Business Context and Reporting Period
Atlas Crest Investment Corp. filed this Form 8-K on July 29, 2021, regarding its proposed business combination with Archer Aviation Inc. The transaction would result in Archer becoming a wholly owned subsidiary of Atlas, with Atlas expected to be the combined public company. The parties expected closing in the third quarter of 2021, subject to Atlas stockholder approval and other customary conditions.
Material Transaction Terms
- Atlas, Artemis Acquisition Sub Inc. and Archer entered into an Amended and Restated Business Combination Agreement.
- Archer’s outstanding common and preferred shares will be converted into the right to receive Atlas common stock based on a revised implied Archer equity value of $1.48 billion.
- The agreement modifies the definition of a Company Material Adverse Effect and limits Atlas’s ability to change its recommendation to stockholders to circumstances involving such an effect.
- The termination date if the transaction has not closed was extended to October 10, 2021.
- Atlas, its sponsor, Archer and certain Atlas directors and officers entered into an amended sponsor letter agreement. The sponsor agreed to subject 1,875,000 Atlas Class A shares issued at closing to vesting and forfeiture conditions.
Financial Metrics and Liquidity
The filing does not provide current-period or comparable-period revenue, profit or loss, cash flow, margins, debt, liquidity, or other operating financial metrics. It also does not provide updated financial guidance.
Outlook, Risks and Contingencies
Completion remained subject to Atlas stockholder approval, regulatory and other customary closing conditions. The filing’s forward-looking statements are subject to substantial uncertainty, including Archer’s early-stage operating history and projected losses, need for additional capital, ability to manufacture and deliver aircraft, certification and regulatory approvals, supplier dependence, development of commercial-scale manufacturing, market adoption of electric aircraft, competition, workforce and infrastructure constraints, COVID-19 effects, cybersecurity, intellectual-property matters, ongoing litigation with Wisk, redemption requests by Atlas public stockholders, and the risk that the transaction is delayed or not completed.
The filing also cautions that Archer’s projections and anticipated milestones may not be achieved and that United Airlines is a significant source of current aircraft orders and development support, creating counterparty concentration risk.
Important Facts to Verify
- Whether Atlas stockholders approved the transaction and whether all other closing conditions were satisfied.
- Whether the business combination closed by the extended October 10, 2021 termination date.
- The final equity value, exchange ratio, capitalization and sponsor-share vesting terms in the definitive transaction documents.
- Archer’s subsequent financial statements, cash requirements, projected losses and access to additional capital.
- The status of aircraft certification, manufacturing scale-up, United Airlines commitments and the Wisk litigation.