competent jurisdiction or any relevant governmental, judicial, supervisory, regulatory or self-regulatory body including for the avoidance of doubt any disclosure required to be made in any prospectus, investor presentation or any other document in connection with the Business Combination; |
6.2.7. |
the disclosure or use is required for the purpose of any judicial proceedings arising out of this Agreement or any documents to be entered pursuant to it; |
6.2.8. |
the disclosure of information is to any tax authority to the extent such disclosure is reasonably required for the purposes of the tax affairs of a Note Subscriber or any of its Associated Companies; |
6.2.9. |
provided that in the event that any demand or request for disclosure of Confidential Information is made pursuant to Clauses 6.2.6-6.2.8 above, either Party, as the case may be, shall (to the extent reasonably practicable to do so and, further, subject to such notification not being in breach of any applicable confidentiality obligations) promptly notify the other Party of the existence of such request or demand and shall provide the other Party with a reasonable opportunity to seek an appropriate protective order or other remedy, which both Parties will cooperate in seeking to obtain. In the event that such appropriate protective order or other remedy is not obtained, the Party whose Confidential Information is required to be disclosed shall or shall cause the other Party to furnish, or cause to be furnished, only that portion of the Confidential Information that is legally required to be disclosed; |
6.2.10. |
the disclosure by a Note Subscriber or its Associated Companies is to any of its Associated Companies and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives and is in respect of such information as such Note Subscriber or such Associated Companies shall consider reasonably appropriate, provided that any person to whom the information is to be given pursuant to this Clause 6.2.10 is informed in writing of its confidential nature and that some or all of such information may be price-sensitive information provided further that that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to such information; and |
6.2.11. |
the disclosure of information is on a confidential basis to a bona fide third party, professional advisers, auditors, insurers or financiers of such third party wishing to acquire Notes from a Note Subscriber in accordance with the terms of the Transaction Documents to the extent that any such persons need to know the information for the purposes of considering, evaluating, advising on or furthering the potential purchase, |
11
or to service providers and professional advisors who in their ordinary course of carrying out their services for such Note Subscriber or its Associated Companies may come into contact with Confidential Information and who are bound by an obligation of confidentiality to such Note Subscriber or is otherwise subject to professional obligations to maintain the confidentiality of the information. |
6.3 |
Damages not an adequate remedy |
Without prejudice to any other rights or remedies which a Party may have, the Parties acknowledge and agree that damages would not be an adequate remedy for any breach of this Clause 6 (Confidentiality) and the remedies of injunction, specific performance and other equitable relief are appropriate for any threatened or actual breach of any such provision and no proof of special damages shall be necessary for the enforcement of the rights under this Clause 6 (Confidentiality).
6.4 |
Duration of Confidentiality Obligations |
The obligations contained in this Clause 6 (Confidentiality) shall last for so long as a Note Subscriber holds Notes.
7. |
OTHER PROVISIONS |
7.1 |
Governing Law |
This Agreement, including any non-contractual obligations arising out of or in connection with it, are governed by, and shall be construed in accordance with, English law.
7.2 |
Jurisdiction |
7.2.1. |
Subject to Clause 7.2.2, the courts of England and Wales are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and any non-contractual obligations arising out of or in connection with it and accordingly any legal action or proceedings arising out of or in connection with this Agreement or any such obligations (Proceedings) may be brought in such courts and each party irrevocably submits to the exclusive jurisdiction of such courts and waives any objection to Proceedings in such courts whether on the ground of venue or on the ground that the Proceedings have been brought in an inconvenient forum. |
7.2.2. |
Notwithstanding Clause 7.2.1, the Note Subscribers shall not be prevented from taking proceedings relating to a dispute in any other courts with jurisdiction. To the extent allowed by law, the Note Subscribers may take concurrent proceedings in any number of jurisdictions. |
7.3 |
Service of process |
7.3.1. |
Without prejudice to any other mode of service allowed under any relevant law, the Issuer: |
(a) |
irrevocably appoints Babylon Partners Limited with registered number 08493276, the registered office of which is at 1 Knightsbridge Green, London, England, SW1X 7QA as its agent for service of process in relation to any proceedings before the English courts in connection with this Agreement; and |
(b) |
agrees that failure by an agent for service of process to notify the Note Subscribers of the process will not invalidate the proceedings concerned. |
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7.3.2. |
If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Issuer shall immediately (and in any event within five (5) days of such event taking place) appoint another agent on terms acceptable to the Note Subscribers. Failing this, the Note Subscribers may appoint another agent for this purpose. |
7.4 |
Notices |
7.4.1. |
Any notice or other communication in connection with this Agreement shall be: |
(a) |
in writing in English; and |
(b) |
delivered by email. |
7.4.2. |
A notice to the Issuer shall be sent to the following email address, or such other email address as the Issuer may indicate by not less than five (5) Business Days notice in writing to the Note Subscribers from time to time: |
Email: legal-corporate@babylon.com
Attention: General Counsel, Legal Department
7.4.3. |
A notice to a Note Subscriber shall be sent to the email address identified with its name on its signature page to this Agreement, or such other email address as such Note Subscriber may indicate by not less than five (5) Business Days notice to the Issuer in writing from time to time. |
7.4.4. |
A notice shall be effective upon receipt and shall be deemed to have been received: upon generation of a receipt notice by the recipients server, or if such notice is not so generated, upon the delivery to the recipients server. |
7.4.5. |
Any electronic communication which becomes effective, in accordance with Clause 7.4.4 above, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day. |
7.5 |
Release etc. |
Any liability owing from any Party under this Agreement may in whole or in part be released, compounded or compromised or time or indulgence given by a Party in its absolute discretion without in any way prejudicing or affecting its rights against any other Party under the same or a like liability, whether joint and several or otherwise, or the rights of any other Party.
7.6 |
Survival of Rights, Duties and Obligations |
7.6.1. |
Termination of this Agreement for any cause shall not release a Party from any liability which at the time of termination has already accrued to another Party or which thereafter may accrue in respect of any act or omission prior to such termination. |
7.6.2. |
If a Party ceases to be a Party to this Agreement for any cause such Party shall not be released from any liability which at the time of the cessation has already accrued to another Party or which thereafter may accrue in respect of any act or omission prior to such cessation. |
7.7 |
Waiver |
No failure of any Party to exercise, and no delay by it in exercising, any Right shall operate as a waiver of that Right, nor shall any single or partial exercise of any Right preclude any other or further exercise of that Right or the exercise of any other Right. Any express waiver of any breach of this Agreement shall not be deemed to be a waiver of any subsequent breach.
13
7.8 |
Variation |
No amendment to this Agreement shall be effective unless in writing and signed by or on behalf of each of the Parties.
7.9 |
No assignment |
7.9.1. |
Except as otherwise expressly provided in this Agreement, none of the Parties may without the prior written consent of the others, assign, grant any security interest over, hold on trust or otherwise transfer the benefit of the whole or any part of this Agreement. |
7.9.2. |
This Agreement shall be binding on the Parties and their respective successors and assigns. |
7.10 |
Partial Invalidity |
If, at any time, any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
7.11 |
Remedies and Waivers |
No failure to exercise, nor any delay in exercising, on the part of a Note Subscriber, of any Right under this Agreement shall operate as a waiver, nor shall any single or partial exercise of any Right prevent any further or other exercise or the exercise of any other Right. The Rights provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
7.12 |
Counterparts |
This Agreement may be entered into in any number of counterparts, all of which taken together shall constitute one and the same instrument. Any Party may enter into this Agreement by executing any such counterpart.
7.13 |
Third Party Rights |
A person who is not a Party to this Agreement has no right to enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.
7.14 |
Survival |
The provisions of this Agreement shall continue in full force and effect notwithstanding the completion of the arrangements set out herein for the issue of the Notes.
IN WITNESS WHEREOF THIS AGREEMENT has been duly executed on the date stated at the beginning of this Agreement.
14
THE NOTE SUBSCRIBERS |
||||
SIGNED on behalf of |
) | |||
) | ||||
) | ||||
) | ||||
ALBACORE PARTNERS II INVESTMENT |
) | |||
HOLDINGS D DESIGNATED ACTIVITY |
) | |||
COMPANY and acknowledged for and on behalf |
) | |||
of AlbaCore Partners II ICAV |
) | |||
) | ||||
By: ALBACORE CAPITAL LLP as investment |
) | |||
manager for and on behalf of AlbaCore Capital |
) | |||
Limited as AIFM for AlbaCore Partners II |
) | |||
Investment Holdings D Designated Activity |
) | |||
Company and AlbaCore Partners II ICAV |
) |
|
||
) | ||||
) | ||||
) | ||||
) | ||||
|
Notice Details
Address: |
10 EARLSFORT TERRACE, DUBLIN, DUBLIN, D02 T380, IRELAND (copy to: 55 St Jamess Street, London, SW1A 1LA) |
Email: |
Notices@albacorecapital.com (with a copy to Ipeer@albacorecapital.com and legal@albacorecapital.com) |
Attention: |
Directors (copy to: Legal Department) |
[Signature Page to Note Subscription Agreement]
SIGNED on behalf of |
) | |||
) | ||||
) | ||||
) | ||||
ALBACORE PARTNERS III INVESTMENT |
) | |||
HOLDINGS DESIGNATED ACTIVITY COMPANY |
) | |||
and acknowledged for and on behalf of AlbaCore |
) | |||
Capital Group ICAV |
) | |||
) | ||||
By: ALBACORE CAPITAL LLP as investment |
) | |||
manager for and on behalf of AlbaCore Capital |
) | |||
Limited as AIFM for AlbaCore Partners III |
) | |||
Investment Holdings Designated Activity Company |
) | |||
and AlbaCore Capital Group ICAV |
) | |||
) |
|
|||
) | ||||
) | ||||
) | ||||
|
Notice Details
Address: |
10 EARLSFORT TERRACE, DUBLIN, DUBLIN, D02 T380, IRELAND (copy to: 55 St Jamess Street, London, SW1A 1LA) |
Email: |
Notices@albacorecapital.com (with a copy to Ipeer@albacorecapital.com and legal@albacorecapital.com) |
Attention: |
Directors (copy to: Legal Department) |
[Signature Page to Note Subscription Agreement]
SIGNED on behalf of |
) | |||
) | ||||
) | ||||
) | ||||
ALBACORE STRATEGIC INVESTMENTS LP |
) | |||
acting by its Investment Manager, ALBACORE |
) | |||
CAPITAL LLP |
) |
|
||
) | ||||
) | ||||
) | ||||
) | ||||
|
Notice Details
Address: |
Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands (copy to: 55 St Jamess Street, London, SW1A 1LA) |
Email: |
Notices@albacorecapital.com (with a copy to Ipeer@albacorecapital.com and legal@albacorecapital.com) |
Attention: |
Directors (copy to: Legal Department) |
[Signature Page to Note Subscription Agreement]
SCHEDULE 1
THE NOTE SUBSCRIBERS
Name of Note Subscriber | Percentage of Principal Amount | |
AlbaCore Partners II Investment Holdings D |
29 per cent. |
|
Designated Activity Company |
||
AlbaCore Partners III Investment Holdings |
68.5 per cent. |
|
Designated Activity Company |
||
AlbaCore Strategic Investments LP |
2.5 per cent. |
|
Total |
100 per cent. |
19
SCHEDULE 2
REPRESENTATIONS
1.1 |
Status |
(a) |
It and each of its Subsidiaries is: |
(i) |
a limited liability corporation, professional corporation, partnership, or company or a partnership with limited liability; and |
(ii) |
duly incorporated (or, as the case may be, organised) and validly existing under the laws of its jurisdiction of its incorporation (or, as the case may be, organisation). |
(b) |
It and each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted. |
1.2 |
Binding Obligations |
Subject to the Legal Reservations, its obligations under this Agreement are, and upon due execution, its obligations under the Deed Poll and upon issue, the Notes will be, legal, valid, binding and enforceable obligations and the Notes will constitute direct, unconditional, unsubordinated obligations of the Issuer ranking pari passu and rateably, without any preference amongst themselves.
1.3 |
Power and Authority |
It has the power to issue the Notes and enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, each of the Transaction Documents and the Notes and to carry out the transactions contemplated by those documents and the Notes.
