As filed with the Securities and Exchange Commission on June 14, 2021.
Registration No. 333-253107
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMCI Acquisition Corp. II
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation or organization)
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6770
(Primary Standard Industrial
Classification Code Number)
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86-1763050
(I.R.S. Employer
Identification Number)
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600 Steamboat Road
Greenwich, Connecticut 06830
Telephone: (203) 625-9200
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Nimesh Patel
Chief Executive Officer
600 Steamboat Road
Greenwich, Connecticut 06830
Telephone: (203) 625-9200
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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Elliott M. Smith
Oliver Wright
White & Case LLP
1221 Avenue of the Americas
New York, New York 10020
Tel: (212) 819-8200
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Andrew J. Pitts
Nicholas A. Dorsey
Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, New York 10019
Tel: (212) 474-1000
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Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
☒
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Smaller reporting company
☒
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Security Being Registered
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Amount Being
Registered
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Proposed
Maximum Offering
Price per Security(1)
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Proposed
Maximum Aggregate
Offering Price(1)
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Amount of
Registration Fee
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Units, each consisting of one share of Class A common stock, $0.0001 par value, and one-half of one redeemable warrant(2)
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17,250,000 Units
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$ |
10.00 |
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$ |
172,500,000 |
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$ |
18,819.75 |
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Shares of Class A common stock included as part of the units(3)
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17,250,000 Shares
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— |
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— |
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—(4) |
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Redeemable warrants included as part of the units(3)
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8,625,000 Warrants
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— |
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— |
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—(4) |
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Shares of Class A common stock underlying warrants included as part of the units
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8,625,000 Shares
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$ |
11.50(5) |
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$ |
99,187,500 |
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$ |
10,821.36 |
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Total
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$ |
271,687,500 |
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$ |
29,641.11(6) |
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(1)
Estimated solely for the purpose of calculating the registration fee.
(2)
Includes 2,250,000 units, consisting of 2,250,000 shares of Class A common stock and 1,125,000 redeemable warrants, which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.
(3)
Pursuant to Rule 416, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.
(4)
No fee pursuant to Rule 457(g).
(5)
Calculated pursuant to Rule 457(g) under the Securities Act, based on the price of the warrants.
(6)
Previously paid.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JUNE 14, 2021
PRELIMINARY PROSPECTUS
$150,000,000
AMCI Acquisition Corp. II
15,000,000 Units
AMCI Acquisition Corp. II is a blank check company whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to as our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us.
This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one share of Class A common stock and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as described herein. Only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The warrants will become exercisable 30 days after the completion of our initial business combination and will expire five years after the completion of our initial business combination or earlier upon redemption or our liquidation, as described herein. The underwriters have a 45-day option from the date of this prospectus to purchase up to 2,250,000 additional units to cover over-allotments, if any.
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account described below as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding shares of Class A common stock that were sold as part of the units in this offering, which we refer to collectively as our public shares, subject to the limitations and on the conditions described herein. If we are unable to complete our initial business combination within 24 months from the closing of this offering, we will redeem 100% of the public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions as further described herein.
Our sponsor, AMCI Sponsor II LLC has committed to purchase an aggregate of 3,500,000 private placement warrants (or 3,725,000 warrants if the underwriters’ over-allotment option is exercised in full), each exercisable to purchase one share of Class A common stock at $11.50 per share, at a price of $1.00 per warrant, or $3,500,000 in the aggregate (or $3,725,000 if the underwriters’ over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering.
Certain qualified institutional buyers or institutional accredited investors who are not affiliated with any member of our management, which we refer to as the anchor investors, have each expressed to us an interest to purchase up to 9.9% of the units in this offering (representing in the aggregate up to approximately 45% of the units in this offering) and we have agreed to direct the underwriters to sell to each of the anchor investors such number of units. For a discussion of certain additional arrangements with our anchor investors, see “Summary—The Offering—Expressions of Interest.”
Our initial stockholders currently own an aggregate of 4,312,500 shares of Class B common stock (up to 562,500 shares of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised), which will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to the adjustments described herein.
Currently, there is no public market for our units, Class A common stock or warrants. We have applied to have our units listed on The Nasdaq Capital Market, or Nasdaq, under the symbol “AMCIU” on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on Nasdaq. We expect the shares of Class A common stock and warrants comprising the units to begin separate trading on the 52nd day following the date of this prospectus unless Evercore Group L.L.C., the representative of the underwriters of this offering, informs us of their decision to allow earlier separate trading, subject to our satisfaction of certain conditions. Once the securities comprising the units begin separate trading, we expect that the Class A common stock and warrants will be listed on Nasdaq under the symbols “AMCI” and “AMCIW,” respectively.
We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 32 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.
Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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Per Unit
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Total
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Public offering price
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$ |
10.00 |
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150,000,000 |
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Underwriting discounts and commissions(1)
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$ |
0.45 |
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$ |
6,750,000 |
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Proceeds, before expenses, to us
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$ |
9.55 |
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$ |
143,250,000 |
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(1)
$0.10 per unit, or $1,500,000 in the aggregate (or $1,725,000 if the underwriters’ over-allotment option is exercised in full), is payable upon the closing of this offering. Includes $0.35 per unit, or $5,250,000 in the aggregate (or up to $6,037,500 in the aggregate if the underwriters’ over-allotment option is exercised in full) payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States and released to the underwriters only upon the completion of an initial business combination. See also “Underwriting” for a description of compensation and other items of value payable to the underwriters.
Of the proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, $150 million, or $172.5 million if the underwriters’ over-allotment option is exercised in full ($10.00 per unit in either case), will be deposited into a trust account in the United States with Continental Stock Transfer & Trust Company acting as trustee, after deducting $1,500,000 in underwriting discounts and commissions payable upon the closing of this offering (or $1,725,000 if the underwriters’ over-allotment option is exercised in full) and an aggregate of $2.0 million to pay fees and expenses in connection with the closing of this offering and for working capital following the closing of this offering.
The underwriters are offering the units for sale on a firm commitment basis. The underwriters expect to deliver the units to the purchasers on or about , 2021.
Sole Book-Running Manager
Evercore ISI
, 2021
TABLE OF CONTENTS
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1 |
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32 |
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66 |
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67 |
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70 |
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79 |
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105 |
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114 |
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118 |
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120 |
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137 |
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147 |
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152 |
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152 |
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152 |
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F-1
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We are responsible for the information contained in this prospectus. We have not authorized anyone to provide you with different information, and we take no responsibility for any other information others may give to you. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
TRADEMARKS
This prospectus contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
SUMMARY
This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.
Unless otherwise stated in this prospectus or the context otherwise requires, references to:
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“we,” “us,” “company” or “our company” are to AMCI Acquisition Corp. II, a Delaware corporation;
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“anchor investors” are to certain qualified institutional buyers, each of which has expressed to us an interest to purchase up to 9.9% of the units in this offering as further described herein;
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“DGCL” are to the Delaware General Corporation Law as the same may be amended from time to time;
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“Evercore” are to Evercore Group L.L.C., the representative of the underwriters of this offering;
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“founder shares” are to shares of Class B common stock initially purchased by our sponsor in a private placement prior to this offering and the shares of Class A common stock that will be issued upon the automatic conversion of the shares of Class B common stock at the time of our initial business combination as described herein;
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“initial stockholders” are to holders of our founder shares prior to this offering;
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“management” or our “management team” are to our executive officers and directors;
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“directors” are to our current directors and director nominees;
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“common stock” are to our Class A common stock and our Class B common stock;
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“public shares” are to shares of Class A common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market);
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“public stockholders” are to the holders of our public shares, including our initial stockholders and management team to the extent our initial stockholders and/or members of our management team purchase public shares, provided that each initial stockholder’s and member of our management team’s status as a “public stockholder” will only exist with respect to such public shares;
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“private placement warrants” are to the warrants issued to our sponsor in a private placement simultaneously with the closing of this offering;
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“SEC” are to the U.S. Securities and Exchange Commission; and
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“sponsor” are to AMCI Sponsor II LLC, a Delaware limited liability company.
Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option.
OUR COMPANY
We are a newly organized blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.
THE BUSINESS IMPERATIVE
Decarbonizing the heavy industrial complex and transitioning the global energy mix to a lower carbon footprint is critical to delivering on the aspirations of governments, corporations and citizens alike for the massive carbon emission reductions required to avoid the worst consequences of global warming. The Biden
Administration’s commitment to rejoin the Paris Agreement of 2015 provides further weight to this imperative and is likely to further accelerate investment in, and scaling of, decarbonization efforts.
The power and heavy industries are CO2 intensive and require significant energy use. The steel, cement, iron and chemicals industries alone account for over 50% of industrial energy use and 70% of direct industrial CO2 emissions. The long capital expenditure and investment cycles in heavy industries means that the timely availability of decarbonization solutions is critically important to achieving long-term sustainability targets.
Historically, the heavy industrial complex has significantly under-invested in technologies that improve productivity and, as a result, reduce the carbon intensity of a unit of production. According to a 2018 Deloitte global CIO survey, energy, resources, construction and infrastructure industries spent an average of 2% of revenue on information technology as compared to 4.6% for all other sectors. As a result, many heavy industrial companies have yet to benefit from the productivity enhancements, efficiencies and corresponding improved sustainability profile that the other sectors have from information technology solutions. We believe investments in energy transition technologies, services and products will help heavy industrial businesses improve their sustainability profile.
While we may pursue an initial business combination target in any stage of its corporate evolution or in any industry or sector, we intend to capitalize on the expertise and ability of our management team to identify and transact with a business that provides decarbonization and/or sustainability solutions to the global industrial complex.
OUR BOARD OF DIRECTORS AND MANAGEMENT
Our sponsor is an affiliate of the AMCI group of companies. Established in 1986, AMCI Group (“AMCI”) is a privately held group that invests in and operates industrial businesses focused on natural resources, transportation, infrastructure, metals and energy. AMCI has invested over $1.7 billion in 40 industrial companies with operations spanning the globe. AMCI’s existing portfolio consists of 21 companies with approximately 8,000 employees and over $6 billion in annual revenue. AMCI takes an active role in its portfolio companies and uses its extensive operational experience in managing these businesses to build equity value through organic expansion, mergers and acquisitions and operational enhancements.
We are led by our management team of Nimesh Patel and Brian Beem, who serve as our Chief Executive Officer and President, respectively. Messrs. Patel and Beem are affiliated with our sponsor, AMCI. Over the course of their careers, Messrs. Patel and Beem have developed a broad international network of contacts and corporate relationships that we believe will serve as a critical source of investment opportunities. We will seek to capitalize on the global network and the operating experience of our management team to identify, acquire and operate one or more businesses or assets that provide decarbonization and/or sustainability solutions. Given the global nature of the business, we intend to pursue transactions within the United States, Canada, Europe and Australia.
Our management team has a multi-decade history of managing a global portfolio of businesses within the heavy industrial complex. AMCI’s portfolio companies are actively seeking and deploying new solutions to reduce their carbon footprints and improve the sustainability of their operations. Furthermore, we have strong relationships with our ecosystem of partners (suppliers, logistics providers, commodity marketers, steel mills and battery manufacturers) who operate across the industrial value chain and are also working to identify and implement new solutions to decarbonize their own businesses.
Nimesh Patel has served as our Chief Executive Officer and Director since January 2021. Mr. Patel is a Managing Director, Co-head of Investments and a member of the Investment Committee for AMCI Group LLC, the holding company for the AMCI group of companies. Mr. Patel has served as a key member of AMCI’s senior management team for the past 13 years and has helped lead the investment business for AMCI. Since Mr. Patel joined the Investment Committee at AMCI, AMCI has invested $1.4 billion of its capital and approximately $0.5 billion of co-investor capital (from First Reserve Corporation, Riverstone Holdings LLC and Soros Fund Management) in 20 transactions in the global industrial, transportation and natural resources sectors. Furthermore, Mr. Patel has led the completion of multiple joint ventures with major global industrial corporations such as ITOCHU and POSCO, as well as debt and equity offerings.
Mr. Patel was an officer of AMCI Acquisition Corp, a SPAC that successfully completed a business combination with Advent Technologies, Inc. on February 4, 2021. Mr. Patel has served on the Boards of Directors or represented AMCI’s equity interests in 8 companies during his time at AMCI and continues to serve on the Boards of Conuma Resources Ltd and Ridley Terminals Inc, amongst others.
Prior to joining AMCI, Mr. Patel was with Great Hill Partners where he focused on private equity investments in the technology-enabled services companies. Previously Mr. Patel was with ChrysCapital, where he focused on private equity investments in the technology-enabled services, business process outsourcing and renewable energy sectors. Mr. Patel began his career in investment banking at Robertson Stephens, where he worked in the software group.
Mr. Patel graduated cum laude from Princeton University with an A.B. in Economics and with an M.B.A. from the Wharton School of the University of Pennsylvania.
Brian Beem has served as our President and Director since February 2021. Mr. Beem is a Managing Director, Co-head of Investments, and a member of the Investment Committee for AMCI Group LLC, the holding company for the AMCI group of companies. Mr. Beem has served as a key member of AMCI’s senior management team for the last 15 years and has helped lead the Investment business for AMCI. Since Mr. Beem joined the Investment Committee at AMCI, AMCI has invested $1.6 billion of its capital and approximately $0.7 billion of co-investor capital (from First Reserve Corporation, Riverstone Holdings LLC and Soros Fund Management LLC) in 30 privately negotiated transactions in the global industrial, transportation and natural resources sectors. In addition, Mr. Beem was an officer of AMCI Acquisition Corp, a SPAC that successfully completed a business combination with Advent Technologies, Inc. on February 4, 2021. Mr. Beem has served on the Boards of Directors of 14 companies during his time at AMCI and continues to serve on the Boards of Fitzroy QLD Resources Ltd and Jupiter Mines Ltd (ASX: JMS), amongst others. In his role overseeing investments for the AMCI Group, Mr. Beem has built a substantial global network in the industrial, mining, energy and transportation sectors.
Prior to joining AMCI, Mr. Beem worked at First Reserve Corporation, a leading private equity firm specializing in the energy industry. While at First Reserve, Mr. Beem worked on several co-investments with AMCI, including the formation of AMCI Capital L.P., an investment joint venture to which First Reserve committed $500 million and the founders of AMCI committed $300 million. Before joining First Reserve, Mr. Beem started his career at Merrill Lynch in NewYork, where he worked in the financial sponsors and energy & power groups in the investment banking division.
Mr. Beem graduated cum laude from Princeton University with an A.B. in Politics.
Patrick Murphy has served as our Chief Financial Officer since January 2021. Mr. Murphy is a Managing Director for AMCI Group LLC, the holding company for the AMCI group of companies. He is a key senior member of the investment team with responsibility for a number of AMCI portfolio investments across multiple jurisdictions. He leads AMCI’s iron ore business and its joint venture business relationships with the global industrial groups China BaoWu Steel and POSCO. Mr. Murphy represents AMCI’s interests and serves on the Boards of Directors of a number of companies including Australian Premium Iron Pty Ltd, Juno Minerals Limited and Minero Las Cenizas.
Mr. Murphy joined AMCI in 2018 after spending the previous 11 years in the global investment group at Macquarie as a Managing Director in Mining Finance, Commodities & Global Markets. Mr. Murphy specialized in deploying Macquarie’s balance sheet across the capital spectrum inclusive of passive and active equity investments, structured debt, greenfield project finance, structured derivative lending and commodity hedging. Mr. Murphy holds a Bachelor of Laws and a Bachelor of Commerce from The University of Western Australia.
