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United States securities and exchange commission logo
March 26, 2021
Kevin Rakin
Chief Executive Officer
HighCape Capital Acquisition Corp.
452 Fifth Avenue, 21st Floor
New York, NY 10018
Re: HighCape Capital
Acquisition Corp.
Registration
Statement on Form S-4
Filed March 1, 2021
File No. 333-253691
Dear Mr. Rakin:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4 filed March 1, 2021
Certain Defined Terms, page 2
1. Although we do not
object to the inclusion of the glossary, please revise the text of the
prospectus to explain
these terms where first used. For example only, we note that
"Closing Date" and
"HighCape Party" are not defined at first use.
Questions and Answers About the Business Combination and the Special
Meeting, page 8
2. Please expand your
disclosure under an appropriate heading to highlight that you did not
obtain a fairness
opinion from a financial advisor regarding the merger consideration.
Kevin Rakin
FirstName LastNameKevin Rakin
HighCape Capital Acquisition Corp.
Comapany
March NameHighCape Capital Acquisition Corp.
26, 2021
March2 26, 2021 Page 2
Page
FirstName LastName
Simplified Post-Combination Structure, page 25
3. Please revise this chart to depict the voting percentage interests of
the various equity
holders in HighCape and the combined company and identify the entities
that will control
the combined company.
HighCape's Board of Directors' Reasons for the Approval of the Business
Combination, page 28
4. We note you disclosure on page 33 that your estimated transaction fees
and expenses are
$24 million. Please revise your disclosure here to quantify the
anticipated "substantial
transaction expenses" in connection with the business combination.
Conditions to the Completion of the Business Combination, page 29
5. Please amend your disclosure to identify each condition that is
subject to being waived.
Please make conforming changes to your Conditions to Closing of the
Business
Combination discussion beginning on page 117.
Interests of HighCape's Directors and Officers in the Business Combination,
page 31
6. We note your disclosure on page 165 that founder shares were
transferred to each of
David Colpman, Antony Loebel and Robert Taub, each of whom serves as a
director of
HighCape. In addition to disclosing the transfer, please include
additional disclosure here
and on page 110 explaining that your directors may have a conflict of
interest in
determining to recommend the business combination as a result of their
receipt of founder
shares.
7. Please quantify the out-of-pocket expenses incurred by your Sponsor,
executive officers,
directors, and their respective affiliates as of a recent practicable
date.
Summary of Risk Factors, page 34
8. We note your disclosure on page 90 that you will be a "controlled
company" and that Dr.
Rothberg will hold over 80.5% of the voting power of New Quantum-Si
s capital stock
pursuant to his holding of Class B common stock. Please add
appropriate disclosure in
the summary risk factors disclosing that Dr. Rothberg will hold
significant voting control
of New Quantum-Si.
Risk Factors Relating to HighCape and the Business Combination
The dual class structure of New Quantum-Si common stock will have the effect of
concentrating
voting power with New Quantum-Si's Chairman..., page 90
9. Please expand this risk factor to disclose if future issuances of
high-vote shares may be
dilutive to low-vote shareholders.
Kevin Rakin
FirstName LastNameKevin Rakin
HighCape Capital Acquisition Corp.
Comapany
March NameHighCape Capital Acquisition Corp.
26, 2021
March3 26, 2021 Page 3
Page
FirstName LastName
Background of the Business Combination, page 102
10. We note your disclosure that HighCape reviewed over 40 business
combination
opportunities and entered into nondisclosure agreements with 15
companies. Please
expand your disclosure to briefly discuss why such other opportunities
were not pursued.
11. We note your disclosure that you reached out to Dr. Rothberg in
October 2020 to inquire
whether HighCape could start discussions with any of the 4Catalyzer
Corporation
( 4Catalyzer ) companies. In addition, we note that 4Catalyzer has
multiple portfolio
companies. Please expand your disclosure to discuss how you arrived at
selecting Quantum-Si.
12. Please indicate how the combined company's super-voting corporate
governance structure
compares to Quantum-Si's corporate governance structure. For example,
disclose whether
Dr. Rothberg will have more votes or other rights in the combined
company than he
currently has in Quantum-Si.
13. Please revise to clarify how the transaction structure and
consideration evolved during the
negotiations between the parties, including proposals and
counter-proposals made during
the course of those negotiations. For example, please revise to
discuss the negotiations
regarding the valuation, structure, exchange ratio and the other
material terms from the
draft letter of intent delivered on December 31, 2020 until execution
of the Business
Combination Agreement. To the extent the valuation was changed please
revise to
disclose such change along with the reasons for such change.
14. We note your disclosure that HighCape received a valuation
presentation from J.P.
Morgan, which reviewed enterprise values of select publicly traded
companies. On page
108 you state that the HighCape Board did not seek a third-party
valuation. Please revise
your disclosure to clarify the role of J.P. Morgan and its valuation
presentation in the
Board s consideration of the terms of the Business Combination.