1.4 |
Non-Conflict with other Obligations |
Subject to the Legal Reservations, the offer, sale, issue and distribution of the Notes and the entry into and performance by it of, and the transactions contemplated by the Transaction Documents and the Notes do not contravene:
(a) |
any law or regulation applicable to it; |
(b) |
its constitutional documents; or |
(c) |
any agreement or instrument binding upon it or any member of the Group or any of its or their respective assets, to an extent which has or is reasonably likely to have a Material Adverse Effect. |
1.5 |
Consents and Approvals |
(a) |
All consents and approvals of any court, government department or other regulatory, administrative or international body required by the Issuer for the execution and delivery of the Transaction Documents and the Notes and the offer, sale, issue and distribution of the Notes and the performance of the terms of the Transaction Documents and the Notes by the Issuer have been obtained and are unconditional and in full force and effect. |
(b) |
No further action or thing is required to be taken, fulfilled or done (including without limitation the obtaining of any consent or licence or the making of any filing or registration) for the execution and delivery of the Transaction Documents and the Notes and the offer, sale, issue and distribution of the Notes and the performance of the terms of the Transaction Documents and the Notes by the Issuer. |
20
1.6 |
Validity and Admissibility in Evidence |
(a) |
Subject to the Legal Reservations, all Authorisations required: |
(i) |
to enable it lawfully to offer, sell, issue and distribute the Notes and enter into, exercise its rights and comply with its obligations in the Transaction Documents and the Notes; and |
(ii) |
to make the Transaction Documents and the Notes admissible in evidence in Jersey, |
have been obtained or effected and are in full force and effect save where failure to do so would not have or would not reasonably be expected to have a Material Adverse Effect.
(b) |
All Authorisations necessary for the conduct of the business, trade and ordinary activities of members of the Group have been obtained or effected and are in full force and effect save where failure to do so would not have or would not reasonably be expected to have a Material Adverse Effect. |
1.7 |
No Default |
(a) |
No Default is continuing or could reasonably be expected to result from the offer, sale, issue and distribution of the Notes, or the entry into, the performance of, or any transaction contemplated by, any Transaction Document or the Notes. |
(b) |
No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of the foregoing, would constitute) a default or termination event (however described) under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries) assets are subject which has or could reasonably be expected to have a Material Adverse Effect. |
(c) |
No event has occurred which would constitute (after the issue of the Notes) an Event of Default under Condition 8 (Events of Default), or which, with the giving of notice or the lapse of time or other condition, would (after the issue of the Notes) could reasonably be expected to constitute an Event of Default. |
1.8 |
Governing Law and Enforcement |
(a) |
Subject to the Legal Reservations, the choice of governing law of the Transaction Documents and the Notes will be recognised and enforced in Jersey. |
(b) |
Subject to the Legal Reservations, any judgment obtained in relation to a Transaction Document or the Notes in the courts of England will be recognised and enforced in Jersey. |
1.9 |
Insolvency |
No:
(a) |
corporate action, legal proceeding or other procedure or step described in Conditions 8(g) to (i); or |
21
(b) |
creditors process described in Conditions 8(f) to (i), |
has been taken or, to the knowledge of the Issuer, threatened in relation to it or any Subsidiary and none of the circumstances described in Condition 8(f) applies to it or a Subsidiary.
1.10 |
No Misleading Information |
So far as the Issuer is aware, having made due and careful enquiry, all material information (taken as a whole) provided to the Note Subscriber by the Issuer or its Representatives in connection with the Transaction Documents or the Notes on or before the date of this Agreement and not superseded before that date is true and accurate and not misleading in any material respect in the context of the Transaction Documents and the Notes.
1.11 |
Original Financial Statements |
Its audited financial statements for the financial year ended 31 December 2020 give a true and fair view of its financial condition and results of operations during the relevant financial year.
1.12 |
No Proceedings Pending or Threatened |
No litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency which are reasonably likely to be adversely determined and, if adversely determined, would have or would be reasonably likely to have a Material Adverse Effect have (as far as the Issuer is aware having made due and careful enquiry) been started, pending or threatened in writing.
1.13 |
Compliance with laws |
It and each of its Subsidiaries is in compliance with all laws and regulations (applicable to it in its relevant jurisdiction where non-compliance would reasonably be likely to have a Material Adverse Effect.
1.14 |
Taxation |
(a) |
Under the laws of its relevant jurisdiction and the United Kingdom it is not necessary that the Transaction Documents or the Notes be filed, recorded or enrolled with any court or other authority in that jurisdiction, or that any stamp, registration, notarial or similar Tax or fees be paid on or in relation to the Transaction Documents or the Notes or the transactions contemplated by the Transaction Documents or the Notes. |
(b) |
It is not (and none of its Subsidiaries is) materially overdue in the filing of any Tax returns and it is not (and none of its Subsidiaries is) overdue in the payment of any amount in respect of Tax which has or is reasonably likely to have a Material Adverse Effect. |
1.15 |
Legal and Beneficial Ownership |
It and each of its Subsidiaries has good, valid and marketable title to, or valid leases or licences of, or is otherwise entitled to use, all material assets necessary for the conduct of the business as it is presently being conducted, where failure to do so would have or would reasonably be expected to have a Material Adverse Effect.
1.16 |
Shares |
(a) |
As at the date of this Agreement, the Issuer has the number of fully paid and issued Shares as set out in Part 1 of Schedule 3. |
22
(b) |
As at the Closing Date: |
(i) |
the Issuer has the number of fully paid and issued Shares as set out in the certified share register excerpt delivered pursuant to Clause 3.1.1(f); and |
(ii) |
the Issuers authorised share capital is as set out in Part 2 of Schedule 3. |
(c) |
As at immediately prior to the Effective Date of the Business Combination, the fully diluted share capital of the Issuer was 351,499,956 ordinary shares of US$0.0000422573245084686 each in the capital of the Company (comprised of 310,662,380 class A ordinary shares of US$0.0000422573245084686 each in the capital of the Company and 40,837,576 class B ordinary shares of US$0.0000422573245084686 each in the capital of the Company), assuming at such time the exercise in full of any options or warrants and the conversion of any convertible securities (excluding for the avoidance of doubt any Shares or warrants, or rights to subscribe for Shares or warrants, to be issued or granted in connection with the Business Combination or on the Closing Date). |
(d) |
As at the Closing Date, the Issuer has available for issue and authority to allot, free from pre-emption rights, sufficient share capital to enable the rights attaching to the Warrants to be satisfied in full pursuant to the Warrants, and all other rights of subscription and conversion into Shares to be satisfied in full in accordance with their terms. |
(e) |
The Shares to be issued upon exercising the Warrants will be fully paid and will not be subject to calls for further funds. |
(f) |
The Shares to be issued upon exercising the Warrants will rank pari passu with the then outstanding Shares of the same class. |
1.17 |
Intellectual Property |
The Intellectual Property required in order to conduct the business of the Group as is presently being conducted:
(a) |
is beneficially owned by or licensed to members of the Group on arms length terms free from any licences to third parties which are materially prejudicial to the use of that Intellectual Property and will not be adversely affected by the transactions contemplated by the Transaction Documents or the Notes in each case to an extent which would reasonably be expected to have a Material Adverse Effect; and |
(b) |
has not lapsed or been cancelled in any respect which has or could reasonably be expected to have a Material Adverse Effect and all steps have been taken to protect and maintain such Intellectual Property, including, without limitation, paying renewal fees where failure to do so would reasonably be expected to have a Material Adverse Effect. |
1.18 |
Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions Representation |
(a) |
None of the Issuer or any of its Subsidiaries, nor to the Issuers knowledge any of their respective directors or officers: |
(i) |
is a Sanctioned Person; or |
(ii) |
has engaged or is engaged, whether directly or indirectly, in any activity: |
(A) |
which involves any Sanctioned Person and/or Sanctioned Country and which, in all cases, could reasonably be expected to result in any person being in breach of Sanctions or becoming a Sanctioned Person; or |
23
(B) |
in the last three years which has violated applicable Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions; or |
(iii) |
has in the last three years received notice or is otherwise aware of any claim, proceeding or regulatory authority-initiated investigation involving it with respect to a breach of applicable Anti-Corruption Laws, Anti-Money Laundering Laws, or Sanctions. |
(b) |
Nothing in this paragraph 1.18 shall create or establish an obligation or right for any entity to the extent that, by agreeing to it, complying with it, exercising it, having such obligation or right, or otherwise, a member of the Group would be placed in violation of any law applicable to it. |
1.19 |
Private Offering by the Issuer |
(a) |
Neither the Issuer nor anyone acting on its behalf has offered or sold the Notes or any similar securities to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect of the Notes or any similar securities with, any person other than the Note Subscribers, each of which has been offered the Notes privately for investment. |
(b) |
Neither the Issuer nor anyone acting on its behalf has taken, or will take, any action that would require the Issuer to publish a prospectus pursuant to the Prospectus Regulation, the UK Prospectus Regulation or the FSMA in respect of the issuance or sale of the Notes. |
(c) |
The consent of the Jersey Financial Services Commission pursuant to Article 4 of the Control of Borrowing (Jersey) Order 1958 is not required in respect of the issue of the Notes, as the number of persons in whose names the Notes are or are to be registered does not exceed ten (10) (joint holders being counted as one person). |
(d) |
A copy of this Agreement is not required to be delivered to the registrar of companies in Jersey (the Jersey Registrar) in accordance with Article 5 of the Companies (General Provisions) (Jersey) Order 2002, nor is the consent of the Jersey Registrar required in connection with its circulation. |
1.20 |
Absence of Directed Selling Efforts |
Neither it, nor any of its Affiliates, nor any person acting on its or their behalf has engaged, or will engage, in any directed selling efforts (as defined in Regulation S under the Securities Act) with respect to the Notes.
1.21 |
No Registration Required |
(a) |
The Notes issued will not be registered under the Securities Act nor registered or qualified under any state securities or Blue Sky laws of the states of the United States and accordingly, it acknowledges that the Notes may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act; |
(b) |
Neither the Issuer nor any of its Affiliates, nor any person acting on its or their behalf (i) has made or will make offers or sales of any security, or solicited offers to buy, or otherwise negotiated in respect of, any security of a type or in a manner which would be integrated with the sale of the Notes, under circumstances that would require the |
24
registration of the Notes under the Securities Act; or (ii) has engaged, or will engage, in any form of general solicitation or general advertising (within the meaning of Rule 502(c) under the Securities Act) in connection with any offer or sale of the Notes in the United States. |
(c) |
Neither it, nor any of its Affiliates, nor any person acting on any of their behalf has made or will make offers or sales of any securities under circumstances that would require the registration of the offer or sale of any Notes under the Securities Act. |
1.22 |
Regulation S Compliance |
It is a foreign issuer (as such term is defined in Regulation S) which reasonably believes that there is no substantial U.S. market interest (as such term is defined in Regulation S) in its debt securities.
25
SCHEDULE 3
SHARE CAPITAL OF THE ISSUER
Part 1 Issued Shares as at the date of this Agreement
Class of Shares |
Total number of issued Shares as at the date of the Agreement |
|
A ordinary shares with a par value of |
135,136,000 | |
US$0.00001277 each |
||
B ordinary shares with a par value of |
681,811,437 | |
US$0.00001277 each |
||
Series C preferred shares with a par value of |
293,077,489 | |
US$0.00001277 each |
||
G1 ordinary redeemable shares with a par value |
10,150,395 | |
of US$0.00001277 each |
Part 2 Authorised share capital of the Issuer as at the Closing Date
US$409,896.05 divided into:
1. |
6,500,000,000 Class A Ordinary Shares with a par value of US$0.0000422573245084686 each; |
2. |
3,100,000,000 Class B Ordinary Shares with a par value of US$0.0000422573245084686 each; and |
3. |
100,000,000 Deferred Shares with a par value of US$0.0000422573245084686 each. |
26
Exhibit 4.6
EXECUTION VERSION
WARRANT INSTRUMENT
4 NOVEMBER 2021
BABYLON HOLDINGS LIMITED
Allen & Overy LLP
CONTENTS
Clause | Page | |||||
1. |
Interpretation |
1 | ||||
2. |
Constitution, Grant and Form of Warrants and Register |
5 | ||||
3. |
Exercise of Subscription Entitlement |
6 | ||||
4. |
Lapse of Subscription Entitlement |
6 | ||||
5. |
Procedures on an Exercise Event |
6 | ||||
6. |
Issue of Warrant Shares |
8 | ||||
7. |
Cash Redemption |
9 | ||||
8. |
Adjustment of Subscription Entitlement |
10 | ||||
9. |
Adjustment of Warrant Shares |
11 | ||||
10. |
Determination by Auditors or Independent Financial Adviser |
11 | ||||
11. |
Undertakings and Information |
13 | ||||
12. |
Winding Up |
13 | ||||
13. |
Transfer of Warrants |
14 | ||||
14. |
Meetings of Warrantholders |
14 | ||||
15. |
Warrantholders Representative |
14 | ||||
16. |
Tax |
14 | ||||
17. |
Payments |
14 | ||||
18. |
Variation |
15 | ||||
19. |
Severance |
15 | ||||
20. |
Third Party Rights |
15 | ||||
21. |
Notices |
16 | ||||
22. |
Governing Law and Jurisdiction |
16 | ||||
23. |
Process Agent |
16 | ||||
Schedule |
||||||
1. |
Initial Warrantholders |
17 | ||||
2. |
Form of Warrant Certificate |
18 | ||||
3. |
Form of Exercise Notice |
19 | ||||
4. |
The Conditions |
21 | ||||
Signatories |
26 |
THIS INSTRUMENT (this Instrument) is executed as a deed poll on 4 November 2021 by BABYLON HOLDINGS LIMITED, a public limited company incorporated and registered in Jersey with registered number 115471, the registered office of which is at 13 Castle Street, St Helier, Jersey, JE1 1ES (the Company).
