SEC filing summary: AMCI Acquisition Corp. II (proposed LanzaTech transaction)
Reporting period: Quarter ended September 30, 2022; filed November 14, 2022. Despite the request metadata, this is AMCI Acquisition Corp. II’s 10-Q, not a post-combination filing by LanzaTech Global, Inc. AMCI was a blank-check company and had not begun operating or generating revenue.
Financial results and position
- Revenue and margins: No operating revenue; margins are not applicable.
- Net income: $1.245 million for Q3 2022, versus $469,000 in Q3 2021. For the first nine months of 2022, net income was $1.056 million; the comparable 2021 figure covers inception through September 30, 2021, not a full nine-month period, and was $468,000.
- Drivers: Q3 2022 included a $1.427 million gain from the decrease in warrant-liability fair value, $733,000 of trust-account investment income, and a $172,000 gain related to extinguished deferred underwriting commissions. These non-operating items more than offset operating and tax expenses.
- Cash flow: Operating cash used was $345,000 in the first nine months of 2022. Cash at quarter-end was $7,302, compared with $343,399 at December 31, 2021.
- Liquidity and assets: Trust investments were $150.969 million, but were subject to SPAC restrictions and not ordinary operating cash. Working capital deficit was approximately $3.5 million, excluding about $536,000 of tax obligations potentially payable from trust investment income.
- Liabilities and debt: Total liabilities were $6.060 million, including $4.317 million current liabilities, $1.543 million warrant liabilities and $200,000 deferred underwriting commissions. No borrowings were outstanding under the sponsor working-capital loan at quarter-end.
- Equity: Stockholders’ deficit was $5.099 million. All 15 million Class A shares were classified as subject to possible redemption at approximately $10.02 per share.
Material changes and significant developments
- Q3 general and administrative expense rose to $876,000 from $285,000 in Q3 2021; trust income also increased substantially, from $2,000 to $733,000. Warrant fair-value gains were similar in the two quarters.
- On September 29, 2022, Evercore resigned from transaction-related roles and waived an aggregate $13.05 million in contingent fees and expense reimbursements. The filing records approximately $4.9 million as a reduction to additional paid-in capital and $172,000 as a gain in earnings for the deferred underwriting commission waiver; the remaining waived fees were contingent on closing.
- AMCI’s proposed merger agreement would acquire LanzaTech for equity consideration valued at $1.817 billion, based on $10 per New LanzaTech share. Closing remained subject to approvals and other conditions, including at least $250 million of net cash at closing after redemptions and transaction expenses.
- The filing describes a $12.5 million-share PIPE at $10 per share and an October 18, 2022 additional 5.5 million-share subscription. It also states that investors had agreed to purchase shares for an aggregate $180 million; confirm the precise composition and status in the transaction documents.
Outlook, risks and contingencies
- AMCI had to complete a business combination by August 6, 2023 or redeem public shares and liquidate. Management said it expected to raise capital and complete a transaction by then, but acknowledged uncertainty; management concluded substantial doubt existed about AMCI’s ability to continue as a going concern.
- Failure to meet the merger’s closing conditions, including the minimum cash condition, could prevent the transaction. Redemptions, funding availability and transaction costs therefore matter to closing feasibility.
- The filing identifies uncertainty over whether the Inflation Reduction Act’s 1% excise tax could apply to redemptions or liquidation after 2022, potentially reducing available cash.
- Management reported disclosure controls were not effective at September 30, 2022 due to a material weakness involving interpretation and disclosure of an agreement. A prior weakness related to complex financial instruments was reported remediated by June 30, 2022; remediation efforts continue.
- Management noted possible COVID-19 impacts on the company’s financial position and target search, with the effect not readily determinable. The filing reports no legal proceedings and no off-balance-sheet arrangements.
Investor verification points
- Confirm the latest merger status, shareholder approvals, regulatory steps, listing conditions and closing timetable.
- Reconcile the PIPE share count and the stated $180 million aggregate commitment, and assess funding certainty against the $250 million minimum cash condition.
- Verify redemption levels, transaction expenses and the amount of cash available at closing; distinguish trust assets from operating liquidity.
- Review the Evercore resignation and fee waivers, including the contingent amounts and any replacement financial-adviser arrangements.
- Assess the material weakness, remediation progress and whether subsequent filings report changes to controls or corrections.
- Confirm the potential excise-tax treatment and the consequences if AMCI does not close a business combination before August 6, 2023.