Filing summary — AMCI Acquisition Corp. II, quarter ended September 30, 2021
Important issuer mismatch: The request identifies Lanzatech Global, Inc., but the supplied 10-Q is for AMCI Acquisition Corp. II, a blank-check company (SPAC). The figures and disclosures below are for AMCI, not LanzaTech.
Business context and reporting period
AMCI was formed in January 2021 to pursue a business combination. As of September 30, 2021, it had not selected a target, begun substantive discussions with a target, conducted operations, or generated operating revenue. The company completed its IPO on August 6, 2021, selling 15 million units for $150 million gross proceeds and placing $150 million in a trust account. Each unit included one redeemable Class A share and one-half warrant.
Financial results and liquidity
- Revenue: None. The company expects no operating revenue before completing a business combination.
- Net income: $469,097 for the three months ended September 30, 2021; $467,528 from inception through September 30. Quarterly basic and diluted net income per share was $0.04 for both share classes.
- Drivers of income: The quarter included a $1.383 million gain from changes in warrant fair value and $2,178 of trust investment income, offset by $284,686 of general and administrative expense, $20,000 of related-party administrative fees, $134,845 of franchise tax expense, and $476,450 of offering costs allocated to warrant liabilities. Income therefore primarily reflects a non-cash warrant valuation change, not operating performance.
- Cash flow: From inception through September 30, operating activities used $95,325, investing activities used $150 million for the trust deposit, and financing activities provided $150.853 million. Ending cash was $758,091.
- Assets and liquidity: Total assets were $151.389 million, including $150.002 million held in trust and $758,091 in cash. Working capital was approximately $0.8 million. Trust funds are restricted for specified purposes and are not ordinary operating cash.
- Liabilities and equity: Total liabilities were $11.708 million, including $6.132 million of derivative warrant liabilities and $5.25 million of deferred underwriting commissions payable upon a business combination. Stockholders’ deficit was $10.319 million. No working capital loans were outstanding.
- Margins: Not meaningful because the company had no revenue.
Material changes, accounting, and unusual items
- The company restated its previously issued August 6, 2021 balance sheet, classifying all 15 million redeemable Class A shares as temporary equity rather than partly as permanent equity. The restatement also recognized accretion to redemption value and the fair value of founder shares transferred to anchor investors as IPO-related costs. At the IPO date, the restatement reduced reported stockholders’ equity by approximately $16.3 million and produced a stockholders’ deficit of approximately $11.3 million.
- The over-allotment option expired unexercised on September 17, resulting in forfeiture of 562,500 founder shares; 3.75 million Class B shares remained outstanding.
- Public and private placement warrants are recorded as liabilities and remeasured at fair value. The public warrants moved from Level 3 to Level 1 fair value measurement after separate trading began.
- Management reported disclosure controls were not effective at quarter-end because of a material weakness in controls over accounting for complex financial instruments. That weakness led to the balance-sheet restatement; management said it was devoting resources to remediation.
Outlook, risks, and contingencies
AMCI had 24 months from the IPO closing to complete a business combination, or its public shares would be redeemed and the company wound up, subject to the filing’s terms. Management believed available working capital and potential sponsor or affiliate borrowing capacity would be sufficient through the earlier of a business combination or one year from the filing. Such loans were optional, not committed. The filing notes that the sponsor’s trust-indemnity capacity was not independently verified.
Management said COVID-19 could adversely affect the company’s financial position, operations, or search for a target, but the impact could not be determined. Other cited risks include the lack of operating history or revenue, difficulty selecting and completing a suitable transaction, financing availability, conflicts of interest, and potential third-party claims against trust funds. No legal proceedings or off-balance-sheet arrangements were reported.
Important facts for investors to verify
- Confirm the filing issuer: this document is AMCI Acquisition Corp. II’s 10-Q, not a LanzaTech filing.
- Review the restated balance-sheet presentation and the company’s progress remediating the material weakness.
- Distinguish the $150.002 million restricted trust balance from the approximately $0.8 million available operating cash and working capital.
- Assess the deadline and redemption terms for a business combination, including the company’s lack of a selected target at quarter-end.
- Check the terms and fair-value sensitivity of warrant liabilities, the deferred underwriting fee, and any future sponsor financing.