Lanzatech Global, Inc. current report, 08 March 2022

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Business Context and Reporting Period

This Form 8-K was filed by AMCI Acquisition Corp. II on March 8, 2022, regarding its proposed business combination with LanzaTech NZ, Inc. Upon closing, AMCI is expected to be renamed LanzaTech Global, Inc., with LanzaTech becoming a wholly owned subsidiary.

Key Transaction and Financial Terms

  • AMCI agreed to acquire all outstanding LanzaTech equity for aggregate consideration valued at $1.817 billion.
  • LanzaTech equity consideration will consist of New LanzaTech common stock valued at $10.00 per share, subject to the exchange ratio and related adjustments specified in the merger agreement.
  • PIPE investors agreed to purchase 12.5 million AMCI Class A shares at $10.00 per share, implying gross proceeds of $125 million. The filing states that 3 million shares relate to a PIPE investor holding a LanzaTech SAFE Note, pursuant to a subscription agreement to be entered into before closing.
  • A closing condition requires AMCI to have at least $250 million of cash, consisting of trust-account cash and subscription proceeds, after redemptions and transaction expenses.
  • AMCI must also have at least $5,000,001 of net tangible assets after giving effect to redemptions and subscription proceeds.
  • The filing does not provide revenue, net income, operating margin, cash flow, debt, or liquidity balances for LanzaTech or AMCI for a comparable reporting period.

Material Changes Versus the Prior Comparable Period

The filing does not present period-over-period operating or financial results. The material development is the execution of the merger agreement and related financing, support, registration-rights, and lock-up arrangements.

Conditions, Outlook, Risks, and Unusual Items

  • Closing requires approval by AMCI and LanzaTech stockholders, effectiveness of a Form S-4 registration statement, expiration or termination of applicable Hart-Scott-Rodino review, no prohibitive governmental order, and Nasdaq listing of the combined company’s shares.
  • The merger is generally required to close by December 7, 2022, subject to specified extension rights and other termination provisions.
  • LanzaTech may terminate if, by July 7, 2022, AMCI has not secured at least $250 million of subscription commitments or agreements from AMCI stockholders not to redeem, net of transaction expenses.
  • LanzaTech stockholders representing approximately 69.56% of outstanding voting LanzaTech shares agreed to support the transaction and vote against competing proposals.
  • AMCI insiders agreed to support the transaction, waive certain anti-dilution protections, and not redeem their AMCI shares. They also agreed to potential forfeiture of up to 1.25 million Class B shares based on redemption levels.
  • Existing LanzaTech warrants, options, and restricted share awards will generally be converted or adjusted based on the transaction exchange ratio.
  • Registration rights and transfer restrictions will apply to specified holders. Certain sponsor and insider transfer restrictions may end after one year, or earlier if the stock-price conditions described in the filing are met; certain LanzaTech holders and employees are subject to six-month restrictions.
  • Risks include failure to satisfy closing conditions, AMCI stockholder redemptions, uncertainty of LanzaTech’s projections, financing and listing risks, execution of development activities and industry partnerships, intellectual-property risks, market adoption, future financing needs, and COVID-19 effects.

Important Facts for Investors to Verify

  • Review the definitive merger agreement, exchange-ratio calculations, and any omitted exhibits or schedules.
  • Confirm the final PIPE commitments, proceeds, pricing, and the treatment of the 3 million shares associated with the LanzaTech SAFE Note.
  • Verify trust-account cash, redemption levels, transaction expenses, and whether the $250 million minimum cash condition is satisfied.
  • Review the Form S-4/proxy statement for LanzaTech’s historical financial statements, projections, revenue model, cash burn, debt, margins, and use of proceeds.
  • Confirm required stockholder approvals, antitrust clearance, SEC effectiveness of the registration statement, and Nasdaq listing approval.
  • Assess the dilution implications of converted warrants, options, restricted shares, PIPE shares, sponsor shares, and potential insider share forfeitures.
  • Do not treat the transaction’s forward-looking statements or merger-agreement representations as guarantees of future performance.