References to the "Company," "
Cautionary Note Regarding Forward-Looking Statements
Some of the statements contained in this Quarterly Report on Form 10-Q may constitute "forward-looking statements" for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties (some of which are beyond our control) or other factors:
? we have no operating history and no revenues, and you have no basis on which to
evaluate our ability to achieve our business objective;
? our ability to select an appropriate target business or businesses;
our ability to complete a merger, share exchange, asset acquisition, share
? purchase, reorganization or similar business combination with one or more
businesses (the "Business Combination");
? our expectations around the performance of a prospective target business or
businesses;
? our success in retaining or recruiting, or changes required in, our officers,
key employees or directors following our initial Business Combination;
our officers and directors allocating their time to other businesses and
? potentially having conflicts of interest with our business or in approving our
initial Business Combination;
? our potential ability to obtain additional financing to complete our initial
Business Combination;
? our pool of prospective target businesses;
? our ability to consummate an initial Business Combination due to the
uncertainty resulting from the recent COVID-19 pandemic;
? the ability of our officers and directors to generate a number of potential
Business Combination opportunities;
? our public securities' potential liquidity and trading;
? the use of proceeds not held in the trust account or available to us from
interest income on the trust account balance;
21 Table of Contents
? the trust account not being subject to claims of third parties;
? our financial performance following our initial public offering (the "Initial
Public Offering"); and
the other risks and uncertainties discussed herein, in our filings with the
? and in our final prospectus relating to our Initial Public Offering, filed with
the
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Overview
We are a blank check company incorporated as a
Our sponsor is
The registration statement for our initial public offering was declared
effective on
The underwriters had a 45-day option from the date of the underwriting agreement
(
Simultaneously with the closing of the initial public offering, we completed the
private sale of an aggregate of 3,500,000 warrants (the "private placement
warrants") to the Sponsor at a purchase price of
Proposed Business Combination
On
If the Proposed Business Combination is approved by our stockholders and
22
Table of Contents
Under the Merger Agreement, we have agreed to acquire all of the outstanding
equity interests of
Pursuant to the Merger Agreement, at Closing: (i) each warrant to purchase
LanzaTech Shares (each, a "LanzaTech Warrant") that is outstanding and
unexercised immediately prior to Closing and would automatically be exercised or
exchanged in full in accordance with its terms by virtue of the occurrence of
the Merger, will be so automatically exercised or exchanged in full for the
applicable LanzaTech Shares, and each such LanzaTech Share will be treated as
being issued and outstanding immediately prior to Closing and will be canceled
and converted into the right to receive the applicable shares of New LanzaTech
Common Stock; and (ii) each LanzaTech Warrant that is outstanding and
unexercised immediately prior to the Closing and is not automatically exercised
in full as described in clause (i) will be converted into a warrant to purchase
shares of New LanzaTech Common Stock, in which case (a) the number of shares
underlying such New LanzaTech warrant (each, a "New LanzaTech Warrant") will be
determined by multiplying the number of LanzaTech Shares subject to such warrant
immediately prior to Closing, by the Exchange Ratio and (b) the per share
exercise price of such New LanzaTech Warrant will be determined by dividing the
per share exercise price of such LanzaTech Warrant immediately prior to the
Effective Time by the Exchange Ratio, except that in the case of certain
warrants specified in the Merger Agreement, such exercise price will be
Pursuant to the Merger Agreement, at Closing, each option to purchase LanzaTech Shares (each, a "LanzaTech Option") will be converted into an option to purchase a number of shares of New LanzaTech Common Stock (rounded down to the nearest whole share) equal to the product of (i) the number of LanzaTech Shares subject to such LanzaTech Option multiplied by (ii) the Exchange Ratio. The exercise price of such New LanzaTech option will be equal to the quotient of (a) the exercise price per share of such LanzaTech Option in effect immediately prior to the Effective Time divided by (b) the Exchange Ratio (and as so determined, this exercise price will be rounded up to the nearest full cent).
Pursuant to the Merger Agreement, at Closing, each award of restricted shares of
The closing of the Merger is subject to certain customary conditions, including,
among others, (i) adoption by AMCI's stockholders and
For additional information regarding the Merger Agreement, see the Company's
Registration Statement on Form S-4 filed by us on
This Form 10-Q does not assume the closing of the Proposed Business Combination.
