Business Context and Reporting Period
Atlas Crest Investment Corp. filed this Form 8-K on September 14, 2021, reporting the results of its special stockholder meeting regarding its proposed business combination with Archer Aviation Inc. Atlas was a special purpose acquisition company; this filing does not present a quarterly or annual operating period for Archer or Atlas.
Key Financial and Capitalization Information
- Approximately 50,000,000 Class A shares and 12,500,000 Class B shares were outstanding as of the August 5, 2021 record date.
- 38,112,953 shares, or approximately 60.98% of outstanding voting shares entitled to vote, were represented at the meeting.
- Holders of 24,239,307 Class A shares elected to redeem their shares for approximately $10.00 per share, for aggregate cash redemptions of $242,420,848.23.
- The filing does not provide revenue, profit or loss, cash flow, margins, debt, liquidity balances, or other operating financial metrics for Archer or Atlas.
Material Changes and Transaction Approvals
Stockholders approved all principal business combination-related proposals. The Business Combination Proposal received 36,521,874 votes for, 1,527,825 against, and 63,254 abstentions. The transaction contemplated the merger of Merger Sub with and into Archer, with Archer surviving as a wholly owned subsidiary of Atlas.
- The Charter Proposal was approved, including changing the company name to Archer Aviation Inc. and increasing authorized capital stock from 221,000,000 shares to 1,010,000,000 shares.
- The approved charter changes include a dual-class structure under which Class A holders receive one vote per share and Class B holders receive ten votes per share.
- Advisory governance proposals concerning authorized shares, voting rights and supermajority approval provisions were approved.
- The NYSE Proposal authorizing the issuance of 2,244,780 Class A shares, up to 215,995,224 Class B shares in the business combination, and 60,000,000 Class A shares in the PIPE financing was approved.
- The 2021 Equity Incentive Plan and 2021 Employee Stock Purchase Plan were approved.
- The adjournment proposal was approved but was not needed because sufficient votes existed to approve the other proposals.
Guidance, Outlook, Risks and Unusual Items
Subject to satisfaction or waiver of remaining closing conditions, the business combination was expected to close on September 16, 2021. Following closing, the combined company’s common stock and warrants were expected to trade on the NYSE under the symbols ACHR and ACHR WS, respectively, beginning September 17, 2021.
The filing highlights risks associated with Archer’s early-stage business, projected losses, need for additional capital, aircraft development and certification, manufacturing scale-up, supplier dependence, reliance on United Airlines, competition, infrastructure, regulatory approval, cybersecurity, COVID-19, intellectual property, litigation with Wisk Aero LLC, potential cost overruns and the proposed dual-class structure.
The redemption of approximately $242.4 million of Class A shares is the principal unusual capital event reported. The filing contains forward-looking statements and cautions that actual results and transaction timing could differ materially from expectations.
Important Facts for Investors to Verify
- Whether all remaining closing conditions were satisfied and the transaction closed on the expected date.
- The final amount of cash remaining after redemptions, transaction expenses and the PIPE financing.
- The final number and classes of shares issued in the business combination and PIPE financing.
- Archer’s subsequent financial statements, including losses, cash usage, capital requirements and liquidity.
- The status of aircraft certification, manufacturing scale-up, United Airlines commitments, Wisk Aero litigation and other identified regulatory and execution risks.
- The effect of the dual-class structure and ten-to-one Class B voting rights on investor control and governance.