Filing identity and business context
The supplied filing is ArcLight Clean Transition Corp. II’s unaudited Form 10-Q for the quarter ended June 30, 2021—not an OPAL Fuels Inc. filing. ArcLight was a shell company formed to pursue a business combination and had not identified a target or begun operating activities by quarter-end. It completed its IPO on March 25, 2021.
Financial results and liquidity
| Metric | Three months ended June 30, 2021 | Inception through June 30, 2021 |
|---|---|---|
| Operating revenue | None | None |
| General and administrative expenses | $394,413 | $522,889 |
| Net loss | $11.6 million | $11.9 million |
| Operating cash flow | Not separately provided | $(1.6) million |
- Quarterly net loss primarily reflected an $11.2 million noncash increase in the fair value of warrant liabilities; inception-to-date loss also included $0.5 million in warrant-related financing costs. Trust investment gains were immaterial.
- At June 30, cash was $1.2 million, prepaid expenses $1.2 million, working capital approximately $2.0 million, and trust investments $311.2 million. Total assets were $313.6 million.
- Total liabilities were $37.2 million, including $26.0 million of derivative warrant liabilities and $10.9 million of deferred underwriting commissions. Shareholders’ equity was $5.0 million; no long-term debt was reported.
- Cash flow for the inception-to-date period included $313.9 million of financing inflows, chiefly IPO and private-placement proceeds, and $311.2 million deposited into the trust account.
Changes, outlook, and risks
- There is no prior-year comparable period: the company began operations in January 2021, and the filing reports inception-to-date results as well as the second quarter. It had no operating revenue and no business-combination target disclosed.
- Management expected available working capital and possible sponsor or insider borrowing capacity to meet needs through a business combination or one year from the filing. Such additional loans were not committed; none were outstanding at June 30.
- The company had until March 25, 2023 to complete a business combination, or it would wind up and redeem public shares under the stated terms. Public shareholders may redeem shares in connection with a transaction; warrants could expire worthless if no combination is completed.
- Management said COVID-19’s specific impact was not readily determinable. The statements included no related adjustments. The filing provided no operating or earnings guidance.
- Disclosure controls were deemed ineffective at quarter-end due to a material weakness in accounting classification of certain warrants. Management reported remediation steps, including enhanced review of complex securities accounting.
- Warrant fair-value changes create potentially significant noncash earnings volatility. The company also disclosed ordinary SPAC execution, redemption, and completion-deadline risks. No legal proceedings or material changes to previously disclosed risk factors were reported.
Important facts to verify
- Confirm the filing is for ArcLight Clean Transition Corp. II, not OPAL Fuels Inc., before attributing any figures or disclosures to OPAL.
- Review the warrant accounting material weakness, remediation progress, and the effect of warrant remeasurement on reported losses.
- Verify trust-account funds, redemption terms, sponsor support availability, and the business-combination deadline against later filings.
- Check subsequent filings for any identified target, transaction terms, redemptions, or changes to liquidity and controls.