Additionally, please
disclose the criteria used by management to identify public companies
that management
considered comparable on the basis such companies operate in the
high-growth life
sciences tools sector or have disruptive technologies, as referenced
on page 108.
Certain Projected Financial Information of Quantum-Si, page 108
15. The risk factors on pages 45-46 reference the expectation that
substantial costs will be
incurred to commercialize, market and develop products. Presumably
these costs will be
required in order to generate the annual future revenue amounts that
are disclosed here
and were provided to High Cape's Board. If you believe that these
projected revenues can
be generated without having to incur any marketing, research,
development, management,
or other operating costs then please disclose that assumption and any
reasonable basis for
that assumption. Otherwise, please expand your disclosure to present
the projected
operating expenses and projected income for each period. Further,
please expand your
discussion to include a description and quantification of the
significant assumptions
underlying the magnitude and growth in revenue and gross margin from
2022 through
Kevin Rakin
FirstName LastNameKevin Rakin
HighCape Capital Acquisition Corp.
Comapany
March NameHighCape Capital Acquisition Corp.
26, 2021
March4 26, 2021 Page 4
Page
FirstName LastName
2025, as reflected in your projections for Quantum Si. At a minimum,
disclose the sales
volumes and per unit sales prices that support the revenue
projections, as well as the basis
for your projected per unit cost of sales. In addition, include a
discussion of the factors
that you considered in determining that these assumptions were
reasonable. Refer to the
relevant guidance in Item 10(b) of Regulation S-K.
Business of New Quantum-Si
Overview, page 177
16. Please clarify what you mean when you state "Next Generation Protein
Sequencing."
17. We note your risk factor disclosure on page 47 where you state
Quantum-Si has "a three
phase launch plan for commercialization, which includes a
collaboration phase, an early
access limited release phase and a broad commercial availability
phase." In addition, we
note your disclosure on page 107 where you state the Board considered
"Quantum-Si s
ability to demonstrate the value of its technology to existing and
potential users" as a
positive factor for the Business Combination. Please update your
disclosure here and
elsewhere in the registration statement as applicable to describe
material details on the
"collaboration phase," including providing additional details on
Quantum-Si's "existing"
users. To the extent a part of your platform it is not fully
developed, please revise your
disclosure to clearly describe the current status of each of your
planned adjacent products.
For example only, it appears you are still "developing [y]our
cloud-based platform" based
on your disclosure on page 189. Additionally, where you state on page
178 that you
"intend to follow a systematic and phased approach to successfully
launch and
commercialize [your] platform in 2022," please revise to clarify if
such anticipated
timeline refers to your commercializing research use only products for
non-diagnostic and
non-clinical purposes.
18. We note that you describe your detection platform and Next Generation
Protein
Sequencing as being able to "unlock deep biological information...at a
speed and scale that
is not available today." Please revise your disclosure to explain the
basis for this
statement.
Our Competitive Strengths, page 189
19. Please provide us the basis for your statement that you have a
highly attractive business
model and "[d]eep and expanding scientific validation" given your
current, pre-
commercial stage of development.
Competition, page 195
20. We note your disclosure regarding various competitors on page 56.
Please revise your
disclosure here to identify specific competitors. In addition, we note
your statement that,
"[w]e believe that we will be the first to offer a NPGS platform."
Please provide your
basis for this statement.
Kevin Rakin
HighCape Capital Acquisition Corp.
March 26, 2021
Page 5
Licenses related to certain intellectual property, page 215
21. We note your risk factor disclosure on page 74 where you state that,
"Quantum-Si s
current license agreements impose, and future agreements may impose,
various diligence,
commercialization, milestone payment, royalty, insurance and other
obligations on it and
require it to meet development timelines, or to exercise commercially
reasonable efforts to
develop and commercialize licensed products, in order to maintain the
licenses." Please
describe the material terms of each license agreement related to
intellectual property used
in your products. Please also file the agreements as exhibits to the
registration statement or
explain to us why they are not required to be filed. The description of
each agreement
should include (i) the royalty rate, or a range no greater than 10
percentage points per tier;
(ii) when the royalty provisions expire; (iii) milestone payments; (iv)
development
timeline obligations; and (v) term and termination provisions.
Technology and Services Exchange Agreements and License Agreements, page 265
22. We note your disclosure Quantum-Si has entered into certain license
agreements,
including agreements with Protein Evolution, Inc. and Tesseract Health,
Inc. Please revise
your disclosure to describe (i) when the royalty provisions expire and
(ii) term and
termination provisions. In addition, please file the agreements as
exhibits to the
registration statement or explain to us why they are not required to be
filed.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Franklin Wyman at 202-551-3660 or Al Pavot at
202-551-3738 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Jason Drory at 202-551-8342 or Christine Westbrook at 202-551-5019 with
any other
questions.
Sincerely,
FirstName LastNameKevin Rakin
Division of
Corporation Finance
Comapany NameHighCape Capital Acquisition Corp.
Office of Life
Sciences
March 26, 2021 Page 5
cc: David Johansen, Esq.
FirstName LastName