Hans Mende has served on our board of directors since January 2021. Mr. Mende co-founded AMCI in 1986, with nominal capital, growing the company into a multi-billion dollar global enterprise with activities in commodity investing, operations and trading. During his career, Mr. Mende has been a member of the Board of Directors of numerous public and private natural resources companies, including Whitehaven (ASX:WHC) from 2007 to 2012, Felix Resources Limited (FLX:AX) from 2007 to 2010, Alpha Natural Resources (NYSE:ANR) from 2003 to 2007, Foundation Coal Holdings, Inc. from 2004 to 2005 and New World Resources PLC (WSE:NWR) from 2011 to 2012. In addition, Mr. Mende was the Executive Chairman
of AMCI Acquisition Corp, a SPAC that successfully completed a business combination with Advent Technologies, Inc. on February 4, 2021. Mr. Mende currently serves as director of Jupiter Mines Ltd (ASX: JMS) and Ridley Terminals Inc, amongst others.
Prior to founding AMCI Group in 1986, Mr. Mende served at Thyssen Group in various senior executive positions including President of Thyssen Carbometal Inc. from 1968 to 1986.
Mr. Mende holds an M.B.A from Cologne University in Germany. Mr. Mende is well-qualified to serve on our Board of Directors due to his extensive operational, industry and public and private company experience.
Mark Pinho will serve on our board of directors following the effectiveness of the registration statement of which this prospectus forms a part. Mr. Pinho is the Managing Partner at St. Victor Group (SVG) and a Co-Founder/Partner at 4x4 Capital. Mr. Pinho leads SVG in its focus on making longer duration, structured corporate investments in partnership with management and family owners. Mr. Pinho also currently serves as a Partner for 4x4 Capital, an operationally focused investment and management platform focused on building-long term value for middle market companies.
Prior to SVG and 4x4 Capital, Mr. Pinho was a Managing Director for twelve years in the private equity group of Soros Fund Management, a $20 billion private investment management firm serving as the principal investment advisor to funds associated with the Soros family and related charitable foundations. Prior to his time at Soros, Mr. Pinho spent four years in middle market growth equity and buyout with BCI partners and LiveWire Capital.
Mr. Pinho graduated from the University of Virginia with a B.S. from the McIntire School and earned an MBA from the Wharton School of Business at the University of Pennsylvania.
Dr. Adrian Paterson will serve on our board of directors following the effectiveness of the registration statement of which this prospectus forms a part. Dr. Paterson is the Principal and Founder of Siyeva Consulting. Prior to founding Siyeva in 2021, Dr. Paterson worked as CEO for Australia’s Nuclear Science and Technology Organization (ANSTO), one of Australia’s largest public research organizations and recognized as an international player in nuclear science and technology. During his time at ANSTO, Dr. Paterson had strategic oversight and responsibility for ANSTO’s multi-faceted portfolio of activities, including securing funding and operating the Australian Synchrotron, a major research facility serving as an innovation hub in southeast Melbourne. Dr. Paterson ensured integrated operations for the Open Pool Australian Light-Water (OPAL) Reactor at ANSTO — which provides isotopes for medical diagnosis and treatment, access to neutrons for science and irradiation services for Australian and overseas users — ultimately becoming one of the most productive reactors in its class globally.
In addition to his time at ANSTO, Dr. Paterson has experience in key policy areas as a fellow of the Australian Academy of Technology and Engineering (ATSE), Engineers Australia (EA) and the Royal Society of New South Wales.
Dr. Paterson holds a BSc in Chemistry and a PhD in Engineering, both from the University of Cape Town and an Honorary Doctor of Science from the University of Wollongong.
Jill Watz will serve on our board of directors following the effectiveness of the registration statement of which this prospectus forms a part. Ms. Watz is Managing Director of Ascian Technology Advisors, LLC, offering advisory services on business strategy, technology development, operational management and financing for early and growth-stage companies in the energy technology and natural resource sectors providing services to family offices, private equity funds, sovereign wealth funds, foundations and start-up companies. Additionally, Ms. Watz is a Senior Advisor to AltaRock Energy, a Khosla Ventures backed geothermal technology development company based in Seattle, WA and focused on bringing the next generation of advanced geothermal resources to scale.
Previously, from 2008-2014, Ms. Watz served as a Venture Partner for Vulcan Capital, a Seattle based private wealth management group with over $10 billion of assets under management, where she was responsible for investment strategy, due diligence and portfolio management in the clean technology sector. From 2006-2010, Ms. Watz served as a Climate Change Director for Vulcan, Inc., Paul G. Allen’s family
office, where she was responsible for integration of climate programs across the Vulcan portfolio including: Vulcan Real Estate, Paul G Allen Family Foundation and all related corporate affiliates. Ms. Watz served on the staff of Lawrence Livermore National Laboratory from 1994-2005 in a variety of research and management roles for science and technology development in national security, intelligence, energy and climate.
Ms. Watz has a B.S. degree in Chemical Engineering from University of California and S.M. degrees in both Civil and Environmental Engineering and Technology and Policy from Massachusetts Institute of Technology.
Kate Burson will serve on our board of directors following the effectiveness of the registration statement of which this prospectus forms a part. Ms. Burson is the Principal and Founder of KCB Advisers where she works with seed to growth stage clean technology companies (energy, mobility, and natural resource management) on growth, market development, market entry and business development strategies.
Previously, Ms. Burson worked at Tesla where she was among the first commercial hires for its energy business. Ms. Burson led market entry, policy, and business development for energy storage across the east coast. Prior to joining Tesla, Ms. Burson co-led energy policy for New York state. Ms. Burson developed and deployed a new strategy for a distributed, networked electric grid — powered by clean energy. Her initiative grew into the State’s Reforming the Energy Vision, REV, which Ms. Burson co-developed and managed.
Ms. Burson graduated magna cum laude from Vanderbilt University with a B.A. in History and earned a J.D. from Washington University in St. Louis.
AMCI also has prior experience managing and investing through special purpose acquisition companies. In June 2018, AMCI formed AMCI Acquisition Corp. (“AMCI I”), a blank check company formed for substantially the same purposes as our company. AMCI I aimed to capitalize on AMCI’s 30 years of experience in the natural resources and mining equipment, technology and services sectors. Through its initial public offering in November 2018, AMCI I raised gross proceeds of $200 million from the sale of 20 million units to public investors (the “AMCI I Units”), with each unit consisting of one share of Class A common stock of AMCI I and one warrant of AMCI I (the “AMCI I IPO”). Simultaneously with the consummation of the AMCI I IPO, AMCI I consummated the sale of 5,500,000 private placement warrants of AMCI I at a price of $1.00 per warrant ($5,500,000 in the aggregate) in a private placement to its sponsor, AMCI Sponsor LLC. On November 27, 2018, the underwriters of the AMCI I IPO (the “AMCI I Underwriters”) partially exercised their over-allotment option and purchased an additional 2,052,077 AMCI I Units, which resulted in additional gross proceeds of approximately $20.5 million. On November 27, 2018, simultaneously with the partial exercise of the AMCI I Underwriters’ over-allotment option, AMCI I consummated the sale of an additional 410,416 private placement warrants at a price of $1.00 ($410,416 in the aggregate) in a private placement with the Sponsor.
On October 12, 2020, AMCI I entered into an Agreement and Plan of Merger with Advent Technologies, Inc. (“Advent”), an innovation-driven company in the fuel cell and hydrogen technology space, pursuant to which, on February 4, 2021, a newly formed Delaware subsidiary of AMCI I merged with and into Advent, with Advent continuing as the surviving corporation and a wholly-owned subsidiary of AMCI I (the “Merger”). In connection with the Merger, AMCI I raised approximately $65 million through a private placement of shares of its Class A common stock at a price of $10.00 per share. Upon the consummation of the Merger, AMCI I was renamed Advent Technologies Holdings, Inc., and its common stock and warrants began trading on Nasdaq under the symbols “ADN” and “ADNW”, respectively.
We believe the combination of these factors and our team’s deep understanding of the challenges facing the global industrial complex, as well as considerable time spent navigating the complex regulatory environment in which they operate, provides us with a significant competitive advantage to identify and evaluate investment opportunities to decarbonize this industry.
With respect to the foregoing experience of our management team, including with respect to AMCI I, past performance is not a guarantee (i) that we will be able to identify a suitable candidate for our initial business combination, or (ii) of success with respect to any business combination we may consummate. You
should not rely on the historical record of our management team’s performance as indicative of our future performance. See the section of this prospectus entitled “Management” for a more complete description of our team’s experience.
MARKET OPPORTUNITY
We believe that the current backdrop for investing in sustainability and decarbonization presents a compelling opportunity set for the company. Over the past few years, we believe that there has been an increasing global focus on sustainability that is creating attractive and scalable commercial opportunities across many sectors, including clean energy and power, transportation, resource management, environmental services, other heavy industries and technology enabled sustainable solutions. As governments, corporations and investors have announced emissions targets in recent years, the amount of capital required to achieve these targets represents a step-change increase in capital investment levels across a wide range of subsectors and will lead to attractive investment opportunities centered around the themes of sustainability, decarbonization and energy transition.
Given the scale and difficulty of the challenge, we believe that companies that can provide creative solutions to the problems of decarbonization and sustainability in heavy industry will earn attractive returns over a long period of time. We believe that our management team is well positioned to access and identify such companies because of its experience and network in the global industrial economy.
We believe the opportunity in decarbonation and sustainability solutions is now being made possible by a confluence of favorable trends:
1.
Increasingly widespread commitment to decarbonization and sustainability is driving demand for solutions:
•
Demand for decarbonization solutions has been growing due to government targets to achieve net-zero carbon emissions. In fact, countries now accounting for more than 60% of global carbon emissions have expressed ambitions targeting net-zero carbon emissions by the middle of this century. As a result, national and local governments are legislating a myriad of public policies to help achieve long-term emissions objectives. One such policy was announced on September 23, 2020, when the Governor of the State of California signed Executive Order N-79-20, ordering that it is a goal of the State of California that by 2035 all new passenger cars and trucks sold in the state will be zero-emission vehicles. Southern California Edison estimates that from 2030 to 2045, grid investments of up to $75 billion will be required, in part, to serve the load growth associated with transportation and building electrification.
•
As of February 2021, over 1,500 companies globally, with a combined market capitalization of approximately $25 trillion, have already announced long-term commitments and bold actions to accelerate the net-zero carbon goal across their business operations and, in many cases, across their third-party supply chains. As a result of this widespread commitment to sustainability, we expect to see global companies of all sizes increase the size, speed and scope of their initiatives to decarbonize and improve the sustainability of their businesses.
2.
Recognition that significant incremental capital will need to be invested in infrastructure and technology to keep pace with demand:
•
With respect to the infrastructure supporting energy transition, even as renewables in Europe generated more electricity than fossil fuels in 2020, the European Green Deal requires 100 terawatt-hours (“TWh”) of annual additions of renewables, which is double the deployment speed seen in 2020. The International Energy Agency (the “IEA”) has estimated that approximately $59 trillion of capital would need to be invested through 2070 and the Intergovernmental Panel on Climate Change (the “IPCC”) estimates that annual investments in clean energy and energy efficiency would need to increase six times by 2050 compared to 2015 to adhere to the Paris Agreement of 2015 and the 2-degrees scenario, which aims to limit global warming to 2 degrees Celsius by 2100 from pre-industrial levels, with annual investments of $3.0 trillion needed through 2035.
•
Significant investments in technology that can be deployed at scale and at reduced costs versus incumbent processes are quickly becoming the norm in traditionally carbon intensive industries. For
example, on November 19, 2020, General Motors Co. announced a commitment to invest more than $27 billion in electric and autonomous vehicle development, a significant portion of which will be used to reduce the cost of its electric vehicle batteries by 60% and double their energy capacity, allowing General Motors Co. to make electric vehicles more widely affordable and convenient for consumers in the transportation end market. On January 28th, General Motors Co. announced they would completely globally phase out internal combustion engines from their portfolio by 2035.
3.
Near-term advancements in innovation and the maturation of technology are providing attractive investment opportunities for investors:
•
As demand for new solutions continues to outpace the rate of technology innovation and maturation, we believe that businesses that provide real solutions have the potential to yield significant returns for stockholders. For example, as measured by the IEA, as of October 2020, major renewable energy equities outperformed the energy sector on the whole as well as numerous various major international stock market indices.
The market for sustainability solutions remains fragmented, and we believe appropriate capital investments can accelerate technology maturation and create significant growth opportunities for businesses in the space. According to industry source Pitchbook, there were over 21,500 companies operating in the broadly defined sustainability industry as of February 2021. Furthermore, this fragmentation suggests there are a substantial number of actionable opportunities with the required scale that fit our acquisition criteria.
BUSINESS STRATEGY
Our acquisition and value creation strategy will be to identify, acquire and, after our initial business combination, build a company that provides sustainability, energy transition and/or decarbonization solutions to the industrial complex. To date, energy transition focused investments have been mostly centered on electricity conversions or substitutions from coal, oil and natural gas to renewables, principally wind and solar, and the transition from internal combustion engines to electric vehicles. AMCI believes that the addressable universe to improve sustainability and decarbonization of the global industrial complex must extend beyond electricity and personal transportation.
In addition to the need to decarbonize, the legacy global industrial complex remains under-invested in the application of digitization and efficiency to industrial processes or supply chains. The adaptation of these technologies will provide enormous improvement potential in the carbon emissions profile, the sustainability of the global economy as well as profitability to stakeholders in the global industrial economy.
Our acquisition strategy will leverage AMCI’s network of proprietary and public transaction sources where we believe a combination of our relationships, knowledge and experience in heavy industries could effect a positive transformation or augmentation of existing businesses or properties. We will seek an opportunity in which our capital and involvement can promptly improve a target company’s growth trajectory. Our goal is to build a focused business with a clear value proposition and competitive advantages in a growing market to generate attractive returns for our investors.
We plan to utilize the network and industry experience of our management team and AMCI in seeking an initial business combination and employing our acquisition strategy. In addition to industry and lending community relationships, we plan to leverage relationships with management teams of public and private companies, investment bankers, venture capitalists and growth private equity investors, which we believe should provide us with numerous business combination opportunities. Upon the consummation of this offering, members of our management team and AMCI will communicate with their networks of relationships to articulate the parameters of our search for a target business and a potential business combination and begin the process of pursuing and reviewing potential leads.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, executive officers or directors, or completing the business combination through a joint venture or other form of shared ownership with our sponsor, executive officers or directors. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an
independent investment banking firm which is a member of FINRA or a valuation or appraisal firm stating that such an initial business combination is fair to our company from a financial point of view.
Members of our management team and our independent directors will directly or indirectly own founder shares and/or private placement warrants following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such other entity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.
In addition, our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
INITIAL BUSINESS COMBINATION
Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the net assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of signing a definitive agreement in connection with our initial business combination. We refer to this as the 80% of net assets test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, with respect to the satisfaction of such criteria. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of the 80% of net assets test described above. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.
Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
CORPORATE INFORMATION
Our executive offices are located at 600 Steamboat Road, Greenwich, Connecticut 06830, and our telephone number is (203) 625-9200.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” will have the meaning associated with it in the JOBS Act.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates equals or exceeds $250 million as of the prior June 30th, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates equals to or exceeds $700 million as of the prior June 30th.
THE OFFERING
In making your decision on whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled “Risk Factors” in this prospectus.
15,000,000 units, at $10.00 per unit, each unit consisting of:
•
one share of Class A common stock; and
•
one-half of one redeemable warrant.
Units: “AMCIU”
Class A common stock: “AMCI”
Warrants: “AMCIW”
Trading commencement and separation of shares of Class A common stock and warrants
The units are expected to begin trading on or promptly after the date of this prospectus. The shares of Class A common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless the representative informs us of their decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Class A common stock and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant.