WHEREAS:
(A) |
The Company has entered into a note subscription agreement with the Initial Warrantholders on 8 October 2021 in connection with the issue of up to US$200,000,000 unsecured notes due 2026 (the Notes) pursuant to a notes deed poll dated on or around the date of this Instrument (the Notes Deed Poll) and the Warrants constituted by this Instrument. |
(B) |
The Warrants have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act), and may not be offered or sold directly or indirectly within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The issue of the Warrants is being made by the Company in a private placement transaction in a manner not requiring registration under the Securities Act. |
(C) |
The Company, by resolution of its board of directors passed on 7 October 2021, has authorised the issue of the Warrants to subscribe for the Warrant Shares on the terms set out in this Instrument, which shall take effect as a deed poll. |
NOW THIS INSTRUMENT WITNESSES AND IT IS DECLARED as follows:
1. |
INTERPRETATION |
1.1 |
The definitions and rules of interpretation in this Clause apply in this Instrument. |
Adjustment has the meaning given in Clause 8.1.
Affiliate means, in relation to any person, a subsidiary of that person or a holding company of that person or any other subsidiary of that holding company.
AlbaCore means AlbaCore Capital LLP, a limited liability partnership registered in England with number OC412196 and having its registered office at 55 St. Jamess Street, London, SW1A 1LA.
Articles means the memorandum and articles of association of the Company as amended or superseded from time to time.
Associated Company means in relation to a Warrantholder, (a) any of its Affiliates, or any fund, partnership, special purpose vehicle or similar vehicle (the Entity) in respect of which the person or any of its Affiliates is (i) a limited partner or the general partner; or (ii) an investment manager; or (iii) directly or indirectly Controls the Entity or (b) any investor in an Entity or such person, and for the purposes of this definition, Control means in relation to any person, where a person has direct or indirect control over more than 50% of the voting share capital of the relevant person.
Auditors means the auditors of the Company from time to time.
Board means the board of directors of the Company from time to time.
Business Day means a day (other than a Saturday, Sunday or public holiday) on which commercial banks and foreign exchange markets are open for business in Dublin, London, New York and Jersey.
Cash Redemption Election has the meaning given in Clause 7.1.
1
Cash Redemption Payment has the meaning given in Clause 7.1.
Certificate means a certificate in respect of Warrants, substantially in the form set out in Schedule 2.
Change of Control has the meaning given in the Notes Deed Poll.
Change of Control Exercise Event has the meaning given in Clause 3.2.
Class A Ordinary Shares means the class A ordinary shares of US$0.0000422573245084686 each in the capital of the Company from time to time and, if there is a sub-division, consolidation or reclassification of such shares, the shares resulting from that event, having the rights and being subject to the restrictions set out in the Articles.
Closing Price means, in respect of a Class A Ordinary Share on any Trading Day, the closing price on such Trading Day on the Relevant Stock Exchange of a Class A Ordinary Share published by or derived from Bloomberg page HP (or any successor page) (setting Last Price, or any other successor setting and using values not adjusted for any event occurring after such Trading Day; and for the avoidance of doubt, all values will be determined with all adjustment settings on the DPDF Page, or any successor or similar setting, switched off) in respect of the Relevant Stock Exchange and in respect of such Class A Ordinary Shares, as determined by the Company, provided that if on any such Trading Day (for the purpose of this definition, the Affected Day) such price is not available or cannot otherwise be determined as provided above, the Closing Price of a Class A Ordinary Share in respect of such Trading Day shall be the Closing Price, determined as provided above, on the immediately preceding Trading Day on which the same can be so determined, and further provided that if such immediately preceding Trading Day falls prior to the fifth day before the Affected Day, an Independent Financial Adviser shall determine the Closing Price in good faith.
COBO Order means the Control of Borrowing (Jersey) Order 1958.
Conditions means the terms and conditions set out in Schedule 4 (subject to any alterations made in accordance with this Instrument).
Early Redemption Exercise Event has the meaning given in Clause 3.3.
Encumbrances means any security interests, claims, charges, mortgages, liens, options, pre-emption or other third-party rights, or agreements, arrangements or obligations to create any of the foregoing.
Equity Shares means shares in the equity share capital of the Company (or, following an Adjustment, the relevant member of the Group) from time to time.
Equivalent Proportion means a number of Warrants (rounded to the nearest whole Warrant) calculated by multiplying the total number of Warrants held by a Warrantholder by the proportion that the principal amount of the Notes being transferred by that Warrantholder bears to the total principal amount of the Notes held by that Warrantholder immediately prior to such transfer.
Exercise Completion Date has the meaning given in Clause 5.1(c).
Exercise Event means a Mandatory Exercise Event, a Change of Control Exercise Event, an Early Redemption Exercise Event and/or a Final Maturity Exercise Event.
Exercise Notice means a notice in writing in the form, or substantially in the form, set out in Schedule 3.
Exit means any Change of Control or de-listing of the Equity Shares from the New York Stock Exchange.
2
Final Maturity Date has the meaning given in the Notes Deed Poll.
Final Maturity Exercise Event has the meaning given in Clause 3.4.
Group means the Company, any subsidiary undertaking or any holding company of the Company and any other subsidiary undertaking from time to time of a holding company of the Company.
holding company has the meaning given in Clause 1.12.
Initial Warrantholders means the persons whose names and addresses are set out in Schedule 1.
Independent Financial Adviser means an independent financial advisory firm or an independent investment bank, in each case of international repute.
Issuer Redemption Notice has the meaning given in the Notes Deed Poll.
Law means the Companies (Jersey) Law 1991 (as amended).
Mandatory Exercise Event has the meaning given in Clause 3.1.
Notes has the meaning given in Recital (A).
Notes Deed Poll has the meaning given in Recital (A).
Permitted Transferee means a Related Fund of a Warrantholder or an Affiliate of a Warrantholder.
Redemption Date has the meaning given in the Notes Deed Poll.
Redemption Notice has the mean given in the Notes Deed Poll.
Register means a register of Warrantholders referred to in Clause 2.5, and kept and maintained in accordance with paragraph 1 of Schedule 4.
Registered Office means the registered office of the Company from time to time.
Related Fund has the meaning given in the Notes Deed Poll.
Relevant Stock Exchange means in respect of the Class A Ordinary Shares the principal stock exchange or securities market on which the Class A Ordinary Shares are listed, admitted to trading or quoted or dealt in.
Restricted Period means the period commencing on the date of this Instrument and ending on the date that is 18 calendar months from the date of this Instrument.
Subscription Entitlement has the meaning given in Clause 2.4.
Subscription Price means, subject to Clause 8, US$0.0000422573245084686 per Warrant Share.
subsidiary has the meaning given in Clause 1.12.
Tax Deduction means a withholding or deduction for or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature.
Tax Redemption Date has the meaning given in the Notes Deed Poll.
Tax Redemption Notice has the meaning given in the Notes Deed Poll.
3
Trading Day means a day on which the Relevant Stock Exchange is open for business and on which Class A Ordinary Shares may be dealt in (other than a day on which the Relevant Stock Exchange is scheduled to or does close prior to its regular closing time).
Transfer has the meaning given in paragraph 2.1 of Schedule 4.
Value Cap means, subject to Clause 8, US$15.00 per Class A Ordinary Share.
Value Cap Adjustment has the meaning given in subparagraph (ii) of Clause 8.1.
Value Cap Warrant Shares Adjustment means any adjustment to the number of Warrant Shares to which a Warrantholder is entitled per Warrant held by it made in accordance with Clause 9.
Warrant means a private warrant to subscribe for one Warrant Share, on the terms and subject to the conditions of this Instrument.
Warrant Shares means the Class A Ordinary Shares or, following an Adjustment, such other shares in the capital of a member of the Group as may be required pursuant to the terms of an Adjustment, in each case issued to the Warrantholder following exercise of the Warrants in accordance with the terms of this Instrument (and Warrant Share means any of them).
Warrantholder means the person or persons in whose name(s) a Warrant is registered from time to time as evidenced by the Register.
Warrantholder Consent means prior consent in writing from a Warrantholder Majority, which consent may be communicated to the Company by the Warrantholders Representative on behalf of the Warrantholders.
Warrantholder Majority means one or more Warrantholder(s) for the time being holding outstanding Warrants representing not less than 50% in nominal value of the Warrant Shares subject to an outstanding Subscription Entitlement.
Warrantholders Representative means AlbaCore or such other person as the Warrantholder Majority may appoint by giving notice to the Company.
1.2 |
Clause, Schedule and paragraph headings shall not affect the interpretation of this Instrument. |
1.3 |
References to Clauses and Schedules are to the Clauses of and Schedules to this Instrument, and references to paragraphs are to paragraphs of the relevant Schedule. |
1.4 |
The Schedules form part of this Instrument and shall have effect as if set out in full in the body of this Instrument. Any reference to this Instrument includes the Schedules. |
1.5 |
A reference to this Instrument is a reference to this Instrument as varied or novated in accordance with its terms from time to time. |
1.6 |
Unless the context otherwise requires, words in the singular shall include the plural and the plural shall include the singular. |
1.7 |
Unless the context otherwise requires, a reference to one gender shall include a reference to the other genders. |
1.8 |
A reference to writing or written includes e-mail. |
4
1.9 |
Any words following the terms including, include, in particular, for example or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those words. |
1.10 |
A reference to a statute or statutory provision is a reference to it as amended or re-enacted from time to time and shall include all subordinate legislation made from time to time under that statute or statutory provision. |
1.11 |
A reference to US$, $ or US dollars shall be dollars of the United States of America. |
1.12 |
A company is a subsidiary of another company (its holding company) if that other company, directly or indirectly, through one or more subsidiaries: |
(a) |
holds a majority of the voting rights in it; |
(b) |
is a member or shareholder of it and has the right to appoint or remove a majority of its board of directors or equivalent managing body; |
(c) |
is a member or shareholder of it and controls alone, or pursuant to an agreement with other shareholders or members, a majority of the voting rights in it; or |
(d) |
has the right to exercise a dominant influence over it, for example by having the right to give directions with respect to its operating and financial policies, with which directions its directors are obliged to comply. |
2. |
CONSTITUTION, GRANT AND FORM OF WARRANTS AND REGISTER |
2.1 |
The Company hereby constitutes 1,757,499 Warrants to subscribe for the Warrant Shares on the terms and subject to the conditions of this Instrument. |
2.2 |
The Warrants shall be issued in registered form on the date of this Instrument to the Initial Warrantholders in the respective numbers set out opposite their names in Schedule 1. |
2.3 |
The Warrants shall be issued subject to the Articles and otherwise on the terms and subject to the conditions of this Instrument (including the Conditions) which are binding on the Company and each Warrantholder, and all persons claiming through or under them respectively. The Warrants shall not be issued to more than ten Warrantholders at any time without the consent of the Jersey Financial Services Commission under the COBO Order. |
2.4 |
Each Warrant shall confer the right on the Warrantholder holding such Warrant to receive one Warrant Share, subject to any Adjustment or any Value Cap Adjustment in accordance with Clause 8 and to any Value Cap Warrant Shares Adjustment in accordance with Clause 9 (the Subscription Entitlement). Any Warrant Shares issued upon the exercise of the Subscription Entitlement shall be issued at the Subscription Price per Warrant Share and credited as fully paid on the terms and subject to the conditions of this Instrument. Notwithstanding the foregoing, upon an Exercise Event, the Company may at its absolute discretion elect to satisfy the Subscription Entitlement in whole or in part by making a Cash Redemption Payment in accordance with Clause 7. |
2.5 |
The Company shall procure that the Register is maintained, and Certificates are issued, in accordance with the Conditions. |
2.6 |
During the Restricted Period, no Warrantholder shall be permitted to enter into a hedging transaction in respect of its risk or exposure under the Warrants (except for currency management operations which are carried out in the ordinary course of business and for non-speculative purposes only). |
5
3. |
EXERCISE OF SUBSCRIPTION ENTITLEMENT |
3.1 |
The Subscription Entitlement of each Warrantholder shall be deemed to be automatically and irrevocably exercised (in whole and not in part only) at 11 am (New York time) on the first date following which the Closing Price of the Class A Ordinary Shares has equalled or exceeded the Value Cap for any 20 Trading Days within any 30-Trading Day period commencing on the first Trading Day following the expiry of the Restricted Period (such date, a Mandatory Exercise Event). For the avoidance of doubt, no Mandatory Exercise Event may occur during the Restricted Period. |
3.2 |
In the event that a Redemption Notice is given pursuant to the Notes Deed Poll in connection with a Change of Control, the Subscription Entitlement of each Warrantholder shall, unless agreed otherwise between the Company and the Warrantholder Majority, be deemed to be automatically and irrevocably exercised (in whole and not in part only) at 11 am (New York time) on the date of receipt by the Company of such Redemption Notice (a Change of Control Exercise Event). |
3.3 |
In the event that an Issuer Redemption Notice or Tax Redemption Notice is given pursuant to the Notes Deed Poll at any time following the date of this Instrument, the Subscription Entitlement of each Warrantholder shall, unless agreed otherwise between the Company and the Warrantholder Majority, be deemed to be automatically and irrevocably exercised (in whole and not in part only) at 11 am (New York time) on the Redemption Date or Tax Redemption Date (as applicable) (an Early Redemption Exercise Event). |
3.4 |
If and to the extent the Subscription Entitlement has not been exercised prior to the Final Maturity Date, the Subscription Entitlement shall, unless agreed otherwise between the Company and the Warrantholder Majority, be deemed to be automatically and irrevocably exercised (in whole and not in part only) at 11 am (New York time) on the Final Maturity Date (a Final Maturity Exercise Event). |
4. |
LAPSE OF SUBSCRIPTION ENTITLEMENT |
Subject to Clause 12, if an effective resolution is passed or an order is made for the winding up of the Company (otherwise than for the purposes of a reconstruction, consolidation, amalgamation or merger on terms previously sanctioned by a Warrantholder Consent), the Subscription Entitlement and the Warrants to which they relate shall automatically lapse and cease to be exercisable on the date of that resolution or order.
