Filing summary
Entity and period: This is Kensington Capital Acquisition Corp. IV’s unaudited Form 10-Q for the quarter ended June 30, 2022—not an operating-company quarterly report filed by Amprius Technologies. Kensington was a blank-check company searching for a business combination. Its reported results largely reflect SPAC formation, IPO, trust investments, and warrant accounting; they do not describe Amprius’s operating performance.
Financial results and position
- Revenue and margins: No operating revenue was reported. Kensington said it would not generate operating revenue until, at the earliest, completion of a business combination. Operating margins are therefore not meaningful.
- Net income: Q2 2022 net income was $2.88 million; net income for the six months ended June 30 was $2.63 million. The filing attributes the results mainly to noncash gains from changes in warrant fair value and income on trust investments, offset by administrative and general expenses. Q2 general and administrative expense was approximately $1.61 million; six-month expense was approximately $1.71 million.
- Cash flow: Six-month operating cash use was $977,000. Investing cash use was $230.0 million, primarily the deposit into the trust account; financing provided $232.9 million, mainly from the IPO and private placement. Cash outside the trust account was $1.97 million at June 30.
- Liquidity and debt: Management reported approximately $1.0 million of working capital and $200,000 outstanding under a related-party working capital loan. It believed available working capital and borrowing capacity would meet needs through a business combination or one year from filing, but potential additional sponsor loans were not committed. The trust account held approximately $230.3 million and was subject to transaction and redemption terms.
- Other liabilities: Warrant liabilities were $11.31 million and deferred underwriting fees were $8.05 million. Deferred fees are payable from the trust account only if a business combination is completed, subject to the underwriting agreement.
Changes and transaction context
Kensington completed its IPO on March 4, 2022, issuing 23 million units at $10 each and raising $230 million gross; it also raised $8 million through a private placement of warrants. Compared with the prior-year periods, which showed only formation expenses and losses, 2022 results reflect the IPO, trust-account income, and warrant fair-value changes. The reported profit is not evidence of operating earnings.
On May 11, 2022, Kensington, its merger subsidiary, and Amprius entered into a business combination agreement. The proposed transaction contemplated Amprius becoming a wholly owned subsidiary of the post-transaction company. This filing does not report completion of the transaction or provide Amprius operating financials.
Outlook, risks, and contingencies
- Kensington had until March 4, 2024, subject to possible extensions under its governing documents, to complete a business combination. If it failed, public shares would generally be redeemed from the trust account and warrants would expire worthless.
- Public shareholders could redeem shares in connection with a business combination. Redemptions, transaction financing, and warrant terms could affect cash available and dilution.
- Management said COVID-19 could adversely affect its position, results, or target search, but the impact was not determinable. The effects of Russia’s military action in Ukraine and related sanctions were also not determinable.
- Quarterly profit was materially affected by warrant fair-value accounting; such gains are noncash and may fluctuate. Warrant valuations use market prices or valuation models and assumptions.
- The filing reported no legal proceedings and no material changes to the previously disclosed risk factors. Management concluded disclosure controls were effective as of June 30, 2022.
Important facts for investors to verify
- Whether and on what final terms the proposed Kensington–Amprius transaction closed, including any financing, redemptions, and transaction expenses.
- How much trust-account cash remained available after redemptions and transaction costs, versus the approximately $1.97 million of cash outside the trust reported here.
- The noncash nature and volatility of warrant-related gains, and the potential dilution from public, private-placement, and other warrants.
- The status and terms of the $200,000 related-party loan, any additional funding needs, and the deferred underwriting fee payable upon a completed business combination.
- Amprius’s separate operating results and outlook, which this Kensington filing does not provide.