Separate trading of the Class A common stock and warrants is prohibited until we have filed a Current Report on Form 8-K
In no event will the Class A common stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering, which closing is anticipated to take place three business days from the date of this prospectus. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.
Units:
Number outstanding before this offering
0
Number outstanding after this
offering
15,000,000(1)
Common stock:
Number outstanding before this offering
4,312,500(2)(3)
Number outstanding after this
offering
18,750,000(1)(3)(4)
Warrants:
Number of private placement warrants to be sold in a private placement simultaneously with this offering
3,500,000(1)
Number of warrants to be outstanding after this offering and the private placement
11,000,000(1)
Each whole warrant offered in this offering is exercisable to purchase one share of Class A common stock. Only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade.
We structured each unit to contain one-half of one warrant, with each whole warrant exercisable for one share of Class A common stock in order to reduce the dilutive effect of the warrants upon completion of a business combination as compared to units that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses.
$11.50 per share, subject to adjustments as described herein. In addition, if (x) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our initial stockholders or their affiliates, without taking into account any founder shares held by our initial stockholders
(1)
Assumes no exercise of the underwriters’ over-allotment option and the forfeiture of 562,500 founder shares by our initial stockholders for no consideration.
(2)
Includes up to 562,500 founder shares that will be forfeited by our initial stockholders depending on the extent to which the underwriters’ over-allotment option is exercised.
(3)
Founder shares are currently classified as shares of Class B common stock, which shares will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment as described below adjacent to the caption “Founder shares conversion and anti-dilution rights.”
(4)
Includes 15,000,000 public shares and 3,750,000 founder shares.
or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our Class A common stock during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described adjacent to “Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described adjacent to the caption “Redemption of warrants when the price per share of Class A common Stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable 30 days after the completion of our initial business combination; provided that we have an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement). If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
We have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our best efforts to file a post-effective amendment to the registration statement of which this prospectus forms a part or a new registration statement with the SEC and have an effective registration statement covering the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis”
in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if our shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account.
Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00
Once the warrants become exercisable, we may redeem the outstanding warrants for cash:
in whole and not in part;
at a price of $0.01 per warrant;
upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the 30-day redemption period; and
if, and only if, the closing price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders.
We will not redeem the warrants as described above unless an effective registration statement under the Securities Act covering the Class A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Class A common stock is available throughout the 30-day redemption period. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state laws.
Redemption of warrants for when the price per share of Class A common stock equals or exceeds $10.00
Once the warrants become exercisable, we may redeem the outstanding warrants:
in whole and not in part;
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table set forth under “Description of Securities — Warrants — Public Stockholders’ Warrants” based on the redemption date and the “fair market value” (as defined below) of our Class A common stock except as otherwise described in “Description of Securities — Warrants — Public Stockholders’ Warrants”; and
if, and only if, the closing price of our Class A common stock equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”) for any 20 trading days within the 30-trading day period ending three trading days before we send notice of redemption to the warrant holders.
The “fair market value” of our Class A common stock shall mean the volume weighted average price of our Class A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. This redemption feature differs from the typical warrant redemption features used in other blank check offerings. We will provide our warrant holders with the final fair market value no later than one business day after the 10 trading day period described above ends. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of Class A common stock per warrant (subject to adjustment).
No fractional shares of Class A common stock will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of shares of Class A common stock to be issued to the holder. Please see the section entitled “Description of Securities — Warrants — Public Stockholders’ Warrants” for additional information.
On January 29, 2021, our sponsor subscribed for an aggregate 5,031,250 founder shares for a total subscription price of $25,000, or approximately $0.005 per share. Such shares are fully paid, and the cash amount of the subscription price therefor was received on January 29, 2021. In March 2021, our sponsor transferred all of the founder shares held by it to members of our board of directors, our management team and persons or entities affiliated with AMCI Group. On May 14, 2021, certain of our initial stockholders forfeited an aggregate of 718,750 founder shares, resulting in an aggregate of 4,312,500 founder shares outstanding. Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The per share price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of
founder shares issued. The number of founder shares outstanding was determined based on the expectation that the total size of this offering would be a maximum of 17,250,000 units if the underwriters’ over-allotment option is exercised in full, and therefore that such founder shares would represent 20% of the outstanding shares after this offering. Up to 562,500 of the founder shares will be forfeited depending on the extent to which the underwriters’ over-allotment option is not exercised. If we increase or decrease the size of the offering pursuant to Rule 462(b) under the Securities Act, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of founder shares by our initial stockholders, on an as-converted basis, at 20.0% of our issued and outstanding common stock upon the consummation of this offering.
The founder shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that:
•
the founder shares are subject to certain transfer restrictions, as described in more detail below;
•
the founder shares are entitled to registration rights;
•
our initial stockholders, sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to (i) waive their redemption rights with respect to any founder shares and public shares they hold in connection with the completion of our initial business combination, (ii) waive their redemption rights with respect to any founder shares and public shares they hold in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity and (iii) waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering or any extended period of time that we may have to consummate an initial business combination as a result of an amendment to our amended and restated certificate of incorporation (an “Extension Period”) (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame). If we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or
after this offering in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need 5,625,001 or 37.5%, of the 15,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised); and
•
the founder shares are automatically convertible into our Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described below adjacent to the caption “Founder shares conversion and anti-dilution rights.”
Transfer restrictions on founder
shares
Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (i) one year after the completion of our initial business combination and (ii) the date on which we complete a liquidation, merger, capital stock exchange or other similar transaction after our initial business combination that results in all of our stockholders having the right to exchange their Class A common stock for cash, securities or other property; except to certain permitted transferees and under certain circumstances as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants.” Any permitted transferees will be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up. Notwithstanding the foregoing, if (1) the closing price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (2) if we consummate a transaction after our initial business combination which results in our stockholders having the right to exchange their shares for cash, securities or other property, the founder shares will be released from the lock-up.
Founder shares conversion and anti-dilution rights
The founder shares will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with our initial business combination, the number of shares of Class A common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted
basis, 20% of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by public stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of founder shares will never occur on a less than one-for-one basis.
Holders of record of our Class A common stock and holders of record of our Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders, with each share of common stock entitling the holder to one vote except as required by law.
Private placement warrants
Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 3,500,000 private placement warrants (or 3,725,000 warrants if the underwriters’ over-allotment option is exercised in full), each exercisable to purchase one share of Class A common stock at $11.50 per share, at a price of $1.00 per warrant, or $3,500,000 in the aggregate (or $3,725,000 if the underwriters’ over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. A portion of the purchase price of the private placement warrants will be added to the proceeds from this offering to be held in the trust account such that at the time of closing of this offering $150 million (or $172.5 million if the underwriters exercise their over-allotment option in full) will be held in the trust account. If we do not complete our initial business combination within 24 months from the closing of this offering, the private placement warrants will expire worthless. The private placement warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by their initial purchasers or their permitted transferees. If the private placement warrants are held by holders other than their initial purchasers or their permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.
Transfer restrictions on private placement warrants
The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination, except as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants.”
Our anchor investors have each expressed to us an interest to purchase an aggregate of approximately 45% of the shares in this offering at the offering price and we have agreed to direct the underwriters to sell to the anchor investors such amount of shares. The shares that may be purchased by our anchor investors in this offering will not be subject to any lock-up provisions. At the closing of our initial business combination, the anchor investors will be entitled to purchase from our initial stockholders approximately 334,500 of their founder shares, at a purchase price of approximately $0.005 per share. However, each anchor investor has agreed that if such anchor investor does not purchase the amount for which they expressed an interest, it will forfeit its right to purchase founder shares.
There can be no assurances that any of the anchor investors will acquire any units in this offering, or as to the amount of such units the anchor investors will retain, if any, prior to or upon the consummation of our initial business combination. In the event that the anchor investors purchase such units (either in this offering or after) and vote them in favor of our initial business combination, a smaller portion of affirmative votes from other public stockholders would be required to approve our initial business combination. The anchor investors have no agreement with us or the sponsor with respect to voting in favor of our initial business combination. If the anchor investors each elect to purchase the amounts for which they expressed an interest in this offering, such stockholders will own approximately 45% of the units sold in this offering. Our sponsor and the anchor investors will own collectively approximately 56% of the outstanding common stock.
Cashless exercise of private placement warrants
If holders of private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “Sponsor fair market value” (defined below) over the exercise price of the warrants by (y) the Sponsor fair market value. The “Sponsor fair market value” shall mean the average reported closing price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless basis so long as they are held by the sponsor or its permitted transferees is because it is not known at this time whether they will be affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that restrict insiders from selling our securities except during specific periods.
Proceeds to be held in trust account
Nasdaq rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants
be deposited in a trust account. Of the proceeds we will receive from this offering and the sale of the private placement warrants described in this prospectus, $150 million, or $172.5 million if the underwriters’ over-allotment option is exercised in full ($10.00 per unit in either case), will be deposited into a segregated trust account located in the United States at JP Morgan Chase Bank, N.A. with Continental Stock Transfer & Trust Company acting as trustee, after deducting $1,500,000 in underwriting discounts and commissions payable upon the closing of this offering (or $1,725,000 if the underwriters’ over-allotment option is exercised in full) and an aggregate of $2.0 million to pay fees and expenses in connection with the closing of this offering and for working capital following the closing of this offering. The proceeds to be placed in the trust account include $5,250,000 (or up to $6,037,500 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions.
Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes, the proceeds from this offering and the sale of the private placement warrants will not be released from the trust account until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we are unable to complete our initial business combination within 24 months from the closing of this offering, subject to applicable law, and (iii) the redemption of our public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
Anticipated expenses and funding sources
Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except the withdrawal of interest to pay our taxes and/or to redeem our public shares in connection with an amendment to our amended and restated certificate of incorporation, as described above. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. We estimate the interest earned on the trust account will be approximately $750,000 per year, assuming an interest rate of 0.5% per year; however we can provide no assurances regarding this amount. Unless and until we complete our initial business combination, we may pay our expenses only from such interest withdrawn from the trust account and:
•
the net proceeds of this offering and the sale of the private placement warrants not held in the trust account, which initially will be approximately $1,000,000 in working capital after the payment of approximately $1,000,000 in expenses relating to this offering; and
•
any loans or additional investments from our sponsor, members of our management team or their affiliates or other third parties, although they are under no obligation to advance funds or invest in us, and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into private placement warrants, at a price of $1.00 per warrant, at the option of the lender.
Conditions to completing our initial business combination
Nasdaq rules require that we must consummate an initial business combination with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting commissions). Our board of directors will make the determination as to the fair market value of our initial business combination. If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of the target’s assets or prospects. We will complete our initial business combination only if the post-transaction company in which our public stockholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock or shares of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business
combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of the 80% of net assets test described above, provided that in the event that the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as our initial business combination for purposes of a seeking stockholder approval or conducting a tender offer, as applicable.
Permitted purchases of public shares and public warrants by our
affiliates
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds held in the trust account will be used to purchase shares or public warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. We expect any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. See “Proposed Business — Permitted purchases of our securities” for a description of how our sponsor, initial stockholders, directors, executive officers, advisors or any of their affiliates will select which stockholders to purchase securities from in any private transaction.
The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum
net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our Class A common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Redemption rights for public stockholders upon completion of our initial business combination
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations and on the conditions described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial stockholders, sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares they hold and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination.
Manner of conducting redemptions
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the business combination or (ii) without a stockholder vote by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and share purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where
we issue more than 20% of our outstanding Class A common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. So long as we obtain and maintain a listing for our securities on Nasdaq we will be required to comply with Nasdaq’s stockholder approval rules.
The requirement that we provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above will be contained in provisions of our amended and restated certificate of incorporation and will apply whether or not we maintain our registration under the Exchange Act or our listing on Nasdaq. Such provisions may be amended if approved by holders of 65% of our common stock entitled to vote thereon.
If we provide our public stockholders with the opportunity to redeem their public shares in connection with a stockholder meeting, we will:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and
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file proxy materials with the SEC.
If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the Company representing a majority of the voting power of all outstanding shares of capital stock of the Company entitled to vote at such meeting. Our initial stockholders will count towards this quorum and, pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote any founder shares they hold and any public shares purchased during or after this offering (including in open market and privately-negotiated transactions) in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares, we would need 5,625,001 or 37.5%, of the 15,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction or whether they were a stockholder on the record date for the stockholder meeting held to approve the proposed transaction.
If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than the number of public shares we are permitted to redeem. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act.
We intend to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to, at the holder’s option, either deliver their stock certificates to our transfer agent or deliver their shares to our transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system, prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days prior to the date on which the vote on the proposal to approve the initial business combination is to be held. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is included. The proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or action from the redeeming public stockholders, which could
delay redemptions and result in additional administrative cost. If the proposed initial business combination is not approved and we continue to search for a target company, we will promptly return any certificates or shares delivered by public stockholders who elected to redeem their shares.
Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares in connection with such initial business combination, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements we may enter into following consummation of this offering, in order to, among other reasons, satisfy such net tangible assets or minimum cash requirements.
Limitation on redemption rights of stockholders holding 15% or more of the shares sold in this offering if we hold stockholder vote
Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, without our prior consent. We believe the restriction described above will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us, our sponsor or our management at a
premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination.
Release of funds in trust account on closing of our initial business combination
On the completion of our initial business combination, the funds held in the trust account will be used to pay amounts due to any public stockholders who exercise their redemption rights as described above under “Redemption rights for public stockholders upon completion of our initial business combination,” to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
Redemption of public shares and distribution and liquidation if no initial business combination
Our amended and restated certificate of incorporation provides that we will have only 24 months from the closing of this offering to complete our initial business combination or during any Extension Period. If we are unable to complete our initial business combination within such 24-month period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further
liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject, in each case, to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 24-month time period.
Our initial stockholders have entered into agreements with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 24 months from the closing of this offering or during any Extension Period. However, if our initial stockholders or management team acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted 24-month time frame.
The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination within 24 months from the closing of this offering or during any Extension Period and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.
Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described above under “Limitations on redemptions.” For example, our board of directors may propose such an amendment if it determines that additional time is necessary to complete our initial business combination. In such event, we will conduct a proxy solicitation and distribute proxy materials pursuant to Regulation 14A of the Exchange Act seeking stockholder approval of such proposal, and in connection therewith, provide our public stockholders with the redemption rights described above upon stockholder approval of such amendment.
Limited payments to insiders
There will be no finder’s fees, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation paid by us to our sponsor, officers or directors, or any affiliate of our sponsor or officers prior to, or in connection with any services rendered in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is). However, the following payments will be made to our sponsor, officers or directors, or our or their affiliates, and, if made prior to our initial business combination will be made from funds held outside the trust account.
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Repayment of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
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Payment to our sponsor of $10,000 per month for office space, secretarial and administrative services provided to members of our management team;
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Reimbursement for any out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial business combination; and
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Repayment of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Except for the foregoing, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans.
We will establish and maintain an audit committee. Among its responsibilities, the audit committee will review on a quarterly basis all payments that were made to our sponsor, officers or directors, or our or their affiliates and monitor compliance with the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to promptly take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section entitled “Management — Committees of the Board of Directors — Audit Committee.”
SUMMARY FINANCIAL DATA
The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, so only balance sheet data is presented.