5. |
PROCEDURES ON AN EXERCISE EVENT |
5.1 |
As soon as reasonably practicable following a Mandatory Exercise Event or as soon as reasonably practicable following receipt of a Redemption Notice in respect of a Change of Control, and at least ten Business Days prior to an Early Redemption Exercise Event or a Final Maturity Exercise Event, the Company shall issue an Exercise Notice to the Warrantholders Representative (in accordance with the provisions of Clause 21) which shall specify: |
(a) |
in the event of a Mandatory Exercise Event or a Change of Control Exercise Event, the date and time on which the Subscription Entitlement was deemed to be automatically and irrevocably exercised in accordance with Clause 3.1 or 3.2 as applicable or, in the event of an Early Redemption Exercise Event or a Final Maturity Exercise Event, the date and time on which the Subscription Entitlement shall be deemed to be automatically and irrevocably exercised in accordance with Clause 3.3 or 3.4 as applicable; |
(b) |
whether the Company will satisfy the Subscription Entitlement: |
(i) |
by issuing Warrant Shares; or |
(ii) |
by making a Cash Redemption Payment; or |
6
(iii) |
by a combination of (i) and (ii), provided that: |
(A) |
the proportions in which the Company satisfies the Subscription Entitlement by issuing Warrant Shares and by making a Cash Redemption Payment respectively shall be determined at the absolute discretion of the Company and shall be set out in the Exercise Notice; and |
(B) |
an amount equal to the aggregate Subscription Price for the specified number of Warrant Shares to be issued (rounded up to the nearest US$0.01) shall be deducted from the Cash Redemption Payment in lieu of payment of the Subscription Price to the Company in cash and such deduction shall be set out in the Exercise Notice; |
(c) |
the date on which the Company shall issue the Warrant Shares and/or make the Cash Redemption Payment (as applicable), which shall be: |
(i) |
in respect of a Mandatory Exercise Event, a date within a period of 28 days from the Mandatory Exercise Event; or |
(ii) |
in respect of a Change of Control Exercise Event, as soon as reasonably practicable following the Change of Control Exercise Event; or |
(iii) |
in respect of an Early Redemption Exercise Event, the Redemption Date or Tax Redemption Date (as applicable); or |
(iv) |
in respect of a Final Maturity Exercise Event, the Final Maturity Date, |
provided that in all cases such date shall be a Business Day (and if such date is not a Business Day, the next following day that is a Business Day) (the Exercise Completion Date);
(d) |
where the Company is satisfying the Subscription Entitlement (in whole or in part) by issuing Warrant Shares, the number of Warrant Shares to be issued to each Warrantholder, including (where applicable), reasonable detail of any Value Cap Warrant Shares Adjustment made in accordance with Clause 9; |
(e) |
where the Company is satisfying the Subscription Entitlement in whole or in part by making a Cash Redemption Payment, the amount of the Cash Redemption Payment to be made to each Warrantholder including reasonable detail of the calculation of such Cash Redemption Payment; and |
(f) |
where applicable, reasonable detail of the basis of determination and/or calculation of the Closing Price. |
5.2 |
Promptly (and in any event within 10 Business Days or, if earlier, at least 2 Business Days prior to the Exercise Completion Date) following receipt of the Exercise Notice by the Warrantholders Representative, each Warrantholder shall: |
(a) |
deliver to the Company at its Registered Office any Certificate(s) issued by the Company in respect of the Warrants held by such Warrantholder (or deed of indemnity in favour of the Company on such terms as the Company may reasonably require in the case of any lost, damaged or destroyed Certificates); |
(b) |
where the Company is satisfying the Subscription Entitlement in whole by issuing Warrant Shares pursuant to Clause 5.1(b)(i), pay to the Company (or procure payment to the Company of) the aggregate Subscription Price applicable to the Warrant Shares to be issued to it as specified in the Exercise Notice in US dollars in accordance with Clause 17; and |
7
(c) |
where the Company is satisfying the Subscription Entitlement in whole or in part by making a Cash Redemption Payment, notify the Company of its account details for the making of the Cash Redemption Payment in accordance with Clause 17.3. |
5.3 |
Once delivered, an Exercise Notice shall be irrevocable (except with the consent of the Warrantholder Majority, which consent may be withheld or conditioned in the Warrantholder Majoritys absolute discretion). |
5.4 |
Where the Exercise Notice specifies that the Company is satisfying the Subscription Entitlement (in whole or in part) by issuing Warrant Shares, on the Exercise Completion Date, each Warrantholder shall be deemed to subscribe for such Warrant Shares at the Subscription Price per Warrant Share, which shall be issued to the Warrantholder by the Company free from any Encumbrances (save as set out in the Articles) and credited by the Company as being fully paid. |
6. |
ISSUE OF WARRANT SHARES |
6.1 |
Subject to the Articles, to any applicable legal and regulatory requirements and to compliance by the relevant Warrantholder(s) with the provisions of Clause 5.2, completion of the allotment and issue of Warrant Shares shall take place on the Exercise Completion Date or at such earlier time as the Board may determine (acting in its absolute discretion). |
6.2 |
On the Exercise Completion Date, the Company shall promptly, subject to the Law and to the Articles and the Warrantholders compliance with its applicable obligations in Clause 5.2: |
(a) |
allot and issue to the Warrantholder the number of Warrant Shares in respect of which its Subscription Entitlement has been exercised; |
(b) |
procure the entry of the Warrantholder in the Companys register of members as the holder of the number of Warrant Shares issued to it and deliver a copy thereof to the Warrantholder; and |
(c) |
to the extent that the Warrant Shares are to be held in certificated form, deliver to the Warrantholder a duly executed share certificate for the number of Warrant Shares issued to it that will be so held. |
6.3 |
The Warrant Shares issued under Clause 6.2(a) shall: |
(a) |
be issued fully paid, free from all Encumbrances (save as set out in the Articles); |
(b) |
rank pari passu and form one class with the fully paid shares of the same class then in issue, subject to the Articles; |
(c) |
entitle the registered holder to receive any dividend or other distribution announced or declared on or after the date on which the Warrantholder complies with its applicable obligations in Clause 5.2; and |
(d) |
be registered in a register of members kept outside the United Kingdom by or on behalf of the Company. |
6.4 |
No fractions of a Warrant Share shall be allotted or issued on the exercise of any Subscription Entitlement and no refund will be made to the Warrantholder exercising such Subscription Entitlement with respect to such fractions. If the exercise of any Subscription Entitlement would require a fraction |
8
of a Warrant Share to be allotted (including but not limited to where these arise as a result of a Value Cap Warrant Shares Adjustment in accordance with Clause 9), the aggregate number of Warrant Shares so allotted to a Warrantholder will be rounded down to the nearest whole Warrant Share. |
7. |
CASH REDEMPTION |
7.1 |
Where an Exercise Event has occurred or is proposed to occur, the Company may in its absolute discretion elect in the Exercise Notice relating to that Exercise Event to cancel and redeem some or all of the Subscription Entitlement attaching to the Warrants held by each Warrantholder (a Cash Redemption Election) in consideration for a payment in cash to each Warrantholder equal to either: |
(a) |
where the Closing Price of the Class A Ordinary Shares has equalled or exceeded the Value Cap for any 20 Trading Days within the 30-Trading Day period immediately preceding: |
(i) |
in respect of a Mandatory Exercise Event, the date of the Mandatory Exercise Event; or |
(ii) |
in respect of a Change of Control Exercise Event, the date that the Change of Control is first announced to the market by the Company or the person or persons acquiring control in connection with the Change of Control; or |
(iii) |
in respect of an Early Redemption Exercise Event or a Final Maturity Exercise Event, the date of the Exercise Notice, |
the Value Cap multiplied by the number of Warrants held by the relevant Warrantholder in respect of which the Company has elected to redeem in cash; or
(b) |
where the Closing Price of the Class A Ordinary Shares has not equalled or exceeded the Value Cap for any 20 Trading Days within the 30-Trading Day period immediately preceding: |
(i) |
in respect of a Mandatory Exercise Event, the date of the Mandatory Exercise Event; or |
(ii) |
in respect of a Change of Control Exercise Event, the date that the Change of Control is first announced to the market by the Company or the person or persons acquiring control in connection with the Change of Control; or |
(iii) |
in respect of an Early Redemption Exercise Event or a Final Maturity Exercise Event, the date of the Exercise Notice, |
the Closing Price on the Trading Day immediately prior to the relevant date referred to in subparagraphs (i), (ii) or (iii) above (as applicable) multiplied by the number of Warrants held by the relevant Warrantholder in respect of which the Company has elected to redeem in cash (provided that if the relevant Closing Price is greater than the Value Cap, it shall be deemed to be the Value Cap),
(each such payment, a Cash Redemption Payment).
7.2 |
Where a Cash Redemption Election is made, the Subscription Entitlement (or the relevant proportion of the Subscription Entitlement, as the case may be) of a Warrantholder shall not be treated as cancelled and redeemed unless and until the Cash Redemption Payment has been made in full to the relevant Warrantholder or, if the relevant Warrantholder fails to notify the Company of its account details in accordance with Clause 5.2, to a ring-fenced bank account to be held for the benefit of the relevant Warrantholder. |
9
7.3 |
Upon cancellation and redemption of the Subscription Entitlement (or the relevant proportion of the Subscription Entitlement, as the case may be) in accordance with this Clause 7, all rights and obligations of the Company and the Warrantholders in respect of the Warrants shall immediately terminate and cease to have any force or effect save for any rights which may have accrued prior to the relevant redemption. |
8. |
ADJUSTMENT OF SUBSCRIPTION ENTITLEMENT |
8.1 |
If, while any Subscription Entitlement remains exercisable: |
(a) |
there is a subdivision, consolidation, reclassification or change in nominal value (excluding a change to no par value where the number of shares in issue is otherwise unchanged) of the Class A Ordinary Shares; |
(b) |
there is a reduction of capital (of whatever nature, but excluding a cancellation of capital that is lost or not represented by available assets), or any other reduction in the number of Equity Shares in issue from time to time; |
(c) |
there is an issue of Equity Shares by way of dividend or distribution; |
(d) |
there is an issue of Equity Shares by way of capitalisation of profits or reserves (including share premium account and any capital redemption reserve); or |
(e) |
there is a consolidation, amalgamation or merger of the Company with or into another entity (other than a consolidation, amalgamation or merger following which the Company is the surviving entity and which does not result in any reclassification of, or change in, the Class A Ordinary Shares) through a share-for-share exchange or otherwise (including, for the avoidance of doubt, a merger or amalgamation where the Company is not the surviving entity), |
then:
(i) |
the Company shall adjust the Subscription Entitlement and/or the Subscription Price conditional on any such event occurring, but with effect from the date of the relevant event or, if earlier, the record date for the event (an Adjustment), in each case, so that after such Adjustment, the total number of Warrant Shares for which the outstanding Subscription Entitlement would then be capable of being exercised carry as nearly as possible (and in any event not less than) the same proportion of the voting rights and the same entitlement (expressed as a proportion of the total entitlement conferred by all the Equity Shares) to participate in the profits and assets of the Company as if there had been no such event giving rise to the Adjustment and the Company shall procure the update of the Register accordingly; and |
(ii) |
upon any Adjustment, the Value Cap shall be deemed to be adjusted as follows and construed accordingly (a Value Cap Adjustment): |
A = (B divided by C) multiplied by D
where:
A = the adjusted Value Cap;
B = the number of Warrant Shares for which the outstanding Subscription Entitlement would be capable of being exercised immediately prior to the relevant Adjustment;
10
C = the number of Warrant Shares for which the outstanding Subscription Entitlement would be capable of being exercised immediately following the relevant Adjustment as determined in accordance with subparagraph (i) above; and
D = the Value Cap immediately prior to the relevant Adjustment.