23 Table of Contents Subscription Agreements
In connection with the execution of the Merger Agreement, we entered into
subscription agreements (the "Subscription Agreements") with certain accredited
and institutional buyers (the "
LanzaTech Support Agreement
In connection with the execution of the Merger Agreement, we entered into a
support agreement with certain
The
Sponsor Support Agreement
In connection with the execution of the Merger Agreement, the Sponsor and the
holders of all of the Founder Shares, including all of our directors and
officers (all of the foregoing, the "AMCI Insiders"), entered into a support
agreement (the "Sponsor Support Agreement") with the Company and
In addition, under the Sponsor Support Agreement, the AMCI Insiders agreed to forfeit, on a pro rata basis, a number of shares of Founder Shares equal to 1,250,000 shares of Founder Shares (which is one-third of the total number of shares of founder Shares outstanding) multiplied by a percentage equal to the percentage by which the level of redemptions of holders of Class A common stock, if any, exceeds 50% of the total issued and outstanding shares Class A common stock multiplied by two.
24 Table of Contents
The foregoing description of the Proposed Business Combination, the Subscription
and Agreements, the LanzaTech Support Agreement and the Sponsor Support
Agreement does not purport to be complete. For further information on the
Subscription Agreements, the LanzaTech Support Agreement and the Sponsor Support
Agreement refer to the full agreements filed with the
Results of Operations
Our entire activity since inception up to
For the six months ended
For the period from
Liquidity and Going Concern
As of
Our liquidity needs up to
In connection with the Company's assessment of going concern considerations in
accordance with FASB Accounting Standards Update ("ASU") 2014-15, "Disclosures
of Uncertainties about an Entity's Ability to Continue as a Going Concern,"
management has determined that the liquidity condition, and the mandatory
liquidation and subsequent dissolution that will be required if the Company does
not complete a business combination before
Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on our financial position, results of our operations and/or search for a target company, the specific impact is not readily determinable as of the date of the unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
25 Table of Contents Contractual Obligations Registration Rights
The holders of the (i) founder shares, which were issued in a private placement prior to the closing of the initial public offering, (ii) private placement warrants, which were issued in a private placement simultaneously with the closing of the initial public offering and the shares of Class A common stock underlying such private placement warrants and (iii) private placement warrants that may be issued upon conversion of Working Capital Loans, will have registration rights to require us to register a sale of any of its securities held by them prior to the consummation of the initial business combination pursuant to a registration rights agreement which was signed on the effective date of the initial public offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
We granted the underwriters a 45-day option from the date of the underwriting
agreement to purchase up to an additional 2,250,000 units to cover
over-allotments, if any. On
The underwriters were paid an underwriting discount of one percent (1%) of the
gross proceeds of the initial public offering, or
Administrative Service Fee
Subsequent to the closing of the initial public offering, we have agreed to pay
our Sponsor
Critical Accounting Policies
This management's discussion and analysis of our financial condition and results
of operations is based on our unaudited condensed financial statements, which
have been prepared in accordance with
26
Table of Contents
Class A Common Stock Shares Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, "Distinguishing Liabilities from Equity." Class A common stock subject to mandatory redemption (if any) are classified as liability instruments and is measured at fair value. Conditionally redeemable Class A common stock (including Class A common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, Class A common stock are classified as stockholders' equity. Our Class A common stock feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, as of the initial public offering, 15,000,000 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders' equity section of our condensed balance sheets.
Under ASC 480-10-S99, we have elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value at the end of the reporting period. This method would view the end of the reporting period as if it were also the redemption date of the security. Effective with the closing of the initial public offering, we recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.
Derivative Financial Instruments
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, "Derivatives and Hedging" ("ASC 815"). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The public warrants and the private placement warrants are recognized as
derivative liabilities in accordance with ASC 815. Accordingly, we recognize the
warrant instruments as liabilities at fair value and adjusts the carrying value
of the instruments to fair value at each reporting period until they are
exercised. The initial fair value of the public warrants issued in connection
with the initial public offering was estimated using a Monte-Carlo simulation
model. The fair value of the public warrants as of
Net Income (Loss) Per Share Of Common Stock
We comply with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." We have two classes of shares, which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per common share is calculated by dividing the net income (loss) by the weighted average shares of common stock outstanding for the respective period.
The calculation of diluted net income (loss) does not consider the effect of the
warrants underlying the units sold in the initial public offering and the
private placement warrants to purchase an aggregate of 11,000,000 warrants in
the calculation of diluted income (loss) per share, because their exercise is
contingent upon future events and their inclusion would be anti-dilutive under
the treasury stock method. As a result, diluted net income (loss) per share are
the same as basic net income (loss) per share for the three and six months ended
27 Table of Contents
Recent Accounting Pronouncements
In
Management does not believe that any other recently issued, but not yet effective, accounting standards updates, if currently adopted, would have a material effect on our unaudited condensed financial statements.
Off-Balance Sheet Arrangements
As of
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the unaudited condensed financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the unaudited condensed financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the executive compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an "emerging growth company," whichever is earlier.
© Edgar Online, source