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March 31, 2021
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Actual
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As Adjusted
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Balance Sheet Data:
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Working (deficiency) capital(1)
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$ |
(93,208) |
|
|
|
|
$ |
136,014,736 |
|
|
|
Total assets(2)
|
|
|
|
|
117,956 |
|
|
|
|
|
151,023,874 |
|
|
|
Total liabilities(3)
|
|
|
|
|
94,082 |
|
|
|
|
|
15,009,138 |
|
|
|
Value of common stock subject to possible conversion/tender(4)
|
|
|
|
|
— |
|
|
|
|
|
131,014,730 |
|
|
|
Stockholders’ (deficit) equity(5)
|
|
|
|
|
23,874 |
|
|
|
|
|
5,000,006 |
|
|
(1)
The “as adjusted” calculation includes $150,000,000 cash held in trust from the proceeds of this offering and the sale of the private placement warrants, plus $1,000,000 of cash held outside the trust account, plus $23,874 of actual stockholder’s equity at March 31, 2021, minus $15,009,138 of deferred underwriting commissions and warrant liabilities, assuming the over-allotment option is not exercised.
(2)
The “as adjusted” calculation equals $150,000,000 cash held in trust from the proceeds of this offering and the sale of the private placement warrants, plus $1,000,000 of cash held outside the trust account, plus $23,874 of actual stockholder’s equity at March 31, 2021.
(3)
The “as adjusted” calculation equals $5,250,000 of deferred underwriting commissions and $9,759,138 of warrant liabilities, assuming the over-allotment option is not exercised.
(4)
The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the “as adjusted” stockholders’ equity, which is set to approximate the minimum net tangible assets threshold of at least $5,000,001.
(5)
Excludes 13,101,473 shares of common stock purchased in the public market which are subject to conversion in connection with our initial business combination. The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the value of shares of common stock that may be converted in connection with our initial business combination ($10.00 per share)
The “as adjusted” information gives effect to the sale of the units we are offering, and the sale of the private placement warrants, including the payment of the estimated costs of the offering from such sales and the repayment of the accrued and other liabilities required to be repaid.
The “as adjusted” working capital and total assets amounts include the $150,000,000 to be held in the trust account, which, except for limited situations described in this prospectus, will be available to us only upon the consummation of a business combination within the time period described in this prospectus. If a business combination is not so consummated, the trust account, less amounts we are permitted to withdraw from interest earned on the funds in the trust account as described in this prospectus, will be distributed solely to our public stockholders (subject to our obligations under Delaware law to provide for claims of creditors).
We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 immediately prior to or upon consummation of such business combination and, solely if we seek stockholder approval, a majority of the outstanding shares of common stock voted are voted in favor of the business combination.
RISKS
Summary of Risk Factors
An investment in our securities involves a high degree of risk. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition and operating results. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Such risks include, but are not limited to:
•
We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
•
Our public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.
•
Your only opportunity to effect your investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
•
If we seek stockholder approval of our initial business combination, our initial stockholders and management team have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.
•
The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
•
The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
•
The requirement that we complete our initial business combination within 24 months after the closing of this offering may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.
•
The coronavirus, or COVID-19, pandemic, including the efforts to mitigate its impact, has and may continue to have a material adverse effect on our search for a business combination, as well as any target business with which we ultimately consummate a business combination.
•
If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or their affiliates may elect to purchase shares or warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our securities.
•
If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for submitting or tendering its shares, such shares may not be redeemed.
•
The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.
•
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
•
Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
•
You will not be entitled to protections normally afforded to investors of many other blank check companies.
•
Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their shares, and our warrants will expire worthless.
•
If the net proceeds of this offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for at least the 24 months following the closing of this offering, it could limit the amount of cash available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial business combination.
•
Past performance by our management team and their affiliates, including investments and transactions in which they have participated and businesses with which they have been associated, may not be indicative of future performance of an investment in the company.
•
Unlike some other similarly structured special purpose acquisition companies, our initial stockholders will receive additional shares of Class A common stock if we issue certain shares to consummate an initial business combination.
RISK FACTORS
An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this prospectus, before making a decision to invest in our units. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
Risks Relating to our Search for, and Consummation of or Inability to Consummate, a Business Combination
Our stockholders may not be afforded an opportunity to vote on our proposed initial business combination, and even if we hold a vote, holders of our founder shares will participate in such vote, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.
We may choose not to hold a stockholder vote to approve our initial business combination if the business combination would not require stockholder approval under applicable law or stock exchange listing requirement. Except for as required by applicable law or stock exchange requirement, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Even if we seek stockholder approval, the holders of our founder shares will participate in the vote on such approval. Accordingly, we may complete our initial business combination even if a majority of our public stockholders do not approve of the business combination we complete. Please see the section entitled “Proposed Business — Stockholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.
If we seek stockholder approval of our initial business combination, our initial stockholders and management team have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.
Our initial stockholders will own 20% of our outstanding common stock immediately following the completion of this offering. Our initial stockholders and management team also may from time to time purchase Class A common stock prior to our initial business combination. Our amended and restated certificate of incorporation provides that, if we seek stockholder approval of an initial business combination, such initial business combination will be approved if we receive the affirmative vote of a majority of the shares voted at such meeting, including the founder shares. As a result, in addition to our initial stockholders’ founder shares, we would need 5,625,001 or 37.5%, of the 15,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). Accordingly, if we seek stockholder approval of our initial business combination, the agreement by our initial stockholders and management team to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite stockholder approval for such initial business combination.
Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination. Since our board of directors may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination, unless we seek such stockholder vote. Accordingly, your only opportunity to affect the investment decision regarding our initial business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.
The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination transaction agreement with minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or make us unable to satisfy a minimum cash condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
At the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B common stock results in the issues of shares of Class A common stock on a greater than one-to-one basis upon conversion of the shares of Class B common stock at the time of our initial business combination. In addition, the amount of the deferred underwriting commissions payable to the representative of the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business combination. The per share amount we will distribute to stockholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure.
The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with your exercise of redemption rights until we liquidate or you are able to sell your shares in the open market.
The requirement that we complete our initial business combination within 24 months after the closing of this offering may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.
Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within 24 months from the closing of this offering. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
The coronavirus, or COVID-19, pandemic, including the efforts to mitigate its impact, has and may continue to have a material adverse effect on our search for a business combination, as well as any target business with which we ultimately consummate a business combination.
The COVID-19 pandemic, including efforts to combat it, has and may continue to adversely affect our search for a business combination. In addition, the outbreak of COVID-19 has resulted in a widespread health crisis that has and may continue to adversely affect the economies and financial markets worldwide. As such, the business of any potential target business with which we may consummate a business combination could be materially and adversely affected.
In response to the pandemic, public health authorities and local, national and international governments have implemented measures that may directly or indirectly impact our ability to search for and acquire any target business, including measures such as voluntary or mandatory quarantines, restrictions on travel and orders to limit the activities of non-essential workforce personnel. We may be unable to complete a business combination if concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner.
The extent to which COVID-19 impacts our search for a target business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 pandemic and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extended period, it could have a material adverse effect on our ability to complete a business combination, or the operations of a target business with which we ultimately complete a business combination. In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing, which may be impacted by COVID-19 and other events, including as a result of increased market volatility or decreased market liquidity in third-party financing being unavailable on terms acceptable to us or at all.
We may not be able to complete our initial business combination within 24 months after the closing of this offering, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
We may not be able to find a suitable target business and complete our initial business combination within 24 months after the closing of this offering. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. If we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further
liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case, to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
If we seek stockholder approval of our initial business combination, our sponsor, initial stockholders, directors, executive officers, advisors and their affiliates may elect to purchase shares or public warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A common stock.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or public warrants in such transactions. Such purchases may include a contractual acknowledgment that such stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.
In the event that our sponsor, initial stockholders, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. We expect any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. See “Proposed Business — Permitted Purchases of Our Securities” for a description of how our sponsor, directors, executive officers, advisors or any of their affiliates will select which stockholders to purchase securities from in any private transaction.
In addition, if such purchases are made, the public “float” of our Class A common stock or public warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities exchange.
If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a stockholder fails to receive our proxy materials or tender offer documents, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or submit public shares for redemption. For example, we intend to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to, at the holder’s option, either deliver their stock certificates to our transfer agent, or to deliver their shares to
our transfer agent electronically prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days prior to the vote on the proposal to approve the initial business combination. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is included. In the event that a stockholder fails to comply with these or any other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed. See the section of this prospectus entitled “Proposed Business — Submitting Stock Certificates in Connection with Redemption Rights.”
You will not be entitled to protections normally afforded to investors of many other blank check companies.
Since the net proceeds of this offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed to be a “blank check” company under the United States securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the completion of this offering and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”
If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A common stock.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in this offering without our prior consent, which we refer to as the “Excess Shares.” However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.
Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.
We expect to encounter competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services
to various industries. Many of these competitors possess similar or greater technical, human and other resources to ours or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction with a stockholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we are unable to complete our initial business combination, our public stockholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.
If the net proceeds of this offering not being held in the trust account are insufficient to allow us to operate for at least the 24 months following the closing of the offering, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial business combination.
Of the net proceeds of this offering, only $1,000,000 will be available to us initially outside the trust account to fund our working capital requirements. We believe that, upon closing of this offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for at least the 24 months following such closing; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. The amount held in the trust account will not be impacted as a result of such increase or decrease. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public stockholders may only receive an estimated $10.00 per share, or possibly less, on our redemption of our public shares, and our warrants will expire worthless.
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share.
Our placing of funds in the trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors, service providers, prospective target businesses and other entities
(except for our Independent Registered Public Accounting Firm) with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will consider whether competitive alternatives are reasonably available to us and will only enter into an agreement with such third party if management believes that such third party’s engagement would be in the best interests of the company under the circumstances. The underwriters of this offering as well as our registered independent public accounting firm will not execute agreements with us waiving such claims to the monies held in the trust account.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors. Pursuant to the letter agreement the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case less taxes payable, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce
its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.
If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, by paying public stockholders from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.
If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities,
each of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed upon us burdensome requirements, including:
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registration as an investment company with the SEC;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are not subject to.
In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long
term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering; and (iii) absent an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we are unable to complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations.
Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the closing of this offering may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon
as reasonably possible following the 24th month from the closing of this offering in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures.
Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the closing of this offering is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.
We may not hold an annual meeting of stockholders until after the consummation of our initial business combination, which could delay the opportunity for our stockholders to elect directors.
In accordance with Nasdaq’s corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
Because we are neither limited to evaluating a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
Our efforts to identify a prospective initial business combination target will not be limited to a particular industry, sector or geographic region. Our amended and restated certificate of incorporation prohibits us from effectuating a business combination with another blank check company or similar company with nominal operations. Because we have not yet selected any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also
cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders or warrant holders who choose to remain stockholders or warrant holders following the business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy materials or tender offer documents, as applicable, relating to the business combination contained an actionable material misstatement or material omission.
Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.
We may seek business combination opportunities with a financially unstable business or an entity lacking an established record of revenue, cash flow or earnings, which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel.
To the extent we complete our initial business combination with an early stage company, a financially unstable business or an entity lacking an established record of revenues or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include investing in a business without a proven business model or with limited historic financial data, volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel. Some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain an opinion from an independent investment banking firm or from a valuation or appraisal firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our stockholders from a financial point of view.
Unless we complete our initial business combination with an affiliated entity or our board of directors cannot independently determine the fair market value of the target business or businesses (including with the assistance of financial advisors), we are not required to obtain an opinion from an independent investment banking firm which is a member of FINRA or from a valuation or appraisal firm that the price we are paying is fair to our stockholders from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy materials or tender offer documents, as applicable, related to our initial business combination.
Resources could be wasted in researching business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.
We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.
We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.
Although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt following this offering, we may choose to incur substantial debt to complete our initial business combination. We and our officers have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
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our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
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our inability to pay dividends on our Class A common stock;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
We may only be able to complete one business combination with the proceeds of this offering and the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.
The net proceeds from this offering and the private placement of warrants will provide us with $144,750,000 (or $166,462,500 if the underwriters’ over-allotment option is exercised in full) that we may use to complete our initial business combination (after taking into account the $5,250,000, or up to $6.037,500 if the over-allotment option is exercised in full, of deferred underwriting commissions being held in the trust account).
We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset, or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
In pursuing our business combination strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our stockholders or warrant holders do not agree.
Our amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would
cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares in connection with such initial business combination, all shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that will make it easier for us to complete our initial business combination that our stockholders may not support.
In order to effectuate a business combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and governing instruments, including their warrant agreements. For example, special purpose acquisition companies have amended the definition of business combination, increased redemption thresholds and extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our amended and restated certificate of incorporation will require the approval of holders of 65% of our common stock, and amending our warrant agreement will require a vote of holders of at least 50% of the public warrants and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 50% of the number of the then outstanding private placement warrants. In addition, our amended and restated certificate of incorporation requires us to provide our public stockholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete an initial business combination within 24 months of the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity. To the extent any of such amendments would be deemed to fundamentally change the nature of the securities offered through this registration statement, we would register, or seek an exemption from registration for, the affected securities. We cannot assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial business combination in order to effectuate our initial business combination.
The provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of 65% of our common stock, which is a lower amendment threshold than that of some other special purpose acquisition companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation to facilitate the completion of an initial business combination that some of our stockholders may not support.
Our amended and restated certificate of incorporation provides that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65% of our common stock entitled to vote thereon and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock entitled to vote thereon. In all other instances, our amended and restated certificate of incorporation may be amended by holders of a majority of our outstanding common stock
entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. Our initial stockholders, who will collectively beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which govern our pre-business combination behavior more easily than some other special purpose acquisition companies, and this may increase our ability to complete a business combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.
Our sponsor, executive officers, directors and director nominees have agreed, pursuant to written agreements with us, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, executive officers, directors or director nominees for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.
Certain agreements related to this offering may be amended without stockholder approval.
Each of the agreements related to this offering to which we are a party, other than the warrant agreement and the investment management trust agreement, may be amended without stockholder approval. Such agreements are: the underwriting agreement; the letter agreement among us and our initial stockholders, sponsor, officers and directors; the registration rights agreement among us and our initial stockholders; the private placement warrants purchase agreement between us and our sponsor; and the administrative services agreement among us, our sponsor and an affiliate of our sponsor. These agreements contain various provisions that our public stockholders might deem to be material. For example, our letter agreement and the underwriting agreement contain certain lock-up provisions with respect to the founder shares, private placement warrants and other securities held by our initial stockholders, sponsor, officers and directors. Amendments to such agreements would require the consent of the applicable parties thereto and would need to be approved by our board of directors, which may do so for a variety of reasons, including to facilitate our initial business combination. While we do not expect our board of directors to approve any amendment to any of these agreements prior to our initial business combination, it may be possible that our board of directors, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement. Any amendment entered into in connection with the consummation of our initial business combination will be disclosed in our proxy materials or tender offer documents, as applicable, related to such initial business combination, and any other material amendment to any of our material agreements will be disclosed in a filing with the SEC. Any such amendments would not require approval from our stockholders, may result in the completion of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities. For example, amendments to the lock-up provision discussed above may result in our initial stockholders selling their securities earlier than they would otherwise be permitted, which may have an adverse effect on the price of our securities.
We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination.
We have not selected any specific business combination target but intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of this offering and the sale of the private placement warrants. As a result, if the cash portion of the purchase price exceeds the amount
available from the trust account, net of amounts needed to satisfy any redemption by public stockholders, we may be required to seek additional financing to complete such proposed initial business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. Further, we may be required to obtain additional financing in connection with the closing of our initial business combination for general corporate purposes, including for maintenance or expansion of operations of the post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, or to fund the purchase of other companies. If we are unable to complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless. In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after our initial business combination.