8.2 |
The Company shall give the Warrantholders Representative written notice of any event described in Clause 8.1, together with details of the relevant Adjustment and Value Cap Adjustment and reasonable detail of any supporting calculations, at the time of, or as soon as reasonably possible after the occurrence of such event. |
9. |
ADJUSTMENT OF WARRANT SHARES |
9.1 |
If in an Exercise Notice the Company elects to satisfy a Warrantholders Subscription Entitlement in whole or in part by way of issuing Warrant Share and the Closing Price on the Trading Day immediately prior to the relevant date as follows: |
(a) |
in respect of a Mandatory Exercise Event, the date of the Mandatory Exercise Event; or |
(b) |
in respect of a Change of Control Exercise Event, the date that the Change of Control is first announced to the market by the Company or the person or persons acquiring control in connection with the Change of Control; or |
(c) |
in respect of an Early Redemption Exercise Event or a Final Maturity Exercise Event, the date of the Exercise Notice, |
is equal to or exceeds the Value Cap, the number of Warrant Shares to which a Warrantholder shall be entitled per Warrant (notwithstanding and subject always to the Companys right to elect in an Exercise Notice to redeem the Subscription Entitlement by making a Cash Redemption Payment in accordance with Clause 7) shall be adjusted downwards as follows:
A = B divided by C
where:
A = the adjusted number of Warrant Shares to which a Warrantholder is entitled per Warrant;
B = the Value Cap; and
C = the Closing Price.
9.2 |
Where applicable the Company shall notify the Warrantholders of any Value Cap Warrant Shares Adjustment in the relevant Exercise Notice and shall include reasonable detail of the calculation of such Value Cap Warrant Shares Adjustment. |
10. |
DETERMINATION BY AUDITORS OR INDEPENDENT FINANCIAL ADVISER |
10.1 |
If the Warrantholders Representative notifies the Company in writing: |
(a) |
within ten Business Days of receipt of a notice given under Clause 8.2 that the Warrantholder Majority disagrees with any Adjustment and/or any Value Cap Adjustment; or |
(b) |
within five Business Days of receipt of an Exercise Notice in which the Company has notified the Warrantholders of a Value Cap Warrant Shares Adjustment that the Warrantholder Majority disagrees with such Value Cap Warrant Shares Adjustment, the Company shall refer the matter to the Auditors for determination. |
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10.2 |
In respect of any disagreement referred to the Auditors for determination pursuant to Clause 10.1: |
(a) |
the Company and the Warrantholder(s) will each co-operate with the Auditors in resolving the disagreement as soon as reasonably possible and for that purpose will, subject to any restrictions imposed by applicable law, any regulatory authority or any obligations of confidentiality, provide to them all such information and documents as they may reasonably require; |
(b) |
the Auditors shall have the right to seek such professional assistance and advice as they may require; |
(c) |
the Auditors fees and any professional costs incurred by them shall be borne: |
(i) |
where the Auditors determination in respect of the relevant matter that is the subject of the disagreement is more than 5 per cent. less or more than 5 per cent. greater than the original number or calculation proposed by the Company, by the Company; or |
(ii) |
in all other cases, (A) 50 per cent. by the Company; and (B) 50 per cent. proportionately among the Warrantholders that disagreed with the matter (as the Warrantholders Representative may determine in its absolute discretion); and |
(d) |
the Auditors shall act as experts and not as arbitrators and their decision shall (in the absence of manifest error) be final and binding on the Company and all Warrantholders. |
10.3 |
If the Warrantholders Representative notifies the Company in writing within five Business Days of receipt of an Exercise Notice that the Warrantholder Majority disagrees with the Closing Price specified in such Exercise Notice (where applicable), the Company shall refer the matter to an Independent Financial Adviser for determination, provided that if the disputed Closing Price was first determined by an Independent Financial Adviser on behalf of the Company prior to issuing the Exercise Notice, the Company shall refer the matter to a second Independent Financial Adviser for determination. |
10.4 |
In respect of any disagreement referred to an Independent Financial Adviser for determination pursuant to Clause 10.3: |
(a) |
the Company and the Warrantholder(s) will each co-operate with the Independent Financial Adviser in resolving the disagreement as soon as reasonably possible and for that purpose will, subject to any restrictions imposed by applicable law, any regulatory authority or any obligations of confidentiality, provide to them all such information and documents as they may reasonably require; |
(b) |
the Independent Financial Adviser shall have the right to seek such professional assistance and advice as it may require; |
(c) |
the Independent Financial Advisers fees and any professional costs incurred by them shall be borne: |
(i) |
where the Independent Financial Advisers determination in respect of the relevant matter that is the subject of the disagreement is more than 5 per cent. less or more than 5 per cent. greater than the original number or calculation proposed by the Company, by the Company; or |
12
(ii) |
in all other cases, (A) 50 per cent. by the Company; and (B) 50 per cent. proportionately among the Warrantholders that disagreed with the matter (as the Warrantholders Representative may determine in its absolute discretion); and |
(d) |
the Independent Financial Adviser shall act as an expert and not as an arbitrator and its decision shall (in the absence of manifest error) be final and binding on the Company and all Warrantholders. |
11. |
UNDERTAKINGS AND INFORMATION |
11.1 |
For so long as any Subscription Entitlement remains exercisable, the Company shall: |
(a) |
procure that the Board shall at all times have authority pursuant to the Articles and any applicable legal and regulatory requirements to grant Warrants and to issue Warrant Shares on exercise of any Subscription Entitlement in accordance with the terms of this Instrument and free of any Encumbrances; |
(b) |
not permit any of the events described in Clause 8.1(a) to Clause 8.1(e) to the extent that its effect would be that, following any relevant Adjustment, on the exercise of any Subscription Entitlement the Company would be required to allot Warrant Shares at a discount to nominal value; and |
(c) |
subject to applicable law, regulation and the rules of any applicable stock exchange, notify each Warrantholder of any anticipated Exit, or commencement of proceedings to effect a winding up in the circumstances set out in Clause 12.1, as soon as reasonably practicable after the Board becomes aware of such Exit or winding up (and, in any event, no later than five Business Days prior to completion of such Exit or passing of the resolution referred to in Clause 12.1(b), as the case may be). |
11.2 |
Each Warrantholder (or agent appointed to act on its behalf) shall have the right to attend and speak (but not, by virtue of its Warrants alone, vote) at all meetings of the holders of the Class A Ordinary Shares at which any business is to be moved which will, or may reasonably be expected to, affect the value of the Warrants or the Warrant Shares or the rights attaching to any of them under this Instrument. |
12. |
WINDING UP |
12.1 |
This Clause 12 applies if: |
(a) |
any Subscription Entitlement remains unexercised; and |
(b) |
an effective resolution for the winding up of the Company is passed for the summary (solvent) winding up of the Company under Part 21, Chapter 2 of the Law. |
12.2 |
In the circumstances set out in Clause 12.1, each Warrantholder with unexercised Subscription Entitlement shall, for the purposes of ascertaining its rights in the winding up, be treated as if it had, immediately before the passing of the resolution, fully exercised its outstanding Subscription Entitlement (and, notwithstanding the time periods specified in Clause 6.1, been issued with Warrant Shares with immediate effect) and shall be entitled to receive out of the assets available in the liquidation pari passu with the holders of the Class A Ordinary Shares (or other Warrant Shares as may be required following an Adjustment) such sum as it would have received had it been the holder of all such Class A Ordinary Shares (or such other Warrant Shares as may be required following an Adjustment) to which it would have been entitled by virtue of that exercise after deducting a sum equal to the sum which would have been payable for Warrant Shares, but nothing in this Clause 12 shall require a Warrantholder to make any payment to the Company or any other person. |
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13. |
TRANSFER OF WARRANTS |
The provisions of paragraph 2 of Schedule 4 shall govern the transfer of Warrants.
14. |
MEETINGS OF WARRANTHOLDERS |
All resolutions and consents of the Warrantholders shall be adopted by way of Warrantholder Consent. Nevertheless, if a meeting of the Warrantholders is to be held, all the provisions of the Articles and any applicable statutory requirements relating to general meetings shall apply to that meeting as if:
(a) |
the Warrants constituted shares in the capital of the Company; and |
(b) |
each Warrantholder was a member of the Company, |
provided that the quorum for such a meeting shall be such number of Warrantholders present in person, by proxy or by authorised representative holding 50% in nominal amount of the Warrant Shares subject to outstanding Warrants on the date of the meeting.
15. |
WARRANTHOLDERS REPRESENTATIVE |
15.1 |
The Warrantholders Representative shall be entitled to carry out the functions conferred on it by this agreement. |
15.2 |
The Warrantholders Representative shall not be liable to any Warrantholder for any act or omission in connection with the performance by the Warrantholders Representative (in that capacity) of its duties, functions and/or role pursuant to this Instrument, except in the case of its fraud or dishonesty. The Warrantholders Representative may act upon any instrument or written communication believed by the Warrantholders Representative to be genuine and to be signed and presented by the proper person(s). Each of the Warrantholders hereby undertakes to indemnify and keep indemnified and hold harmless the Warrantholders Representative from all losses, costs, damages, expenses (including professional fees) and any other liabilities that may be incurred by the Warrantholders Representative (in that capacity) as a result of performance of its duties, functions and role as the Warrantholders Representative under this agreement provided that the Warrantholders Representative shall not be entitled to indemnification for and in respect of any matter where its actions or inactions are fraudulent or dishonest. |
15.3 |
Any consent given in accordance with the provisions of this Instrument by the Warrantholders Representative in connection with this Instrument shall bind all the Warrantholders. |
16. |
TAX |
All payments by the Company under this Instrument shall be made free and clear of any Tax Deduction, unless such withholding or deduction is required by law. In the event of a Tax Deduction being made by the Company in respect of a payment made by it, the Company shall pay such additional amounts as will result in the receipt by the Warrantholders, after any withholding or deduction for or on account of such taxes, duties, assessments or charges, of such amounts as would have been received by them if no such Tax Deduction had been required.
17. |
PAYMENTS |
17.1 |
Unless otherwise expressly stated (or as otherwise agreed in the case of a given payment), each payment to be made to the Company and to a Warrantholder under this Instrument or in respect of any Warrant shall be made in US dollars by transfer of the relevant amount into the relevant account on the date (and, if applicable, at or before the time) the payment is due for value on that date and in immediately available funds. |
14
17.2 |
The relevant account for a given payment to the Company is: |
bank: | Barclays Bank PLC | |||
sort code: | 20-36-47 | |||
account number: | 53060166 | |||
account name: | BHL Fundraising USD | |||
SWIFT: | BARCGB22 | |||
IBAN: | GB34BARC20364753060166 |
or such other US dollar account in the name of the Company as shall be: (i) notified to the Warrantholders Representative not less than three Business Days before the date that payment is due for the purpose of that payment; and (ii) approved by the Warrantholders Representative following the Companys compliance with anti-money laundering requirements to the satisfaction of the Warrantholders.
17.3 |
The relevant account for a given payment to a Warrantholder is the US dollar account specified by the Warrantholder (or the Warrantholders Representative on its behalf), not less than three Business Days before the date that payment is due, by giving notice to the Company in accordance with Clause 21 for the purposes of that payment. In the absence of any such notice the relevant payment shall be made to a ring-fenced bank account and held for the benefit of the relevant Warrantholder. |
18. |
VARIATION |
18.1 |
Subject to Clause 8 and Clause 18.2, no variation or abrogation of the terms of this Instrument or of all or any of the rights for the time being attached to the Warrants shall be effective (whether or not the Company is being wound up) without Warrantholder Consent. Any such variation or abrogation shall be effected by way of deed poll executed by the Company and expressed to be supplemental to this Instrument. |
18.2 |
Modifications to this Instrument which are of a minor or administrative nature only, and have no impact on the rights and obligations under this Instrument, may be effected by way of deed poll executed by the Company and expressed to be supplemental to this Instrument. |
18.3 |
The Company shall, within five Business Days of making any variation pursuant to this Clause 18, send to each Warrantholder (or, in the case of joint holders, to the Warrantholder named first in the Register) a copy of the deed poll (or other document) effecting the variation. |
19. |
SEVERANCE |
If any provision or part-provision of this Instrument is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted. Any modification to or deletion of a provision or part-provision under this Clause 19 shall not affect the validity and enforceability of the rest of this Instrument.
20. |
THIRD PARTY RIGHTS |
20.1 |
Except as expressly provided in Clause 20.2, a person who is not a party to this Instrument shall not have any rights under the Contracts (Rights of Third Parties) Act 1999 or otherwise to enforce any term of this Instrument. |
20.2 |
The provisions of this Instrument are intended to confer rights and benefits on the Warrantholders and the Warrantholders Representative and such rights and benefits shall be enforceable by each of them to the fullest extent permitted by law. |
15
20.3 |
The Company undertakes that it will duly observe and perform the obligations on its part contained in this Instrument and the Warrants shall be issued and held subject to and with the benefit of the provisions of this Instrument. |
21. |
NOTICES |
Any notice to be given to or by any Warrantholder(s) for the purposes of this Instrument shall be given in accordance with the provisions of paragraph 4 of Schedule 4.