Our initial stockholders control a substantial interest in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
Upon closing of this offering, our initial stockholders will own 20% of our issued and outstanding common stock (assuming they do not purchase any units in this offering). Accordingly, they may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation. If our initial stockholders purchase any units in this offering or if our initial stockholders purchase any additional Class A common stock in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our initial stockholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock. In addition, our board of directors, whose members were elected by our sponsor, is and will be divided into three classes, each of which will generally serve for a terms for three years with only one class of directors being elected in each year. We may not hold an annual meeting of stockholders to elect new directors prior to the completion of our initial business combination, in which case all of the current directors will continue in office until at least the completion of the business combination. If there is an annual meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for election and our initial stockholders, because of their ownership position, will have considerable influence regarding the outcome. Accordingly, our initial stockholders will continue to exert control at least until the completion of our initial business combination.
Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.
The federal proxy rules require that the proxy statement with respect to the vote on an initial business combination include historical and pro forma financial statement disclosure. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America (“GAAP”), or international financial reporting standards as issued by the International Accounting Standards Board (“IFRS”), depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”). These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.
Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an initial business combination.
Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.
Our initial business combination and our structure thereafter may not be tax-efficient to our stockholders and warrant holders. As a result of our business combination, our tax obligations may be more complex, burdensome and uncertain.
Although we will attempt to structure our initial business combination in a tax-efficient manner, tax structuring considerations are complex, the relevant facts and law are uncertain and may change, and we may prioritize commercial and other considerations over tax considerations. For example, in connection with our initial business combination and subject to any requisite stockholder approval, we may structure our business combination in a manner that requires stockholders and/or warrant holders to recognize gain or income for tax purposes, effect a business combination with a target company in another jurisdiction, or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction in which the target company or business is located). We do not intend to make any cash distributions to stockholders or warrant holders to pay taxes in connection with our business combination or thereafter. Accordingly, a stockholder or a warrant holder may need to satisfy any liability resulting from our initial business combination with cash from its own funds or by selling all or a portion of the shares received. In addition, stockholders and warrant holders may also be subject to additional income, withholding or other taxes with respect to their ownership of us after our initial business combination.
In addition, we may effect a business combination with a target company that has business operations outside of the United States, and possibly, business operations in multiple jurisdictions. If we effect such a business combination, we could be subject to significant income, withholding and other tax obligations in a number of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Due to the complexity of tax obligations and filings in other jurisdictions, we may have a heightened risk related to audits or examinations by U.S. federal, state, local and non-U.S. taxing authorities. This additional complexity and risk could have an adverse effect on our after-tax profitability and financial condition.
Risks Relating to the Post-Business Combination Company
Subsequent to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.
Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully
identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining debt financing to partially finance the initial business combination or thereafter. Accordingly, any stockholders or warrant holders who choose to remain stockholders or warrant holders following the business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy materials or tender offer documents, as applicable, relating to the business combination contained an actionable material misstatement or material omission.
Our ability to successfully effect our initial business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination, and a particular business combination may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our key personnel may be able to remain with our company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business, subject to their fiduciary duties under Delaware law.
We may have a limited ability to assess the management of a prospective target business and, as a result, may effect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders or warrant holders who choose to remain stockholders or warrant holders following the business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value unless they are able
to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement or material omission.
The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
Our management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares of Class A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of Class A common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding Class A common stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s shares than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain control of the target business.
Risks Relating to Acquiring and Operating a Business in Foreign Countries
If we effect our initial business combination with a company located outside of the United States, we would be subject to a variety of additional risks that may adversely affect us.
If we pursue a target company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:
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costs and difficulties inherent in managing cross-border business operations;
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rules and regulations regarding currency redemption;
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complex corporate withholding taxes on individuals;
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laws governing the manner in which future business combinations may be effected;
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exchange listing and/or delisting requirements;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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local or regional economic policies and market conditions;
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unexpected changes in regulatory requirements;
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challenges in managing and staffing international operations;
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longer payment cycles;
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tax issues, such as tax law changes and variations in tax laws as compared to the United States;
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currency fluctuations and exchange controls;
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rates of inflation;
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challenges in collecting accounts receivable;
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cultural and language differences;
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employment regulations;
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underdeveloped or unpredictable legal or regulatory systems;
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corruption;
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protection of intellectual property;
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social unrest, crime, strikes, riots and civil disturbances;
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regime changes and political upheaval;
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terrorist attacks and wars; and
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deterioration of political relations with the United States.
We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we complete such initial business combination, our operations might suffer, either of which may adversely impact our business, financial condition and results of operations.
Risks Relating to our Management Team
We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.
We have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
Past performance by our management team and their affiliates may not be indicative of future performance of an investment in us.
Information regarding performance by, or businesses associated with, our management team or businesses associated with them is presented for informational purposes only. Past performance by our management team is not a guarantee either (i) of success with respect to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate for our initial business combination. You should not rely on the historical record of the performance of our management team or businesses associated with them as indicative of our future performance of an investment in us or the returns we will, or is likely to, generate going forward.
We may seek business combination opportunities in industries or sectors that may be outside of our management’s areas of expertise.
We will consider a business combination outside of our management’s areas of expertise if a business combination candidate is presented to us and we determine that such candidate offers an attractive business combination opportunity for our company. Although our management will endeavor to evaluate the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in a business combination candidate. In the event we elect to pursue a business combination outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to ascertain or assess adequately all of the relevant risk factors. Accordingly, any stockholders who choose to remain stockholders following our initial business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
We are dependent upon our executive officers and directors and their loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.
Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. For a complete
discussion of our executive officers’ and directors’ other business affairs, please see “Management — Officers, Directors and Director Nominees.”
Our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. In addition, our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or ventures may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
For a complete discussion of our executive officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Management — Officers, Directors and Director Nominees,” “Management — Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”
Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or executive officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to us as a matter of Delaware law and we or our stockholders might have a claim against such individuals for infringing on our stockholders’ rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors or existing holders which may raise potential conflicts of interest.
In light of the involvement of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers, directors or existing holders. Our directors also serve as officers and board members for other entities, including, without
limitation, those described under “Management — Conflicts of Interest.” Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth in “Proposed Business — Effecting our initial business combination — Selection of a target business and structuring of our initial business combination” and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, executive officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
Since our sponsor, executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they may acquire during or after this offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
On January 29, 2021, our sponsor purchased an aggregate of 5,031,250 founder shares for a purchase price of $25,000, or approximately $0.005 per share. In March 2021, our sponsor transferred all of the founder shares held by it to members of our board of directors, our management team and persons or entities affiliated with AMCI Group. On May 14, 2021, certain of our initial stockholders forfeited an aggregate of 718,750 founder shares, resulting in an aggregate of 4,312,500 founder shares outstanding. Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued.
The number of founder shares outstanding was determined based on the expectation that the total size of this offering would be a maximum of 17,250,000 units if the underwriters’ over-allotment option is exercised in full, and therefore that such founder shares would represent 20% of the outstanding shares after this offering. Up to 562,500 of the founder shares will be forfeited depending on the extent to which the underwriters’ over-allotment is exercised. The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has committed to purchase an aggregate of 3,500,000 private placement warrants (or 3,725,000 private placement warrants if the underwriters’ over-allotment option is exercised in full), each exercisable for one share of Class A common stock at $11.50 per share, for an aggregate purchase price of $3,500,000 (or $3,725,000 if the underwriters’ over-allotment option is exercised in full), or $1.00 per warrant, that will also be worthless if we do not complete our initial business combination. The personal and financial interests of our executive officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. This risk may become more acute as the 24-month anniversary of the closing of this offering nears, which is the deadline for our completion of an initial business combination.
Risks Relating to our Securities
The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.
The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below
zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our amended and restated memorandum and articles of association, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes payable and up to $100,000 of interest to pay dissolution expenses. Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
Our public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) our completion of an initial business combination, and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, and the redemption of our public shares if we are unable to complete an initial business combination within 24 months from the closing of this offering, subject to applicable law and as further described herein. In addition, if our plan to redeem our public shares if we are unable to complete an initial business combination within 24 months from the closing of this offering is not completed for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond 24 months from the closing of this offering before they receive funds from our trust account. In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We have applied to have our units listed on Nasdaq on or promptly after the date of this prospectus and our Class A common stock and warrants on or promptly after their date of separation. We cannot guarantee that our securities will be approved for listing on Nasdaq. Although after giving effect to this offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in Nasdaq’s listing standards, we cannot assure you that our securities will be, or will continue to be, listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and share price levels. Generally, we must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, our share price would generally be required to be at least $4.00 per share and our stockholders’ equity would generally be required to be at least $5.0 million and we would be required to have a minimum of 300 round lot holders of our securities, with at least 50% of such round lot holders holding securities with a market value of at least $2,500. We cannot assure you that we will be able to meet those initial listing requirements at that time.
If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually our Class A common stock and warrants will be listed on Nasdaq, our units, Class A common stock and warrants will qualify as covered securities under the statute. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.
You will not be permitted to exercise your warrants unless we register and qualify the underlying Class A common stock or certain exemptions are available.
If the issuance of the Class A common stock upon exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities Act and applicable state securities laws, holders of warrants will not be entitled to exercise such warrants and such warrants may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the Class A common stock included in the units.
We have agreed that, as soon as practicable, but in no event later than 15 business days, after the closing of our initial business combination, we will use our best efforts to file with the SEC a post-effective amendment to the registration statement of which this prospectus forms a part or a new registration statement covering the registration under the Securities Act of the shares of Class A common stock issuable upon exercise of the warrants and thereafter will use our best efforts to cause the same to become effective within 60 business days following our initial business combination and to maintain a current prospectus relating to the shares of Class A common stock issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order.
If the shares of Class A common stock issuable upon exercise of the warrants are not registered under the Securities Act, under the terms of the warrant agreement, holders of warrants who seek to exercise their warrants will not be permitted to do so for cash and, instead, will be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption.
In no event will warrants be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration or qualification is available.
If our shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders of warrants who seek to exercise their warrants to do so for cash and, instead, require them to do so on a cashless basis in accordance with
Section 3(a)(9) of the Securities Act; in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares underlying the warrants under applicable state securities laws, and in the event we do not so elect, we will use our best efforts to register or qualify the shares underlying the warrants under applicable state securities laws to the extent an exemption is not available.
In no event will we be required to net cash settle any warrant, or issue securities (other than upon a cashless exercise as described above) or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state securities laws.
You may only be able to exercise your public warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for cash.
The warrant agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the shares of Class A common stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement; (ii) if we have so elected and the shares of Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the public warrants for redemption. If you exercise your public warrants on a cashless basis, you would pay the warrant exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “Sponsor fair market value” of our shares of Class A common stock (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value. The “Sponsor fair market value” is the average reported closing price of the shares of Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable. As a result, you would receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for cash.
The grant of registration rights to our initial stockholders and holders of our private placement warrants may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our shares of Class A common stock.
Pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, our initial stockholders and their permitted transferees can demand that we register the shares of Class A common stock into which founder shares are convertible, holders of our private placement warrants and their permitted transferees can demand that we register the private placement warrants and the Class A common stock issuable upon exercise of the private placement warrants and holders of warrants that may be issued upon conversion of working capital loans may demand that we register such warrants or the Class A common stock issuable upon conversion of such warrants. The registration rights will be exercisable with respect to the founder shares and the private placement warrants and the Class A common stock issuable upon exercise of such private placement warrants. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A common stock. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock that is expected when the shares of common stock owned by our initial stockholders, holders of our private placement warrants or holders of our working capital loans or their respective permitted transferees are registered.
We may issue additional shares of Class A common stock or shares of preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock upon the conversion of the founder shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.
Our amended and restated certificate of incorporation authorizes the issuance of up to 280,000,000 shares of Class A common stock, par value $0.0001 per share, 20,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. Immediately after this offering, there will be 265,000,000 and 16,250,000 (assuming in each case that the underwriters have not exercised their over-allotment option and the forfeiture of 562,500 shares of Class B common stock) authorized but unissued shares of Class A common stock and Class B common stock, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the Class B common stock. The Class B common stock is automatically convertible into Class A common stock concurrently with or immediately following the consummation of our initial business combination, initially at a one-for-one ratio but subject to adjustment as set forth herein and in our amended and restated certificate of incorporation. Immediately after this offering, there will be no shares of preferred stock issued and outstanding.
We may issue a substantial number of additional shares of Class A common stock or shares of preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth therein. However, our amended and restated certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our amended and restated certificate of incorporation to (x) extend the time we have to consummate a business combination beyond 24 months from the closing of this offering or (y) amend the foregoing provisions. These provisions of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote. The issuance of additional shares of common stock or shares of preferred stock:
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may significantly dilute the equity interest of investors in this offering;
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may subordinate the rights of holders of Class A common stock if shares of preferred stock are issued with rights senior to those afforded our Class A common stock;
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could cause a change in control if a substantial number of shares of Class A common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and
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may adversely affect prevailing market prices for our units, Class A common stock and/or warrants.
Unlike some other similarly structured special purpose acquisition companies, our initial stockholders will receive additional shares of Class A common stock if we issue certain shares to consummate an initial business combination.
The founder shares will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with our initial business combination, the number of shares of Class A common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by public stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or
deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of founder shares will never occur on a less than one-for-one basis. This is different than some other similarly structured special purpose acquisition companies in which the initial stockholders will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to our initial business combination.
Our initial stockholders paid an aggregate of $25,000 to cover certain of our offering costs in exchange for 4,312,500 founder shares, or approximately $0.006 per founder share and, accordingly, you will experience immediate and substantial dilution from the purchase of our shares of Class A common stock.
The difference between the public offering price per share (allocating all of the unit purchase price to the share of Class A common stock and none to the warrant included in the unit) and the pro forma net tangible book value per share of our Class A common stock after this offering constitutes the dilution to you and the other investors in this offering. Our initial stockholders acquired the founder shares at a nominal price, significantly contributing to this dilution. Upon closing of this offering, and assuming no value is ascribed to the warrants included in the units, you and the other public stockholders will incur an immediate and substantial dilution of approximately 91.1% or $9.11 per share, assuming no exercise of the underwriters’ over-allotment option, the difference between the pro forma net tangible book value per share after this offering of $0.89 and the initial offering price of $10.00 per unit. This dilution would increase to the extent that the anti-dilution provisions of the founder shares result in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the founder shares at the time of our initial business combination and would become exacerbated to the extent that public stockholders seek redemptions from the trust for their public shares. In addition, because of the anti-dilution protection in the founder shares, any equity or equity-linked securities issued in connection with our initial business combination would be disproportionately dilutive to our Class A common stock.
We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of shares of Class A common stock purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period or decrease the number of shares of Class A common stock purchasable upon exercise of a warrant.
We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met. If and when the warrants become redeemable
by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by our sponsor or its permitted transferees.
In addition, we have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that the closing price of our Class A common stock equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met, including that holders will be able to exercise their warrants prior to redemption for a number of shares of Class A common stock determined based on the redemption date and the fair market value of our Class A common stock. Please see “Description of Securities — Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00.” The value received upon exercise of the warrants (i) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (ii) may not compensate the holders for the value of the warrants, including because the number of shares of Class A common stock received is capped at 0.361 shares of Class A common stock per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
Our warrants may have an adverse effect on the market price of our shares of Class A common stock and make it more difficult to effectuate our initial business combination.
We will be issuing warrants to purchase 7,500,000 shares of our Class A common stock (or up to 8,625,000 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full) as part of the units offered by this prospectus and, simultaneously with the closing of this offering, we will be issuing in a private placement an aggregate of 3,500,000 private placement warrants (or 3,725,000 private placement warrants if the underwriters’ over-allotment option is exercised in full), each exercisable to purchase one share of Class A common stock at $11.50 per share. In addition, if our sponsor or an affiliate of our sponsor or certain of our officers and directors makes any working capital loans, such lender may convert those loans into up to an additional 1,500,000 private placement warrants, at the price of $1.00 per warrant. To the extent we issue common stock to effectuate a business transaction, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will increase the number of issued and outstanding shares of Class A common stock and reduce the value of the Class A common stock issued to complete the business transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or increase the cost of acquiring the target business.
Because each unit contains one-half of one warrant and only a whole warrant may be exercised, the units may be worth less than units of other special purpose acquisition companies.
Each unit contains one-half of one warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole units will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of shares of Class A common stock to be issued to the warrant holder. This is different from other offerings similar to ours whose units include one common share and one warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-half of the number of shares compared to units that each contain
a whole warrant to purchase one share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if it included a warrant to purchase one whole share.
Our warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our warrant agreement will provide that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
Certain of our warrants are expected to be accounted for as a warrant liability and will be recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our common stock or may make it more difficult for us to consummate an initial business combination.
Following the consummation of this offering, we will account for the 11,000,000 warrants to be issued in connection with this offering (including the 7,500,000 warrants sold as part of the units in this offering and the 3,500,000 private placement warrants, assuming the underwriters’ over-allotment option is not exercised) in accordance with the guidance contained in Derivatives and Hedging — Contracts in Entity’s Own Equity (ASC 815-40). Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, we will classify each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in our statement of operations and therefore our reported earnings. The impact of changes in fair value on earnings may have an adverse effect on the market price of our common stock. In addition, potential targets may seek a SPAC that does not have warrants that are accounted for as a warrant liability, which may make it more difficult for us to consummate an initial business combination with a target business.
The determination of the offering price of our units, the size of this offering and terms of the units is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our units properly reflects the value of such units than you would have in a typical offering of an operating company.
Prior to this offering there has been no public market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with the representative of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of the units, including the Class A common stock and warrants underlying the units, include:
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the history and prospects of companies whose principal business is the acquisition of other companies;
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prior offerings of those companies;
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our prospects for acquiring an operating business at attractive values;
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a review of debt to equity ratios in leveraged transactions;
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our capital structure;
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an assessment of our management and their experience in identifying operating companies;
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general conditions of the securities markets at the time of this offering; and
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other factors as were deemed relevant.
Although these factors were considered, the determination of our offering size, price and terms of the units is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results.
There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
There is currently no market for our securities. Stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
Potential participation in this offering by our anchor investors could reduce the public float for our shares.
Our anchor investors have each expressed to us an interest to purchase an aggregate of approximately 45% of the shares in this offering at the offering price and we have agreed to direct the underwriters to sell to the anchor investors such amount of shares. If our anchor investors purchase all of the shares for which they have expressed an interest, such purchases would reduce the available public float for our shares. Any such reduction in our available public float may consequently reduce the trading volume, volatility and liquidity of our shares relative to what they would have been had such shares been purchased by public investors.
General Risk Factors
We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a blank check company incorporated under the laws of the State of Delaware with no operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination. We have no plans, arrangements or understandings with any
prospective target business concerning a business combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A common stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates equals or exceeds $250 million as of the prior June 30th, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates equals to or exceeds $700 million as of the prior June 30th. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our shares of Class A common stock and could entrench management.
Our amended and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate the terms of and
issue new series of preferred stock, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
Provisions in our amended and restated certificate of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers.
Our amended and restated certificate of incorporation will require, unless we consent in writing to the selection of an alternative forum, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or bylaws, or (iv) any action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery in the State of Delaware, except any claim (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.
Notwithstanding the foregoing, our amended and restated certificate of incorporation will provide that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
Additionally, unless we consent in writing to the selection of an alternative forum, the federal courts shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act against us or any of our directors, officers, other employees or agents. Section 22 of the Securities Act, however, created concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce these exclusive forum provisions, and the enforceability of similar choice of forum provisions in other companies’ charter documents has been challenged in legal proceedings. While the Delaware courts have determined that such exclusive forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions. Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and consented to these provisions; however, we note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us and may have the effect of discouraging lawsuits against our directors and officers.
Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
As of January 29, 2021, we had zero in cash and zero in working capital. Further, we have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. Management’s plans to address this need for capital through this offering are discussed in the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial statements contained elsewhere in this prospectus do not include any adjustments that might result from our inability to consummate this offering or our inability to continue as a going concern.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:
•
our ability to select an appropriate target business or businesses;
•
our ability to complete our initial business combination;
•
our expectations around the performance of the prospective target business or businesses;
•
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
•
our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;
•
our potential ability to obtain additional financing to complete our initial business combination;
•
our pool of prospective target businesses;
•
our ability to consummate an initial business combination due to the uncertainty resulting from the recent COVID-19 pandemic;
•
the ability of our officers and directors to generate a number of potential business combination opportunities;
•
our public securities’ potential liquidity and trading;
•
the lack of a market for our securities;
•
the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;
•
the trust account not being subject to claims of third parties; or
•
our financial performance following this offering.
The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
USE OF PROCEEDS
We are offering 15,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering together with the funds we will receive from the sale of the private placement warrants will be used as set forth in the following table.
| |
|
|
Without Over-
allotment Option
|
|
|
Over-allotment
Option Exercised
|
|
|
Gross proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross proceeds from units offered to public(1)
|
|
|
|
$ |
150,000,000 |
|
|
|
|
$ |
172,500,000 |
|
|
|
Gross proceeds from private placement warrants offered in the private placement
|
|
|
|
$ |
3,500,000 |
|
|
|
|
$ |
3,725,000 |
|
|
|
Total gross proceeds
|
|
|
|
$ |
153,500,000 |
|
|
|
|
$ |
176,225,000 |
|
|
|
Estimated offering expenses(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting commissions (1.0% of gross proceeds from units offered to public, excluding deferred portion)(3)
|
|
|
|
$ |
1,500,000 |
|
|
|
|
$ |
1,725,000 |
|
|
|
Legal fees and expenses
|
|
|
|
|
300,000 |
|
|
|
|
|
300,000 |
|
|
|
Printing and engraving expenses
|
|
|
|
|
40,000 |
|
|
|
|
|
40,000 |
|
|
|
Accounting fees and expenses
|
|
|
|
|
40,000 |
|
|
|
|
|
40,000 |
|
|
|
SEC/FINRA Expenses
|
|
|
|
|
71,000 |
|
|
|
|
|
71,000 |
|
|
|
Travel and road show
|
|
|
|
|
25,000 |
|
|
|
|
|
25,000 |
|
|
|
Nasdaq listing and filing fees
|
|
|
|
|
75,000 |
|
|
|
|
|
75,000 |
|
|
|
Directors and officers insurance
|
|
|
|
|
350,000 |
|
|
|
|
|
350,000 |
|
|
|
Miscellaneous
|
|
|
|
|
99,000 |
|
|
|
|
|
99,000 |
|
|
|
Total offering expenses (other than underwriting commissions)
|
|
|
|
$ |
1,000,000 |
|
|
|
|
$ |
1,000,000 |
|
|
|
Proceeds after estimated offering expenses
|
|
|
|
$ |
151,000,000 |
|
|
|
|
$ |
173,500,000 |
|
|
|
Held in trust account(3)
|
|
|
|
$ |
150,000,000 |
|
|
|
|
$ |
172,500,000 |
|
|
|
% of public offering size
|
|
|
|
|
100 |
|
|
|
|
|
100 |
|
|
|
Not held in trust account
|
|
|
|
$ |
1,000,000 |
|
|
|
|
$ |
1,000,000 |
|
|
The following table shows the use of the approximately $1,000,000 of net proceeds not held in the trust account.(4)
| |
|
|
Amount
|
|
|
% of Total
|
|
|
Legal, accounting, due diligence, travel, and other expenses in connection with any
business combination(5)
|
|
|
|
|
500,000 |
|
|
|
|
|
50% |
|
|
|
Legal and accounting fees related to regulatory reporting obligations
|
|
|
|
|
75,000 |
|
|
|
|
|
7.5% |
|
|
|
Nasdaq and other regulatory fees
|
|
|
|
|
75,000 |
|
|
|
|
|
7.5% |
|
|
|
Payment for office space, secretarial and administrative services
|
|
|
|
|
240,000 |
|
|
|
|
|
24% |
|
|
|
Consulting, travel and miscellaneous expenses incurred during search for initial business combination target
|
|
|
|
|
75,000 |
|
|
|
|
|
7.5% |
|
|
|
Working capital to cover miscellaneous expenses
|
|
|
|
|
35,000 |
|
|
|
|
|
3.5% |
|
|
|
Total
|
|
|
|
$ |
1,000,000 |
|
|
|
|
|
100.0% |
|
|
(1)
Includes amounts payable to public stockholders who properly redeem their shares in connection with our successful completion of our initial business combination.
(2)
A portion of the offering expenses will be paid from the proceeds of loans from our sponsor of up to $300,000 as described in this prospectus. These loans will be repaid upon completion of this offering out of the $1,000,000 of offering proceeds that has been allocated for the payment of offering expenses
other than underwriting commissions. In the event that offering expenses are less than set forth in this table, any such amounts will be used for post-closing working capital expenses.
(3)
The underwriters have agreed to defer underwriting commissions of 3.5% of the gross proceeds of this offering. Upon and concurrently with the completion of our initial business combination, up to $5,250,000, which constitutes the underwriters’ deferred commissions (or up to $6,037,500 if the underwriters’ over-allotment option is exercised in full) will be paid to the underwriters from the funds held in the trust account. See “Underwriting.” The remaining funds, less amounts released to the trustee to pay redeeming stockholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.
(4)
These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring our initial business combination based upon the level of complexity of such business combination. In the event we identify a business combination target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount in the table above does not include interest available to us from the trust account. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. We estimate the interest earned on the trust account will be approximately $750,000 per year, assuming an interest rate of 0.5% per year; however, we can provide no assurances regarding this amount.
(5)
Includes estimated amounts that may also be used in connection with our initial business combination to fund a “no shop” provision and commitment fees for financing.
Nasdaq rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the $153.5 million in gross proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, or $176.225 million if the underwriters’ over-allotment option is exercised in full, $150.0 million, or $172.5 million if the underwriters’ over-allotment option is exercised in full ($10.00 per unit in either case), will be deposited into a trust account with Continental Stock Transfer & Trust Company acting as trustee, after deducting $1.5 million in underwriting discounts and commissions payable upon the closing of this offering (or $1.725 million if the underwriters’ over-allotment option is exercised in full) and an aggregate of $2.0 million to pay fees and expenses in connection with the closing of this offering and for working capital following this offering. The proceeds held in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. We estimate the interest earned on the trust account will be approximately $750,000 per year, assuming an interest rate of 0.5% per year; however, we can provide no assurances regarding this amount.
We expect that the interest earned on the trust account will be sufficient to pay income taxes. We will not be permitted to withdraw any of the principal or interest held in the trust account, except for the withdrawal of interest to pay our taxes, until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we are unable to complete our initial business combination within 24 months from the closing of this offering, subject to applicable law, and (iii) the redemption of our public shares properly submitted in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated our initial business
combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity.
The net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our initial business combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination, we may apply the balance of the cash released from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. There is no limitation on our ability to raise funds through the issuance of equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements we may enter into following consummation of this offering. However, our amended and restated certificate of incorporation provides that, following this offering and prior to the consummation of our initial business combination, we will be prohibited from issuing additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our amended and restated certificate of incorporation to (x) extend the time we have to consummate a business combination beyond 24 months from the closing of this offering or (y) amend the foregoing provisions.
We believe that amounts not held in trust will be sufficient to pay the costs and expenses to which such proceeds are allocated. This belief is based on the fact that while we may begin preliminary due diligence of a target business in connection with an indication of interest, we intend to undertake in-depth due diligence, depending on the circumstances of the relevant prospective business combination, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses the terms of a business combination. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our sponsor, members of our management team or any of their affiliates, but such persons are not under any obligation to advance funds to, or invest in, us.
Subsequent to the closing of this offering, we will pay our sponsor $10,000 per month for office space, secretarial and administrative services provided to members of our management team. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
Prior to the closing of this offering, our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. These loans are non-interest bearing, unsecured and are due at the earlier of June 30, 2021 or the closing of this offering. The loan will be repaid upon the closing of this offering out of the $1,000,000 of offering proceeds that has been allocated to the payment of offering expenses.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Except as set forth above, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
DIVIDEND POLICY
We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. If we increase or decrease the size of this offering pursuant to Rule 462(b) under the Securities Act, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20.0% of our issued and outstanding common stock upon the consummation of this offering. Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
DILUTION
The difference between the public offering price per share of Class A common stock, assuming no value is attributed to the warrants included in the units we are offering pursuant to this prospectus or the private placement warrants, and the pro forma net tangible book value per share of our Class A common stock after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution associated with the sale and exercise of warrants, including the private placement warrants, which would cause the actual dilution to the public stockholders to be higher, particularly where a cashless exercise is utilized. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of shares of Class A common stock which may be redeemed for cash), by the number of shares of outstanding Class A common stock.
At March 31, 2021, our net tangible book deficit was $93,208, or approximately $(0.02) per share of common stock. After giving effect to the sale of 15,000,000 shares of Class A common stock included in the units we are offering by this prospectus (or 17,250,000 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full), the sale of the private placement warrants and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at March 31, 2021 would have been $5,000,006 or $0.89 per share (or $5,000,006 or $0.78 per share if the underwriters’ over-allotment option is exercised in full), representing an immediate increase in net tangible book value (as decreased by the value of the 13,101,473 shares of Class A common stock that may be redeemed for cash, or 15,153,327 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full) of $0.91 per share (or $0.80 if the underwriters’ over-allotment option is exercised in full) to our initial stockholders as of the date of this prospectus. Total dilution to public stockholders from this offering will be $9.11 per share (or $9.22 if the underwriters’ over-allotment option is exercised in full).
The following table illustrates the dilution to the public stockholders on a per-share basis, assuming no value is attributed to the warrants included in the units or the private placement warrants:
| |
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Public offering price
|
|
|
|
$ |
10.00 |
|
|
|
|
$ |
10.00 |
|
|
|
Net tangible book deficit before the Proposed Public Offering
|
|
|
|
$ |
(0.02) |
|
|
|
|
$ |
(0.02) |
|
|
|
Increase attributable to public stockholders
|
|
|
|
$ |
0.91 |
|
|
|
|
$ |
0.80 |
|
|
|
Pro forma net tangible book value after the Proposed Public Offering and the
sale of the private placement warrants
|
|
|
|
$ |
0.89 |
|
|
|
|
$ |
0.78 |
|
|
|
Dilution to public stockholders
|
|
|
|
$ |
9.11 |
|
|
|
|
$ |
9.22 |
|
|
|
Percentage of dilution to public stockholders
|
|
|
|
|
91.1% |
|
|
|
|
|
92.2% |
|
|
For purposes of presentation, we have reduced our pro forma net tangible book value after this offering (assuming no exercise of the underwriters’ over-allotment option) by $131,014,730 because holders of up to approximately 87.34% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per share redemption price equal to the amount in the trust account as set forth in our tender offer or proxy materials (initially anticipated to be the aggregate amount held in trust two business days prior to the commencement of our tender offer or stockholders meeting, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable)), divided by the number of shares of Class A common stock sold in this offering.