22. |
GOVERNING LAW AND JURISDICTION |
22.1 |
This Instrument and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with English law. |
22.2 |
Each party irrevocably agrees that the English courts shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Instrument or its subject matter or formation (including non-contractual disputes or claims). |
23. |
PROCESS AGENT |
23.1 |
Without prejudice to any other mode of service allowed under any relevant law, the Company: |
(a) |
irrevocably appoints Babylon Partners Limited with registered number 08493276, the registered office of which is at 1 Knightsbridge Green, London, England, SW1X 7QA as its agent for service of process in relation to any proceedings before the English courts in connection with this Instrument; and |
(b) |
agrees that failure by an agent for service of process to notify the Company of the process will not invalidate the proceedings concerned. |
23.2 |
If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Company shall immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Warrantholders Representative. Failing this, the Warrantholders Representative may appoint another agent for this purpose. |
THIS DEED has been entered into on the date stated at the beginning of it.
16
SCHEDULE 1
INITIAL WARRANTHOLDERS
Name |
Address |
E-mail Address |
Number of Warrants | |||
AlbaCore Partners II Investment Holdings D Designated Activity Company | 10 Earlsfort Terrace, Dublin, Dublin, D02 T380, Ireland (copy to: 55 St Jamess Street, London, SW1A 1LA) | Notices@albacorecapital.com (with a copy to Ipeer@albacorecapital.com and legal@albacorecapital.com) | 509,675 | |||
AlbaCore Partners III Investment Holdings Designated Activity Company | 10 Earlsfort Terrace, Dublin, Dublin, D02 T380, Ireland (copy to: 55 St Jamess Street, London, SW1A 1LA) | Notices@albacorecapital.com (with a copy to Ipeer@albacorecapital.com and legal@albacorecapital.com) | 1,203,887 | |||
AlbaCore Strategic Investments LP | Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands (copy to: 55 St Jamess Street, London, SW1A 1LA) | Notices@albacorecapital.com (with a copy to Ipeer@albacorecapital.com and legal@albacorecapital.com) | 43,937 |
17
SCHEDULE 2
FORM OF WARRANT CERTIFICATE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
WARRANT CERTIFICATE NO. [__]
BABYLON HOLDINGS LIMITED
a public limited company incorporated and registered in Jersey
registered number: 115471
registered office: [13 Castle Street, St Helier, Jersey, JE1 1ES]
(the Company)
Date of issue: |
[●] |
|
Warrantholder name: |
[●] |
|
Registered address: |
[●] |
|
Principal place of business: |
[●] |
THIS IS TO CERTIFY that the person named above is the registered holder of [●] Warrants, which entitle the Warrantholder to subscribe for Warrant Shares at the Subscription Price on the terms and subject to the conditions set out in the warrant instrument issued by the Company on [●] 2021 (the Instrument), subject to the Articles.
This certificate is issued with the benefit of, and subject to, the terms of the Instrument, a copy of which is available on request from the Company. The Warrants represented by this certificate and the Subscription Entitlement relating to such Warrants are not transferable except in accordance with the Instrument. Terms defined in the Instrument have the same meaning when used in this certificate.
EXECUTED as a DEED and DELIVERED by |
) | |||||||||||||
BABYLON HOLDINGS LIMITED |
) | |||||||||||||
acting by a duly authorised director |
) | |||||||||||||
in the presence of: |
) |
|
Witness Signature: |
|
|||||||
Witness Name: |
|
|||||||
Witness Address: |
|
|||||||
|
||||||||
|
||||||||
Witness Occupation: |
|
18
SCHEDULE 3
FORM OF EXERCISE NOTICE
The Directors Babylon Holdings Limited 13 Castle Street St Helier Jersey JE1 1ES |
To:
Warrantholders Representative
By e-mail to: [●]
[DATE]
We refer to the warrant instrument dated [●] 2021 (the Instrument) issued by Babylon Holdings Limited. Terms defined in the Instrument have the same meanings when used in this Exercise Notice.
We hereby give notice of [details of Exercise Event], which constitutes a[n] [Mandatory Exercise Event][Early Redemption Exercise Event][Change of Control Exercise Event][Final Maturity Exercise Event] for the purposes of the Instrument.
For the purposes of clause 5.1 of the Instrument:
1. |
the Subscription Entitlement [was][shall be] deemed to be automatically and irrevocably exercised on [date] [at [time]]; |
2. |
the Company will satisfy the aggregate Subscription Entitlement by [issuing an aggregate number of [●] Warrant Shares [and]][making an aggregate Cash Redemption Payment of [●] [(net of deduction of an aggregate Subscription Price of US$[●] in respect of the number of Warrant Shares to be issued (rounded up to the nearest US$0.01)]]; |
3. |
the [Warrant Shares [and]][Cash Redemption Payment shall be allocated among the Warrantholders as set out in the Schedule to this Exercise Notice; |
4. |
the Exercise Completion Date shall be [date]; |
5. |
[the number of Warrant Shares to be issued to the Warrantholders on the Exercise Completion Date as set out in paragraph 2 and the Schedule to this Exercise Notice has been subject to a Value Cap Warrant Shares Adjustment calculated as follows: [reasonable detail to be included];] |
6. |
[the Cash Redemption Payment to be made to the Warrantholders on the Exercise Completion Date as set out in paragraph 2 and the Schedule to this Exercise Notice has been calculated as follows: [reasonable detail to be included]; [and] |
7. |
[the [Closing Price] for the purposes of the calculations referred to in paragraph[s] [●] above [has][have] been determined as follows [reasonable detail to be included]. |
We hereby request that each Warrantholder complies with its obligations pursuant to Clause 5.2 of the Instrument within the applicable time period specified therein.
19
Signed by [NAME OF DIRECTOR] for and on behalf of Babylon Holdings Limited |
[SIGNATURE OF DIRECTOR] |
|||||
Director |
SCHEDULE TO EXERCISE NOTICE
[Details of allocation of Warrant Shares and/or Cash Redemption Payment among Warrantholders to be included]
20
SCHEDULE 4
THE CONDITIONS
1. |
THE REGISTER AND CERTIFICATES |
1.1 |
The Register shall be kept and maintained at the Registered Office or at such other place (at all times outside the United Kingdom) as the Company may from time to time determine and notify to the Warrantholders and there shall promptly be entered in the Register: |
(a) |
the names and addresses of the Warrantholders, supplied in accordance with paragraph 4 of this Schedule 4; |
(b) |
the number of Warrants held by each Warrantholder; |
(c) |
the date on which each person was registered as a Warrantholder, in respect of each tranche of Warrants held by it; |
(d) |
the date on which the Subscription Entitlement was exercised and the number of Warrants for which such Subscription Entitlement was exercised; |
(e) |
the date on which any person ceased to be a Warrantholder; |
(f) |
updates arising out of Adjustments in accordance with Clause 8.1; and |
(g) |
all transfers of the Warrants. |
1.2 |
The Company shall promptly amend the Register after receiving notice of a change in a Warrantholders details for service pursuant to paragraph 4.4 of this Schedule 4. |
1.3 |
The Warrantholders or any of them, or any person authorised by a Warrantholder, shall be at liberty at all reasonable times during office hours to inspect the Register and to take copies of or extracts from it or any part of it. |
1.4 |
The Company shall be entitled to treat each person named in the Register as a Warrantholder as the absolute owner of a Warrant and, accordingly, shall not, except as ordered by a court of competent jurisdiction or as required by law, be bound to recognise any equitable or other claim to or interest in a Warrant on the part of any other person, whether or not it shall have express or other notice of such a claim. |
1.5 |
Every Warrantholder shall be recognised by the Company as entitled to its Warrants free from any equity, set-off or cross-claim against the original or an intermediate holder of such Warrants. |
1.6 |
Each Warrantholder shall be issued with a Certificate (together with a copy of this Instrument and, at the Warrantholders request, a copy of any other document referred to in this Instrument) promptly and, in any event, within ten Business Days, following: |
(a) |
the date on which it is registered as a Warrantholder; and |
(b) |
any Adjustment (except where such Adjustment is referred to the Auditors for determination in accordance with Clause 10, in which case, following completion of the Auditors determination). |
1.7 |
If a Certificate is mutilated, defaced, lost, stolen or destroyed, it will be replaced by the Company upon payment by the claimant of such reasonable costs as may be incurred in connection with such replacement and on such terms as to evidence and indemnity as the Company may reasonably require. Mutilated or defaced Certificates must be surrendered before replacements will be issued. |
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2. |
TRANSFER OF WARRANTS |
2.1 |
No Warrantholder shall assign, transfer, mortgage, charge, declare a trust over, or deal in any other manner with its Warrants or any of its rights in respect of the Warrants (each such transaction, a Transfer) without the express prior written approval of the Board (such approval to be given in the absolute discretion of the Board), other than: |
(a) |
to a Permitted Transferee of the Warrantholder; or |
(b) |
where a Transfer of Notes is permitted pursuant to the terms of the Notes Deed Poll, |
in each case, provided that a Transfer of Notes is made simultaneously to the same person and the number of Warrants the subject of the Transfer is equal to the Equivalent Proportion.