The following table sets forth information with respect to our initial stockholders and the public stockholders:
| |
|
|
Purchased
|
|
|
Total Consideration
|
|
|
Average Price
Per Share
|
|
| |
|
|
Number
|
|
|
Percentage
|
|
|
Amount
|
|
|
Percentage
|
|
|
Initial Stockholders(1)
|
|
|
|
|
3,750,000 |
|
|
|
|
|
20.00% |
|
|
|
|
$ |
25,000 |
|
|
|
|
|
0.02% |
|
|
|
|
$ |
0.007 |
|
|
|
Public Stockholders
|
|
|
|
|
15,000,000 |
|
|
|
|
|
80.00% |
|
|
|
|
|
150,000,000 |
|
|
|
|
|
99.98% |
|
|
|
|
$ |
10.00 |
|
|
| |
|
|
|
|
18,750,000 |
|
|
|
|
|
100.00% |
|
|
|
|
$ |
150,025,000 |
|
|
|
|
|
100.00% |
|
|
|
|
|
|
|
|
(1)
Assumes that 562,500 founder shares are forfeited after the closing of this offering in the event the underwriters do not exercise their over-allotment option.
The pro forma net tangible book value per share after the offering (assuming that the underwriters do not exercise their over-allotment option) is calculated as follows:
| |
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tangible book deficit before this offering
|
|
|
|
$ |
(93,208) |
|
|
|
|
$ |
(93,208) |
|
|
|
Net proceeds from this offering and sale of the private placement warrants(1)
|
|
|
|
|
151,000,000 |
|
|
|
|
|
173,500,000 |
|
|
|
Plus: Offering costs paid in advance, excluded from tangible book value before this offering
|
|
|
|
|
117,082 |
|
|
|
|
|
117,082 |
|
|
|
Less: Warrant liabilities
|
|
|
|
|
(9,759,138) |
|
|
|
|
|
(10,953,103) |
|
|
|
Less: Deferred underwriting commissions
|
|
|
|
|
(5,250,000) |
|
|
|
|
|
(6,037,500) |
|
|
|
Less: Proceeds held in trust subject to redemption(2)
|
|
|
|
|
(131,014,730) |
|
|
|
|
|
(151,533,265) |
|
|
| |
|
|
|
$ |
5,000,006 |
|
|
|
|
$ |
5,000,006 |
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B common stock outstanding prior to this offering
|
|
|
|
|
4,312,500 |
|
|
|
|
|
4,312,500 |
|
|
|
Class B common stock forfeited if over-allotment is not exercised
|
|
|
|
|
(562,500) |
|
|
|
|
|
— |
|
|
|
Class A common stock included in the units offered
|
|
|
|
|
15,000,000 |
|
|
|
|
|
17,250,000 |
|
|
|
Less: common stock subject to redemption
|
|
|
|
|
(13,101,473) |
|
|
|
|
|
(15,153,327) |
|
|
| |
|
|
|
|
5,648,527 |
|
|
|
|
|
6,409,174 |
|
|
(1)
Expenses applied against gross proceeds include offering expenses of $1,000,000 and underwriting commissions of $1,500,000 (excluding deferred underwriting fees). See “Use of Proceeds.”
(2)
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. In the event of any such purchases of our shares prior to the completion of our initial business combination, the number of shares of Class A common stock subject to redemption will be reduced by the amount of any such purchases, increasing the pro forma net tangible book value per share. See “Proposed Business — Effecting Our Initial Business Combination — Permitted Purchases of Our Securities.”
CAPITALIZATION
The following table sets forth our capitalization at March 31, 2021, and as adjusted to give effect to the filing of our amended and restated certificate of incorporation, the sale of our units in this offering and the sale of the private placement warrants and the application of the estimated net proceeds derived from the sale of such securities, assuming no exercise by the underwriters of their over-allotment option:
| |
|
|
March 31, 2021
|
|
| |
|
|
Actual
|
|
|
As Adjusted
|
|
|
Notes payable to related party(1)
|
|
|
|
$ |
78,632 |
|
|
|
|
$ |
— |
|
|
|
Deferred underwriting commissions
|
|
|
|
|
— |
|
|
|
|
|
5,250,000 |
|
|
|
Warrant liabilities
|
|
|
|
|
— |
|
|
|
|
|
9,759,138 |
|
|
|
Class A common stock, subject to redemption, 0 and 13,101,473 shares which are subject to possible redemption, actual and as adjusted, respectively(3)
|
|
|
|
|
— |
|
|
|
|
|
131,014,730 |
|
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding, actual and as adjusted, respectively
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Class A common stock, $0.0001 par value, 280,000,000 shares authorized; 0 and
1,898,527 shares issued and outstanding, actual and as adjusted, respectively
|
|
|
|
|
— |
|
|
|
|
|
190 |
|
|
|
Class B common stock, $0.0001 par value, 20,000,000 shares authorized, 4,312,500 and 3,750,000 shares issued and outstanding, actual and as adjusted, respectively(4)
|
|
|
|
|
431 |
|
|
|
|
|
375 |
|
|
|
Additional paid-in capital
|
|
|
|
|
24,569 |
|
|
|
|
|
5,326,019 |
|
|
|
Accumulated deficit
|
|
|
|
|
(1,126) |
|
|
|
|
|
(326,578) |
|
|
|
Total stockholders’ equity
|
|
|
|
$ |
23,874 |
|
|
|
|
$ |
5,000,006 |
|
|
|
Total capitalization
|
|
|
|
$ |
102,506 |
|
|
|
|
$ |
151,023,874 |
|
|
(1)
Our sponsor may loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering. The “as adjusted” information gives effect to the repayment of any loans made under this note out of the proceeds from this offering and the sale of the private placement warrants. As of March 31, 2021, we had borrowed $78,632 under the promissory note.
(2)
The warrants are expected to be accounted for as derivative liabilities in accordance with the guidance contained in ASC 815-40. Such guidance provides that, because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, we will classify each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in our statement of operations. The warrants are also subject to re-evaluation of the proper classification and accounting treatment at each reporting period.
(3)
Upon the completion of our initial business combination, we will provide our public stockholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein whereby redemptions cannot cause our net tangible assets to be less than $5,000,001.
(4)
Actual share amount is prior to any forfeiture of founder shares and as adjusted amount assumes no exercise of the underwriters’ over-allotment option and forfeiture of an aggregate of 562,500 founder shares.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a blank check company incorporated on January 28, 2021 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions directly or indirectly, with any business combination target with respect to an initial business combination with us. We may pursue an initial business combination target in any industry or geographic region. We intend to focus our search for an initial business combination on companies within the decarbonization sector. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the private placement of the private placement warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of this offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.
The issuance of additional shares in connection with a business combination to the owners of the target or other investors:
•
may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock;
•
may subordinate the rights of holders of Class A common stock if shares of preferred stock are issued with rights senior to those afforded our Class A common stock;
•
could cause a change in control if a substantial number of shares of our Class A common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
•
may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and
•
may adversely affect prevailing market prices for our Class A common stock and/or warrants.
Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:
•
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
•
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
•
our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
•
our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
•
our inability to pay dividends on our Class A common stock;
•
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
•
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
•
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
•
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
As indicated in the accompanying financial statements, at March 31, 2021, we had $874 in cash, deferred offering costs of $117,082, and a working capital deficit of $93,208 (excluding deferred offering costs). Further, we expect to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering.
Liquidity and Capital Resources
Our liquidity needs have been satisfied prior to the completion of this offering through a capital contribution from our sponsor of $25,000 in exchange for the issuance of the founder shares to our sponsor and up to $300,000 in loans available from our sponsor.
We estimate that the net proceeds from the sale of the units in this offering and the sale of the private placement warrants for an aggregate purchase price of $3,500,000 (or $3,725,000 if the underwriters’ over-allotment option is exercised in full), after deducting offering expenses of approximately $1,000,000 and underwriting commissions of $1,500,000 (or $1,725,000 if the underwriters’ over-allotment option is exercised in full) (excluding deferred underwriting commissions of $5,250,000, or $6,037,500 if the underwriters’ over-allotment option is exercised in full), will be $151,000,000 (or $173,500,000 if the underwriters’ over-allotment option is exercised in full). $150,000,000 (or $172,500,000 if the underwriters’ over-allotment option is exercised in full) will be held in the trust account, which includes the deferred underwriting commissions described above. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. The remaining approximately $1,000,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (excluding deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay our taxes. We estimate our annual franchise tax obligations, based on the number of shares of our common stock authorized and outstanding after the completion of this offering, to be $200,000, which is the maximum amount of annual franchise taxes payable by us as a Delaware corporation per annum, which we may pay from funds from this offering held outside of the trust account or from interest earned on the funds held in the trust account and released to us for this purpose. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the interest earned on
the amount in the trust account will be sufficient to pay our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completion of our initial business combination, we will have available to us the approximately $1,000,000 of proceeds held outside the trust account. We will use these funds to primarily identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.
We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business prior to our initial business combination. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
We expect our primary liquidity requirements during that period to include approximately $500,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; $75,000 for legal and accounting fees related to regulatory reporting requirements; $75,000 for Nasdaq and other regulatory fees; $75,000 for consulting, travel and miscellaneous expenses incurred during the search for a business combination target; and approximately $35,000 for general working capital that will be used for miscellaneous expenses and reserves. We will also pay our sponsor $10,000 per month for office space, secretarial and administrative services provided to members of our management team subsequent to the closing of this offering.
These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.
Moreover, we may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. In addition, we intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of this offering and the sale of the private placement units, and, as a result, if the cash portion of the purchase price exceeds the amount available from the trust account,
net of amounts needed to satisfy any redemptions by public stockholders, we may be required to seek additional financing to complete such proposed initial business combination. We may also obtain financing prior to the closing of our initial business combination to fund our working capital needs and transaction costs in connection with our search for and completion of our initial business combination. There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop agreements we may enter into following consummation of this offering. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Controls and Procedures
We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2022. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer and no longer an emerging growth company would we be required to comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.
Prior to the closing of this offering, we have not completed an assessment, nor has our independent registered public accounting firm tested our systems, of internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as:
•
staffing for financial, accounting and external reporting areas, including segregation of duties;
•
reconciliation of accounts;
•
proper recording of expenses and liabilities in the period to which they relate;
•
evidence of internal review and approval of accounting transactions;
•
documentation of processes, assumptions and conclusions underlying significant estimates; and
•
documentation of accounting policies and procedures.
Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expenses in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.
Once our management’s report on internal controls is complete, we will retain our independent registered public accounting firm to audit and render an opinion on such report when required by Section 404 of the Sarbanes-Oxley Act. The independent registered public accounting firm may identify additional issues concerning a target business’s internal controls while performing their audit of internal control over financial reporting.
Quantitative and Qualitative Disclosures about Market Risk
The net proceeds of this offering and the sale of the private placement warrants held in the trust account will be invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of March 31, 2021 and January 29, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have not conducted any operations to date.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firm’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the independent registered public accounting firm’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of this offering or until we are no longer an “emerging growth company,” whichever is earlier.
PROPOSED BUSINESS
We are a newly organized blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.
The Business Imperative
Decarbonizing the heavy industrial complex and transitioning the global energy mix to a lower carbon footprint is critical to delivering on the aspirations of governments, corporations and citizens alike for the massive carbon emission reductions required to avoid the worst consequences of global warming. The Biden Administration’s commitment to rejoin the Paris Agreement of 2015 provides further weight to this imperative and is likely to further accelerate investment in, and scaling of, decarbonization efforts.
The power and heavy industries are CO2 intensive and require significant energy use. The steel, cement, iron and chemicals industries alone account for over 50% of industrial energy use and 70% of direct industrial CO2 emissions. The long capital expenditure and investment cycles in heavy industries means that the timely availability of decarbonization solutions is critically important to achieving long-term sustainability targets.
Historically, the heavy industrial complex has significantly under-invested in technologies that improve productivity and, as a result, reduce the carbon intensity of a unit of production. According to a 2018 Deloitte global CIO survey, energy, resources, construction and infrastructure industries spent an average of 2% of revenue on information technology as compared to 4.6% for all other sectors. As a result, many heavy industrial companies have yet to benefit from the productivity enhancements, efficiencies and corresponding improved sustainability profile that the other sectors have from information technology solutions. We believe investments in energy transition technologies, services and products will help heavy industrial businesses improve their sustainability profile.
While we may pursue an initial business combination target in any stage of its corporate evolution or in any industry or sector, we intend to capitalize on the expertise and ability of our management team to identify and transact with a business that provides decarbonization and/or sustainability solutions to the global industrial complex.
Our Board of Directors and Management
Our sponsor is an affiliate of the AMCI group of companies. Established in 1986, AMCI Group (“AMCI”) is a privately held group that invests in and operates industrial businesses focused on natural resources, transportation, infrastructure, metals and energy. AMCI has invested over $1.7 billion in 40 industrial companies with operations spanning the globe. AMCI’s existing portfolio consists of 21 companies with approximately 8,000 employees and over $6 billion in annual revenue. AMCI takes an active role in its portfolio companies and uses its extensive operational experience in managing these businesses to build equity value through organic expansion, mergers and acquisitions and operational enhancements.
We are led by our management team of Nimesh Patel and Brian Beem, who serve as our Chief Executive Officer and President, respectively. Messrs. Patel and Beem are affiliated with our sponsor, AMCI. Over the course of their careers, Messrs. Patel and Beem have developed a broad international network of contacts and corporate relationships that we believe will serve as a critical source of investment opportunities. We will seek to capitalize on the global network and the operating experience of our management team to identify, acquire and operate one or more businesses or assets that provide decarbonization and/or sustainability solutions. Given the global nature of the business, we intend to pursue transactions within the United States, Canada, Europe and Australia.
Our management team has a multi-decade history of managing a global portfolio of businesses within the heavy industrial complex. AMCI’s portfolio companies are actively seeking and deploying new solutions to reduce their carbon footprints and improve the sustainability of their operations. Furthermore, we have
strong relationships with our ecosystem of partners (suppliers, logistics providers, commodity marketers, steel mills and battery manufacturers) who operate across the industrial value chain and are also working to identify and implement new solutions to decarbonize their own businesses.
Nimesh Patel has served as our Chief Executive Officer and Director since January 2021. Mr. Patel is a Managing Director, Co-head of Investments and a member of the Investment Committee for AMCI Group LLC, the holding company for the AMCI group of companies. Mr. Patel has served as a key member of AMCI’s senior management team for the past 13 years and has helped lead the investment business for AMCI. Since Mr. Patel joined the Investment Committee at AMCI, AMCI has invested $1.4 billion of its capital and approximately $0.5 billion of co-investor capital (from First Reserve Corporation, Riverstone Holdings LLC and Soros Fund Management) in 20 privately negotiated transactions in the global industrial, transportation and natural resources sectors. Furthermore, Mr. Patel has led the completion of multiple joint ventures with major global industrial corporations such as ITOCHU and POSCO, as well as debt and equity offerings. Mr. Patel was an officer of AMCI Acquisition Corp, a SPAC that successfully completed a business combination with Advent Technologies, Inc. on February 4, 2021. Mr. Patel has served on the Boards of Directors or represented AMCI’s equity interests in 8 companies during his time at AMCI and continues to serve on the Boards of Conuma Resources Ltd and Ridley Terminals Inc, amongst others.
Prior to joining AMCI, Mr. Patel was with Great Hill Partners where he focused on private equity investments in technology-enabled services companies. Previously Mr. Patel was with ChrysCapital, where he focused on private equity investments in the technology-enabled services, business process outsourcing and renewable energy sectors. Mr. Patel began his career in investment banking at Robertson Stephens, where he worked in the software group.
Mr. Patel graduated cum laude from Princeton University with an A.B. in Economics and with an M.B.A. from the Wharton School of the University of Pennsylvania.