2.2 |
Subject to paragraph 2.1, Warrants may be transferred by means of (and only by means of) an instrument of transfer in any usual form or any other form approved by the Board acting reasonably. |
2.3 |
An instrument of transfer shall be made under hand and executed by or on behalf of the transferor but need not be signed by the transferee. The transferor shall be deemed to remain the holder of the Warrants until the name of the transferee is entered in the Register for the Warrants being transferred. |
2.4 |
The Board may refuse to register a transfer unless such instrument is deposited at the Registered Office together with any Certificate(s) issued by the Company in respect of such Warrants (or deed of indemnity in favour of the Company on such terms as the Company may reasonably require in the case of any lost, damaged or destroyed Certificates) and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer. |
2.5 |
The registration of a transfer shall be conclusive evidence of approval by the Board of the transfer. |
2.6 |
No fee shall be charged for the registration of a transfer of a Warrant, or for the registration of any other documents which, in the opinion of the Board, require registration. |
2.7 |
Any transfer of a Warrant purported to be made otherwise than in accordance with this paragraph 2 shall be void and have no effect. |
3. |
CONFIDENTIALITY |
3.1 |
A Warrantholder shall not at any time disclose to any person the existence of or contents of this Instrument, or any confidential information concerning the business, affairs, customers, clients or suppliers of the Group, except as permitted by paragraph 3.2. |
3.2 |
A Warrantholder may disclose information, where such disclosure would otherwise be prohibited under paragraph 3.1 if and to the extent: |
(a) |
the information is or becomes publicly available (other than by breach of this Instrument by the Warrantholder); |
(b) |
the Company has given prior approval to the disclosure or use; |
(c) |
the information is information about the Group which the board of directors of the Company has confirmed in writing to a Warrantholder is not confidential; |
22
(d) |
the information is independently developed by a Warrantholder after the date of this Instrument; |
(e) |
the disclosure or use is required by legal or regulatory requirements, any governmental or regulatory body or any stock exchange on which the shares of a Warrantholder or any of its Associated Companies is listed (including where this is required as part of any actual or potential offering, placing and/or sale of securities of that Warrantholder or any of its Associated Companies) or requested by any court of competent jurisdiction or any relevant governmental, judicial, supervisory, regulatory or self-regulatory body; |
(f) |
the disclosure or use is required for the purpose of any judicial proceedings arising out of this Instrument or any documents to be entered pursuant to it; |
(g) |
the disclosure of information is to any tax authority to the extent such disclosure is reasonably required for the purposes of the tax affairs of a Warrantholder or any of its Associated Companies; |
(h) |
provided that in the event that any demand or request for disclosure of such information is made pursuant to paragraph 3.2(e) to (g) above, such Warrantholder shall (to the extent reasonably practicable to do so and, further, subject to such notification not being in breach of any applicable confidentiality obligations) promptly notify the Company of the existence of such request or demand and shall provide the Company with a reasonable opportunity to seek an appropriate protective order or other remedy, which both the Warrantholders and Company will cooperate in seeking to obtain. In the event that such appropriate protective order or other remedy is not obtained, the Warrantholder shall furnish, or cause to be furnished, only that portion of the confidential information that is legally required to be disclosed; |
(i) |
the disclosure by a Warrantholder or its Associated Companies is to any of its Associated Companies, Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and representatives and is in respect of such information as such Warrantholder or such Associated Companies shall consider reasonably appropriate, provided that any person to whom the information is to be given pursuant to this paragraph 3.2(i) is informed in writing of its confidential nature and that some or all of such information may be price-sensitive information provided further that that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to such information; |
(j) |
the disclosure of information is on a confidential basis to any bona fide proposed transferee of Warrants (including any Permitted Transferee, third party, professional advisers, auditors, insurers or financiers of such party) wishing to acquire Warrants from a Warrantholder in accordance with the terms of this Instrument to the extent that any such persons need to know the information for the purposes of considering, evaluating, advising on or furthering the potential purchase, or to service providers and professional advisors who in their ordinary course of carrying out their services for such Warrantholder or its Associated Companies may come into contact with confidential information and who are bound by an obligation of confidentiality to such Warrantholder or is otherwise subject to professional obligations to maintain the confidentiality of the information; and |
(k) |
the disclosure is to: |
(i) |
another Warrantholder; and |
(ii) |
the Warrantholders Representative. |
23
3.3 |
No Warrantholder shall use any confidential information relating to the Group for any purpose other than to perform its obligations, or to exercise its rights, under this Instrument. |
4. |
NOTICES |
4.1 |
For the purposes of this paragraph 4, but subject to paragraph 4.7, notice includes any other communication. |
4.2 |
Unless otherwise specified in this Instrument, a notice given to a party under or in connection with this Instrument: |
(a) |
shall be in writing and in English; |
(b) |
shall be sent by e-mail (unless a delivery failure message is received by the sender, in which case it may be sent to the registered address of the recipient by another method referred to in paragraph 4.5(b)): |
(i) |
in the case of the Company, to legal-corporate@babylonhealth.com (marked for the attention of the General Counsel); |
(ii) |
in the case of the Initial Warrantholders, to the Warrantholders Representative at Ipeer@albacorecapital.com and legal@albacorecapital.com (marked for the attention of Itay Peer and Joe Ohlson), or such other e-mail address or person as that person may notify to the Company in accordance with the provisions of this paragraph 4; and |
(iii) |
in the case of any Warrantholder (other than the Initial Warrantholders) to such e-mail address or person as that Warrantholder shall notify to the Company in accordance with the provisions of this paragraph; and |
(c) |
unless proved otherwise, is deemed received as set out in paragraph 4.5. |
4.3 |
Each Warrantholder (other than an Initial Warrantholder) shall register with the Company an e-mail address to which notices can be sent and, if such Warrantholder fails to do so, notice may be given to that Warrantholder by sending the same by any of the methods referred to in paragraph 4.2 to the last known e-mail address of such Warrantholder or, if none, by sending such notice to the Warrantholders Representative. |
4.4 |
A Warrantholder may change its details for service of notices by giving notice to the Company following any change. Any change notified under this paragraph 4.4 shall take effect at 9am (London time) on the later of: |
(a) |
the date (if any) specified in the notice as the effective date for the change; or |
(b) |
five Business Days after deemed receipt of the notice. |
4.5 |
Delivery or receipt (as the case may be) of a notice is deemed to have taken place (if all other requirements in this paragraph 4 have been satisfied): |
(a) |
if sent by e-mail, at the time of transmission (provided that no delivery failure message is received by the sender); or |
(b) |
where a delivery failure message is received by the sender: |
(i) |
if delivered by hand, on signature of a delivery receipt or at the time the notice is left at the address; |
24
(ii) |
if sent by pre-paid first class post, recorded delivery or special delivery to an address in the United Kingdom, at 9am on the second Business Day after posting; or |
(iii) |
if sent by reputable international overnight courier to an address outside the country from which it is sent, on signature of a delivery receipt or at the time the notice is left at the address. |
If deemed receipt under the previous sub-paragraphs of this paragraph 4.5 would occur outside business hours (meaning 9am to 5.30pm Monday to Friday on a day that is not a public holiday in the place of deemed receipt), at 9am on the day when business next starts in the place of deemed receipt. For the purposes of this paragraph 4.5, all references to time are to local time in the place of deemed receipt.
4.6 |
To prove service, it is sufficient to prove that: |
(a) |
if delivered by hand or by reputable international overnight courier, the notice was delivered to the correct address; |
(b) |
if sent by e-mail, a transmission report was received confirming that the notice was successfully transmitted to the correct e-mail address; or |
(c) |
if sent by post, the envelope containing the notice was properly addressed, paid for and posted. |
4.7 |
This paragraph 4 does not apply to the service of any proceedings or other documents in any legal action or, where applicable, any arbitration or other method of dispute resolution. |
4.8 |
All notices with respect to Warrants registered in the names of joint holders shall be given to whichever of such persons is named first in the Register and any notice so given shall be sufficient notice to all the joint registered holders of such Warrants. |
4.9 |
Any person who, whether by operation of law, transfer or other means whatsoever, becomes entitled to any Warrant, shall be bound by every notice properly given to the person from whom it derives title to such Warrant. |
4.10 |
When a given number of days notice must be given, the day of service shall be included but the day on which such notice shall expire shall not be included in calculating the number of days. The signature to any notice to be given by the Company may be written or printed. |
25
Exhibit 4.7
NOTE CERTIFICATE
[Face of Certificate]
THE NOTES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT). THE NOTES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
US$58,000,000 No. 001
Babylon Holdings Limited
(incorporated with limited liability under the laws of Jersey)
US$200,000,000 Notes due 2026
This Certificate is issued in in respect of the US$200,000,000 Notes due 2026 (the Notes) of Babylon Holdings Limited (the Issuer) issued in Authorised Denominations of US$200,000 and integral multiples of US$1,000 in excess thereof.
References herein to the Conditions (or to any particular numbered Condition) shall be to the Conditions (or that particular one of them) set out below. Words and expressions defined in the Conditions shall bear the same meaning when used in this Certificate. This Certificate is issued with the benefit of, and subject to the provisions contained in, the Conditions and the Deed Poll.
This Certificate is issued in respect of Notes having an aggregate principal amount of:
U.S.$58,000,000 (FIFTY EIGHT MILLION UNITED STATES DOLLARS)
THIS IS TO CERTIFY that AlbaCore Partners II Investment Holdings D Designated Activity Company is/are the registered holder(s) of the Notes to which this Certificate relates and is/are entitled to such interest and other amounts as are payable under the Conditions, all subject to and in accordance with the Conditions.The statements in the legend set out above are an integral part of the terms of this Certificate and, by acceptance of this Certificate, the registered holder of the Notes to which this Certificate relates agrees to be subject to and bound by the terms and provisions set out in the legend.
This Certificate is not a document of title. Entitlements are determined by entry in the Register and only the duly registered holder from time-to-time is entitled to payment in respect of this Certificate.
Any notices in connection with this Note shall be sent Notices@albacorecapital.com (with a copy to Ipeer@albacorecapital.com and legal@albacorecapital.com) to the attention of the Directors (copy to: Legal Department).
This Certificate and any non-contractual obligations arising out of or in connection with it, shall be governed by and construed in accordance with English law.
If any provision in or obligation under the Notes evidenced by this Certificate is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that will not affect or impair (i) the validity, legality or enforceability under the law of that jurisdiction of any other provision in or obligation under the Notes evidenced by this Certificate, or (ii) the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision in or obligation under the Notes evidenced by this Certificate.
[Liberty Note Certificate]
[Reverse of Note]
CONDITIONS OF THE NOTES
ISSUER
Babylon Holdings Limited
[Liberty Note Certificate]
Form of Transfer of Note
FOR VALUE RECEIVED the undersigned sell(s), assign(s) and transfer(s) to:
(Please print or type name and address (including postal code) of transferee)
US$[●] principal amount of the Notes evidenced by this Certificate and all rights hereunder, hereby irrevocably constituting and appointing Babylon Holdings Limited as attorney to transfer such principal amount of Notes in the register maintained by Babylon Holdings Limited with full power of substitution.
Signature(s) | ||||||
The undersigned is acquiring US$[●] principal amount of the Notes evidenced by this Certificate and agrees to be bound by the obligations equivalent to those from which the transferor was bound under the Notes.
Signature(s) | ||||||
Date: |
NOTE:
1. |
This form of transfer must be accompanied by such documents, evidence and information as may be required pursuant to the Conditions, must be endorsed on the Certificate to which this form of transfer relates and must be executed under the hand of the transferor or, if the transferor is a corporation, this form of transfer must be executed either under its common seal or (a) in the case of a company incorporated in England and Wales, under the hand of two of its officers duly authorised in writing or (b) in the case of a foreign company, by way of the signature of any person(s) who, under the laws of the country of incorporation of that company, is/are acting under the authority of the company, and, in the case of (a) and (b) the document so authorising the officers must be delivered with this form of transfer. |
2. |
The signature(s) on this form of transfer must correspond with the name(s) as it/they appear(s) on the face of this Certificate in every particular, without alteration or enlargement or any change whatever. |
[Liberty Note Certificate]
NOTE CERTIFICATE
[Face of Certificate]
THE NOTES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT). THE NOTES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
US$137,000,000 No. 002
Babylon Holdings Limited
(incorporated with limited liability under the laws of Jersey)
US$200,000,000 Notes due 2026
This Certificate is issued in in respect of the US$200,000,000 Notes due 2026 (the Notes) of Babylon Holdings Limited (the Issuer) issued in Authorised Denominations of US$200,000 and integral multiples of US$1,000 in excess thereof.
References herein to the Conditions (or to any particular numbered Condition) shall be to the Conditions (or that particular one of them) set out below. Words and expressions defined in the Conditions shall bear the same meaning when used in this Certificate. This Certificate is issued with the benefit of, and subject to the provisions contained in, the Conditions and the Deed Poll.
This Certificate is issued in respect of Notes having an aggregate principal amount of:
U.S.$137,000,000 (ONE HUNDRED AND THIRTY SEVEN MILLION UNITED STATES DOLLARS)
THIS IS TO CERTIFY that AlbaCore Partners III Investment Holdings Designated Activity Company is/are the registered holder(s) of the Notes to which this Certificate relates and is/are entitled to such interest and other amounts as are payable under the Conditions, all subject to and in accordance with the Conditions.The statements in the legend set out above are an integral part of the terms of this Certificate and, by acceptance of this Certificate, the registered holder of the Notes to which this Certificate relates agrees to be subject to and bound by the terms and provisions set out in the legend.
This Certificate is not a document of title. Entitlements are determined by entry in the Register and only the duly registered holder from time-to-time is entitled to payment in respect of this Certificate.
Any notices in connection with this Note shall be sent to Notices@albacorecapital.com (with a copy to Ipeer@albacorecapital.com and legal@albacorecapital.com) to the attention of the Directors (copy to: Legal Department).
This Certificate and any non-contractual obligations arising out of or in connection with it, shall be governed by and construed in accordance with English law.
If any provision in or obligation under the Notes evidenced by this Certificate is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that will not affect or impair (i) the validity, legality or enforceability under the law of that jurisdiction of any other provision in or obligation under the Notes evidenced by this Certificate, or (ii) the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision in or obligation under the Notes evidenced by this Certificate.
[Liberty Note Certificate]
[Reverse of Note]
CONDITIONS OF THE NOTES
ISSUER
Babylon Holdings Limited
[Liberty Note Certificate]
Form of Transfer of Note
FOR VALUE RECEIVED the undersigned sell(s), assign(s) and transfer(s) to:
(Please print or type name and address (including postal code) of transferee)
US$[●] principal amount of the Notes evidenced by this Certificate and all rights hereunder, hereby irrevocably constituting and appointing Babylon Holdings Limited as attorney to transfer such principal amount of Notes in the register maintained by Babylon Holdings Limited with full power of substitution.
Signature(s) | ||||||
The undersigned is acquiring US$[●] principal amount of the Notes evidenced by this Certificate and agrees to be bound by the obligations equivalent to those from which the transferor was bound under the Notes.
Signature(s) | ||||||
Date: |
NOTE:
1. |
This form of transfer must be accompanied by such documents, evidence and information as may be required pursuant to the Conditions, must be endorsed on the Certificate to which this form of transfer relates and must be executed under the hand of the transferor or, if the transferor is a corporation, this form of transfer must be executed either under its common seal or (a) in the case of a company incorporated in England and Wales, under the hand of two of its officers duly authorised in writing or (b) in the case of a foreign company, by way of the signature of any person(s) who, under the laws of the country of incorporation of that company, is/are acting under the authority of the company, and, in the case of (a) and (b) the document so authorising the officers must be delivered with this form of transfer. |
2. |
The signature(s) on this form of transfer must correspond with the name(s) as it/they appear(s) on the face of this Certificate in every particular, without alteration or enlargement or any change whatever. |
[Liberty Note Certificate]
NOTE CERTIFICATE
[Face of Certificate]
THE NOTES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT). THE NOTES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
US$5,000,000 No. 003
Babylon Holdings Limited
(incorporated with limited liability under the laws of Jersey)
US$200,000,000 Notes due 2026
This Certificate is issued in in respect of the US$200,000,000 Notes due 2026 (the Notes) of Babylon Holdings Limited (the Issuer) issued in Authorised Denominations of US$200,000 and integral multiples of US$1,000 in excess thereof.
References herein to the Conditions (or to any particular numbered Condition) shall be to the Conditions (or that particular one of them) set out below. Words and expressions defined in the Conditions shall bear the same meaning when used in this Certificate. This Certificate is issued with the benefit of, and subject to the provisions contained in, the Conditions and the Deed Poll.
This Certificate is issued in respect of Notes having an aggregate principal amount of:
U.S.$5,000,000 (FIVE MILLION UNITED STATES DOLLARS)
THIS IS TO CERTIFY that AlbaCore Strategic Investments LP is/are the registered holder(s) of the Notes to which this Certificate relates and is/are entitled to such interest and other amounts as are payable under the Conditions, all subject to and in accordance with the Conditions.The statements in the legend set out above are an integral part of the terms of this Certificate and, by acceptance of this Certificate, the registered holder of the Notes to which this Certificate relates agrees to be subject to and bound by the terms and provisions set out in the legend.
This Certificate is not a document of title. Entitlements are determined by entry in the Register and only the duly registered holder from time-to-time is entitled to payment in respect of this Certificate.
Any notices in connection with this Note shall be sent to Notices@albacorecapital.com (with a copy to Ipeer@albacorecapital.com and legal@albacorecapital.com) to the attention of the Directors (copy to: Legal Department).
This Certificate and any non-contractual obligations arising out of or in connection with it, shall be governed by and construed in accordance with English law.
If any provision in or obligation under the Notes evidenced by this Certificate is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that will not affect or impair (i) the validity, legality or enforceability under the law of that jurisdiction of any other provision in or obligation under the Notes evidenced by this Certificate, or (ii) the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision in or obligation under the Notes evidenced by this Certificate.
[Liberty Note Certificate]
[Reverse of Note]
CONDITIONS OF THE NOTES
ISSUER
Babylon Holdings Limited
[Liberty Note Certificate]
Form of Transfer of Note
FOR VALUE RECEIVED the undersigned sell(s), assign(s) and transfer(s) to:
(Please print or type name and address (including postal code) of transferee)
US$[●] principal amount of the Notes evidenced by this Certificate and all rights hereunder, hereby irrevocably constituting and appointing Babylon Holdings Limited as attorney to transfer such principal amount of Notes in the register maintained by Babylon Holdings Limited with full power of substitution.
Signature(s) | ||||||
The undersigned is acquiring US$[●] principal amount of the Notes evidenced by this Certificate and agrees to be bound by the obligations equivalent to those from which the transferor was bound under the Notes.
Signature(s) | ||||||
Date: |
NOTE:
1. |
This form of transfer must be accompanied by such documents, evidence and information as may be required pursuant to the Conditions, must be endorsed on the Certificate to which this form of transfer relates and must be executed under the hand of the transferor or, if the transferor is a corporation, this form of transfer must be executed either under its common seal or (a) in the case of a company incorporated in England and Wales, under the hand of two of its officers duly authorised in writing or (b) in the case of a foreign company, by way of the signature of any person(s) who, under the laws of the country of incorporation of that company, is/are acting under the authority of the company, and, in the case of (a) and (b) the document so authorising the officers must be delivered with this form of transfer. |
2. |
The signature(s) on this form of transfer must correspond with the name(s) as it/they appear(s) on the face of this Certificate in every particular, without alteration or enlargement or any change whatever. |
[Liberty Note Certificate]
Exhibit 5.1
8 November 2021 | Our Ref: JH/DL/LS/TF/J44759 | |
Babylon Holdings Limited 31 Esplanade St Helier Jersey JE2 3QA
(the Addressee) |
Dear Addressee
BABYLON HOLDINGS LIMITED (THE COMPANY)
We have been asked to provide this legal opinion to you with regard to the laws of Jersey in relation to the Registration Statement on Form F-1 (the Registration Statement) being filed with the Securities and Exchange Commission in relation to the Companys registration under the US Securities Act of 1933, as amended (the Securities Act) of up to 370,530,280 Class A ordinary shares with a par value of $0.0000422573245084686 per share (the Shares).
For the purposes of giving this opinion, we have examined and relied upon the originals, copies or translations of the documents listed in Schedule 1 (the Documents).
In giving this opinion we have relied upon the assumptions set out in Schedule 2, which we have not independently verified.
We are Jersey lawyers and express no opinion as to any laws other than the laws of Jersey in force and as interpreted at the date of this opinion. We have not, for the purposes of this opinion, made any investigation of the laws, rules or regulations of any other jurisdiction. Except as explicitly stated herein, we express no opinion in relation to any representation or warranty contained in the Documents nor upon matters of fact or the commercial terms of the transactions contemplated by the Documents.
Based upon the foregoing examinations and assumptions and having regard to legal considerations which we consider relevant, and subject to the qualifications set out in Schedule 3, and under the laws of Jersey, we give the following opinions in relation to the matters set out below.
In this opinion, the term non-assessable means, in respect of a Share, that the consideration for which the Company has agreed to issue that Share has been paid in full to the Company, such that no further or additional sum is payable to the Company or owed by the holder of that Share in respect of the purchase price of that Share.
OPINION
As a matter of Jersey law, and on the basis of and subject to the assumptions and qualifications set out herein, we are of the opinion that the Shares have been validly issued, are fully paid and are non-assessable.
Walkers (Jersey) LLP
Registered as a limited liability partnership in Jersey with registration number 84
PO Box 72, Walker House, 28-34 Hill Street, St Helier, Jersey JE4 8PN, Channel Islands
T +44(0)1534 700 700 F +44(0)1534 700 800 www.walkersglobal.com
Bermuda | British Virgin Islands | Cayman Islands | Dubai | Guernsey | Hong Kong | Ireland | Jersey | London | Singapore
WALKERS | Page 2 |
GOVERNING LAW, LIMITATIONS, BENEFIT AND DISCLOSURE
This opinion shall be governed by and construed in accordance with the laws of Jersey and is limited to the matters expressly stated herein.
This opinion is limited to matters of Jersey law and practice as at the date hereof and we have made no investigation and express no opinion with respect to the law or practice of any other jurisdiction.
We assume no obligation to advise you (to any other person who may rely on this opinion in accordance with this paragraph), or undertake any investigations, as to any legal developments or factual matter arising after the date of this opinion that might affect the opinions expressed herein.
We consent to the filing of a copy of this opinion as Exhibit 5.1 to the Registration Statement and to reference to us being made in the Registration Statement. In giving this consent, we do not admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations promulgated by the US Securities and Exchange Commission under the Securities Act.
Yours faithfully
WALKERS (JERSEY) LLP
WALKERS | Page 3 |
SCHEDULE 1
LIST OF DOCUMENTS EXAMINED
(a) |
the Registration Statement; |
(b) |
the Certificate of Incorporation dated 11 April 2014 and the Memorandum and Articles of Association in force as at the date hereof (the Memorandum and Articles); |
(c) |
the results of an online search of the public records of the Company conducted on 8 November 2021 maintained by the Registrar (the Company Search); |
(d) |
a certified copies of the register of members of the Company dated 4 November 2021; |
(e) |
copies of the following COBO consents: |
(i) |
a consent to issue shares dated 1 January 2017 issued to the Company by the Jersey Financial Services Commission (the Commission) under the Control of Borrowing (Jersey) Order 1958, as amended (COBO Law); |
(ii) |
a consent to issue certain warrants dated 23 March 2021 issued to the Company by the Commission under the COBO Law; and |
(iii) |
a consent to issue warrants, options and share appreciation rights in connection with the Registration Statement dated 7 September 2021 issued to the Company by the Commission under the COBO Law, |
(e (i) to (iii) above being, together, the COBO Consents);
(f) |
a consent to circulate a prospectus dated 7 September 2021 issued to the Company by the Commission, pursuant to the Companies (General Provisions) (Jersey) Order 2002, as amended (the CGPO Consent); and |
(g) |
copies of resolutions of the directors of the Company passed on: |
(i) |
3 June 2021; |
(ii) |
6 September 2021; and |
(iii) |
19 October 2021. |
each at meetings of the board of directors of the Company (together, the Director Resolutions)
WALKERS | Page 4 |
SCHEDULE 2
ASSUMPTIONS
1. |
The originals of all documents examined in connection with this opinion are authentic. The signatures, initials and seals on the Documents are genuine and are those of a person or persons given power to execute the (where at all relevant) the Documents under the Director Resolutions or any power of attorney given by the Company to execute such documents. All documents purporting to be sealed have been so sealed. All copies are complete and conform to their originals. Any translations are a complete and accurate translation of the original document they purport to translate. The Documents conform in every material respect to the latest drafts of the same produced to us and, where provided in successive drafts, have been marked up to indicate all changes to such documents. Where any means of electronic signature has been used or when any contract has been formed by means of electronic communication, the method used identifies the person who provided the signature or formed the contract, indicates the persons approval of the document or contract, was adopted with the intention of creating a duly executed, valid and binding contract or document, and was carried out with the consent of all other parties to or intended recipients of such contract or document. |
2. |
The Company has received in full the consideration for which the Company agreed to issue the Shares. |
3. |
Words and phrases used in the Registration Statement have the same meaning and effect as they would if the Registration Statement were governed by Jersey law. |
4. |
No other event occurs after the date of this opinion which would affect the opinion herein stated. |
5. |
There is no provision of law or regulation of any jurisdiction other than Jersey which would have any adverse implication in relation to the opinion expressed hereunder. |
6. |
There has been no amendment to any of the COBO Consents or the CGPO Consent. |
7. |
Where a Share is to be issued upon exercise of a warrant or option or pursuant to a conversion of a Class B Ordinary Share, the issue of such Shares will be duly authorized and approved by the board of directors the Company. |
8. |
The Memorandum and Articles are the memorandum and articles of association of the Company and are in force at the date hereof and have embodied in them or attached to them copies of all resolutions or agreements or acts of court to which the provisions of Articles 100 or 125 of the Companies (Jersey) Law 1991 as amended (the CJL) apply. |
WALKERS | Page 5 |
SCHEDULE 3
QUALIFICATIONS
1. |
The obligations of the Company under, or in respect of, the Shares will be subject to any law from time to time in force relating to bankruptcy, insolvency, liquidation, reorganization or administration or any other law or legal procedure affecting generally the enforcement of creditors rights. |
2. |
Our opinion is subject to any matter of fact that has not been disclosed to us. |
3. |
The register of members of a Jersey company is prima facie evidence of any matters which are by the CJL directed or authorized to be inserted in it. The CJL requires that the register of members of a Jersey company includes, among other things, the name and address of every member and, where he or she is a member because he or she holds shares in the company, the number of shares held by the member and, in the case of shares which are not fully paid, the amount remaining unpaid on each share. |
Exhibit 21.1
Babylon Holdings Limited Subsidiaries
Babylon Healthcare Services Limited, a U.K. company
Babylon International Limited, a U.K. company
Babylon Partners Limited, a U.K. company
Babylon Inc., a U.S. company incorporated in DE
Babylon Acquisition Corp., a U.S. company incorporated in DE
Babylon Rwanda Limited, a Rwandan company
Health Innovator Inc., a U.S. company incorporated in DE
Babylon Healthcare Inc., a U.S. Company incorporated in DE, a subsidiary of Babylon Inc.
Babylon Singapore PTE Ltd, a Singaporean company
Higi SH Holdings Inc., a U.S. company incorporated in DE, a subsidiary if Babylon Acquisition Corp.
Alkuri Global Acquisition Corp., a U.S. company incorporated in DE
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the use of our report dated September 15, 2021, with respect to the consolidated financial statements of Babylon Holdings Limited, included herein and to the reference to our firm under the heading Experts in the prospectus.
/s/ KPMG LLP
London, United Kingdom
November 8, 2021
Exhibit 23.2
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS CONSENT
We consent to the inclusion in this Registration Statement of Babylon Holdings Limited on Form F-1 of our report dated March 29, 2021, with respect to our audit of the financial statements of Alkuri Global Acquisition Corp. (now a subsidiary of Babylon Holdings Limited) as of December 31, 2020 and for the period from December 1, 2020 (inception) through December 31, 2020, which report appears in the Prospectus, which is part of this Registration Statement. We were dismissed as auditors on October 20, 2021 and, accordingly, we have not performed any audit or review procedures with respect to any financial statements appearing in such Prospectus for the periods after the date of our dismissal. We also consent to the reference to our Firm under the heading Experts in such Prospectus.
/s/ Marcum LLP
Marcum LLP
New York, NY
November 8, 2021
Exhibit 23.3
Consent of Independent Auditors
We consent to the use of our independent auditors report dated November 8, 2021 with respect to the consolidated financial statements of higi SH Holdings, Inc. and Subsidiaries as of and for the year ended December 31, 2020 in the Form F-1 of Babylon Holdings Limited. We also consent to the reference to our Firm under the heading Experts in the Prospectus.
/s/ BAKER TILLY US, LLP
Chicago, IL
November 8, 2021