Brian Beem has served as our President and Director since February 2021. Mr. Beem is a Managing Director, Co-head of Investments, and a member of the Investment Committee for AMCI Group LLC, the holding company for the AMCI group of companies. Mr. Beem has served as a key member of AMCI’s senior management team for the last 15 years and has helped lead the Investment business for AMCI. Since Mr. Beem joined the Investment Committee at AMCI, AMCI has invested $1.6 billion of its capital and approximately $0.7 billion of co-investor capital (from First Reserve Corporation, Riverstone Holdings LLC and Soros Fund Management LLC) in 30 privately negotiated transactions in the global industrial, transportation and natural resources sectors. In addition, Mr. Beem was an officer of AMCI Acquisition Corp, a SPAC that successfully completed a business combination with Advent Technologies, Inc. on February 4, 2021. Mr. Beem has served on the Boards of Directors of 14 companies during his time at AMCI and continues to serve on the Boards of Fitzroy QLD Resources Ltd and Jupiter Mines Ltd (ASX: JMS), amongst others. In his role overseeing investments for the AMCI Group, Mr. Beem has built a substantial global network in the industrial, mining, energy and transportation sectors.
Prior to joining AMCI, Mr. Beem worked at First Reserve Corporation, a leading private equity firm specializing in the energy industry. While at First Reserve, Mr. Beem worked on several co-investments with AMCI, including the formation of AMCI Capital L.P., an investment joint venture to which First Reserve committed $500 million and the founders of AMCI committed $300 million. Before joining First Reserve, Mr. Beem started his career at Merrill Lynch in New York, where he worked in the financial sponsors and energy & power groups in the investment banking division.
Mr. Beem graduated cum laude from Princeton University in 2002 with an A.B. in Politics.
Patrick Murphy has served as our Chief Financial Officer since January 2021. Mr Murphy is a Managing Director for AMCI Group LLC, the holding company for the AMCI group of companies. He is a key senior member of the investment team with responsibility for a number of AMCI portfolio investments across multiple jurisdictions. He leads AMCI’s iron ore business and its joint venture business relationships with the global industrial groups China BaoWu Steel and POSCO. Mr Murphy represents AMCI’s interests and serves on the Boards of Directors of a number of companies including Australian Premium Iron Pty Ltd, Juno Minerals Limited and Minero Las Cenizas.
Mr. Murphy joined AMCI in 2018 after spending the previous 11 years in the global investment group at Macquarie as a Managing Director in Mining Finance, Commodities & Global Markets. Mr. Murphy specialized in deploying Macquarie’s balance sheet across the capital spectrum inclusive of passive and active equity investments, structured debt, greenfield project finance, structured derivative lending and commodity hedging. Mr. Murphy holds a Bachelor of Laws and a Bachelor of Commerce from The University of Western Australia.
Hans Mende has served on our board of directors since January 2021. Mr. Mende co-founded AMCI in 1986, with nominal capital, growing the company into a multi-billion dollar global enterprise with activities in commodity investing, operations and trading. During his career, Mr. Mende has been a member of the Board of Directors of numerous public and private natural resources companies, including Whitehaven (ASX:WHC) from 2007 to 2012, Felix Resources Limited (FLX:AX) from 2007 to 2010, Alpha Natural Resources (NYSE:ANR) from 2003 to 2007, Foundation Coal Holdings, Inc. from 2004 to 2005 and New World Resources PLC (WSE:NWR) from 2011 to 2012. In addition, Mr. Mende was the Executive Chairman of AMCI Acquisition Corp, a SPAC that successfully completed a business combination with Advent Technologies, Inc. on February 4, 2021. Mr. Mende currently serves as director of Jupiter Mines Ltd (ASX: JMS) and Ridley Terminals, Inc, amongst others.
Prior to founding AMCI Group in 1986, Mr. Mende served at Thyssen Group in various senior executive positions including President of Thyssen Carbometal Inc. from 1968 to 1986.
Mr. Mende holds an M.B.A from Cologne University in Germany. Mr. Mende is well-qualified to serve on our Board of Directors due to his extensive operational, industry and public and private company experience.
Mark Pinho will serve on our board of directors following the effectiveness of the registration statement of which this prospectus forms a part. Mr. Pinho is the Managing Partner at St. Victor Group (SVG) and a Co-Founder/Partner at 4x4 Capital. Mr. Pinho leads SVG in its focus on making longer duration, structured corporate investments in partnership with management and family owners. Mr. Pinho also currently serves as a Partner for 4x4 Capital, an operationally focused investment and management platform focused on building-long term value for middle market companies.
Prior to SVG and 4x4 Capital, Mr. Pinho was a Managing Director for twelve years in the private equity group of Soros Fund Management, a $20 billion private investment management firm serving as the principal investment advisor to funds associated with the Soros family and related charitable foundations. Prior to his time at Soros, Mr. Pinho spent four years in middle market growth equity and buyout with BCI partners and LiveWire Capital.
Mr. Pinho graduated from the University of Virginia with a B.S. from the McIntire School and earned an MBA from the Wharton School of Business at the University of Pennsylvania.
Dr. Adrian Paterson will serve on our board of directors following the effectiveness of the registration statement of which this prospectus forms a part. Dr. Paterson is the Principal and Founder of Siyeva Consulting. Prior to founding Siyeva in 2021, Dr. Paterson worked as CEO for Australia’s Nuclear Science and Technology Organization (ANSTO), one of Australia’s largest public research organizations and recognized as an international player in nuclear science and technology. During his time at ANSTO, Dr. Paterson had strategic oversight and responsibility for ANSTO’s multi-faceted portfolio of activities, including securing funding and operating the Australian Synchrotron, a major research facility serving as an innovation hub in southeast Melbourne. Dr. Paterson ensured integrated operations for the Open Pool Australian Light-Water (OPAL) Reactor at ANSTO — which provides isotopes for medical diagnosis and treatment, access to neutrons for science and irradiation services for Australian and overseas users — ultimately becoming one of the most productive reactors in its class globally.
In addition to his time at ANSTO, Dr. Paterson has experience in key policy areas as a fellow of the Australian Academy of Technology and Engineering (ATSE), Engineers Australia (EA) and the Royal Society of New South Wales.
Dr. Paterson holds a BSc in Chemistry and a PhD in Engineering, both from the University of Cape Town and an Honorary Doctor of Science from the University of Wollongong
Jill Watz will serve on our board of directors following the effectiveness of the registration statement of which this prospectus forms a part. Ms. Watz is Managing Director of Ascian Technology Advisors, LLC, offering advisory services on business strategy, technology development, operational management and financing for early and growth-stage companies in the energy technology and natural resource sectors providing services to family offices, private equity funds, sovereign wealth funds, foundations and start-up companies. Additionally, Ms. Watz is a Senior Advisor to AltaRock Energy, a Khosla Ventures backed geothermal technology development company based in Seattle, WA and focused on bringing the next generation of advanced geothermal resources to scale.
Previously, from 2008-2014, Ms. Watz served as a Venture Partner for Vulcan Capital, a Seattle based private wealth management group with over $10 billion of assets under management, where she was responsible for investment strategy, due diligence and portfolio management in the clean technology sector. From 2006-2010, Ms. Watz served as a Climate Change Director for Vulcan, Inc., Paul G. Allen’s family office, where she was responsible for integration of climate programs across the Vulcan portfolio including: Vulcan Real Estate, Paul G Allen Family Foundation and all related corporate affiliates. Ms. Watz served on the staff of Lawrence Livermore National Laboratory from 1994-2005 in a variety of research and management roles for science and technology development in national security, intelligence, energy and climate.
Ms. Watz has a B.S. degree in Chemical Engineering from University of California and S.M. degrees in both Civil and Environmental Engineering and Technology and Policy from Massachusetts Institute of Technology.
Kate Burson will serve on our board of directors following the effectiveness of the registration statement of which this prospectus forms a part. Ms. Burson is the Principal and Founder of KCB Advisers where she works with seed to growth stage clean technology companies (energy, mobility, and natural resource management) on growth, market development, market entry and business development strategies.
Previously, Ms. Burson worked at Tesla where she was among the first commercial hires for its energy business. Ms. Burson led market entry, policy, and business development for energy storage across the east coast. Prior to joining Tesla, Ms. Burson co-led energy policy for New York state. Ms. Burson developed and deployed a new strategy for a distributed, networked electric grid — powered by clean energy. Her initiative grew into the State’s Reforming the Energy Vision, REV, which Ms. Burson co-developed and managed.
Ms. Burson graduated magna cum laude from Vanderbilt University with a B.A. in History and earned a J.D. from Washington University in St. Louis.
AMCI also has prior experience managing and investing through special purpose acquisition companies. In June 2018, AMCI formed AMCI Acquisition Corp. (“AMCI I”), a blank check company formed for substantially the same purposes as our company. AMCI I aimed to capitalize on AMCI’s 30 years of experience in the natural resources and mining equipment, technology and services sectors. Through its initial public offering in November 2018, AMCI I raised gross proceeds of $200 million from the sale of 20 million units to public investors (the “AMCI I Units”), with each unit consisting of one share of Class A common stock of AMCI I and one warrant of AMCI I (the “AMCI I IPO”). Simultaneously with the consummation of the AMCI I IPO, AMCI I consummated the sale of 5,500,000 private placement warrants of AMCI I at a price of $1.00 per warrant ($5,500,000 in the aggregate) in a private placement to its sponsor, AMCI Sponsor LLC. On November 27, 2018, the underwriters of the AMCI I IPO (the “AMCI I Underwriters”) partially exercised their over-allotment option and purchased an additional 2,052,077 AMCI I Units, which resulted in additional gross proceeds of approximately $20.5 million. On November 27, 2018, simultaneously with the partial exercise of the AMCI I Underwriters’ over-allotment option, AMCI I consummated the sale of an additional 410,416 private placement warrants at a price of $1.00 ($410,416 in the aggregate) in a private placement with the Sponsor.
On October 12, 2020, AMCI I entered into an Agreement and Plan of Merger with Advent Technologies, Inc. (“Advent”), an innovation-driven company in the fuel cell and hydrogen technology space, pursuant to which, on February 4, 2021, a newly formed Delaware subsidiary of AMCI I merged with and into Advent, with Advent continuing as the surviving corporation and a wholly-owned subsidiary of AMCI I (the “Merger”). In connection with the Merger, AMCI I raised approximately $65 million through a private
placement of shares of its Class A common stock at a price of $10.00 per share. Upon the consummation of the Merger, AMCI I was renamed Advent Technologies Holdings, Inc., and its common stock and warrants began trading on Nasdaq under the symbols “ADN” and “ADNW”, respectively.
We believe the combination of these factors and our team’s deep understanding of the challenges facing the global industrial complex, as well as considerable time spent navigating the complex regulatory environment in which they operate, provides us with a significant competitive advantage to identify and evaluate investment opportunities to decarbonize this industry.
With respect to the foregoing experience of our management team, including with respect to AMCI I, past performance is not a guarantee (i) that we will be able to identify a suitable candidate for our initial business combination, or (ii) of success with respect to any business combination we may consummate. You should not rely on the historical record of our management team’s performance as indicative of our future performance. See the section of this prospectus entitled “Management” for a more complete description of our team’s experience.
Market Opportunity
We believe that the current backdrop for investing in sustainability and decarbonization presents a compelling opportunity set for the company. Over the past few years, we believe that there has been an increasing global focus on sustainability that is creating attractive and scalable commercial opportunities across many sectors, including clean energy and power, transportation, resource management, environmental services, other heavy industries and technology enabled sustainable solutions. As governments, corporations and investors have announced emissions targets in recent years, the amount of capital required to achieve these targets represents a step-change increase in capital investment levels across a wide range of subsectors and will lead to attractive investment opportunities centered around the themes of sustainability, decarbonization and energy transition.
Given the scale and difficulty of the challenge, we believe that companies that can provide creative solutions to the problems of decarbonization and sustainability in heavy industry will earn attractive returns over a long period of time. We believe that our management team is well positioned to access and identify such companies because of its experience and network in the global industrial economy.
We believe the opportunity in decarbonation and sustainability solutions is now being made possible by a confluence of favorable trends:
1.
Increasingly widespread commitment to decarbonization and sustainability is driving demand for solutions:
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Demand for decarbonization solutions has been growing due to government targets to achieve net-zero carbon emissions. In fact, countries now accounting for more than 60% of global carbon emissions have expressed ambitions targeting net-zero carbon emissions by the middle of this century. As a result, national and local governments are legislating a myriad of public policies to help achieve long-term emissions objectives. One such policy was announced on September 23, 2020, when the Governor of the State of California signed Executive Order N-79-20, ordering that it is a goal of the State of California that by 2035 all new passenger cars and trucks sold in the state will be zero-emission vehicles. Southern California Edison estimates that from 2030 to 2045, grid investments of up to $75 billion will be required, in part, to serve the load growth associated with transportation and building electrification.
•
As of February 2021, over 1,500 companies globally, with a combined market capitalization of approximately $25 trillion, have already announced long-term commitments and bold actions to accelerate the net-zero carbon goal across their business operations and, in many cases, across their third-party supply chains. As a result of this widespread commitment to sustainability, we expect to see global companies of all sizes increase the size, speed and scope of their initiatives to decarbonize and improve the sustainability of their businesses.
2.
Recognition that significant incremental capital will need to be invested in infrastructure and technology to keep pace with demand:
•
With respect to the infrastructure supporting energy transition, even as renewables in Europe generated more electricity than fossil fuels in 2020, the European Green Deal requires 100 terawatt-hours (“TWh”) of annual additions of renewables, which is double the deployment speed seen in 2020. The International Energy Agency (the “IEA”) has estimated that approximately $59 trillion of capital would need to be invested through 2070 and the Intergovernmental Panel on Climate Change (the “IPCC”) estimates that annual investments in clean energy and energy efficiency would need to increase six times by 2050 compared to 2015 to adhere to the Paris Agreement of 2015 and the 2-degrees scenario, which aims to limit global warming to 2 degrees Celsius by 2100 from pre-industrial levels, with annual investments of $3.0 trillion needed through 2035.
•
Significant investments in technology that can be deployed at scale and at reduced costs versus incumbent processes are quickly becoming the norm in traditionally carbon intensive industries. For example, on November 19, 2020, General Motors Co. announced a commitment to invest more than $27 billion in electric and autonomous vehicle development, a significant portion of which will be used to reduce the cost of its electric vehicle batteries by 60% and double their energy capacity, allowing General Motors Co. to make electric vehicles more widely affordable and convenient for consumers in the transportation end market. On January 28th, General Motors Co. announced they would completely globally phase out internal combustion engines from their portfolio by 2035.
3.
Near-term advancements in innovation and the maturation of technology are providing attractive investment opportunities for investors:
•
As demand for new solutions continues to outpace the rate of technology innovation and maturation, we believe that businesses that provide real solutions have the potential to yield significant returns for stockholders. For example, as measured by the IEA, as of October 2020, major renewable energy equities outperformed the energy sector on the whole as well as numerous various major international stock market indices.
The market for sustainability solutions remains fragmented, and we believe appropriate capital investments can accelerate technology maturation and create significant growth opportunities for businesses in the space. According to industry source Pitchbook, there were over 21,500 companies operating in the broadly defined sustainability industry as of February 2021. Furthermore, this fragmentation suggests there are a substantial number of actionable opportunities with the required scale that fit our acquisition criteria.
Business Strategy
Our acquisition and value creation strategy will be to identify, acquire and, after our initial business combination, build a company that provides sustainability, energy transition and/or decarbonization solutions to the industrial complex. To date, energy transition focused investments have been mostly centered on electricity conversions or substitutions from coal, oil and natural gas to renewables, principally wind and solar, and the transition from internal combustion engines to electric vehicles. AMCI believes that the addressable universe to improve sustainability and decarbonization of the global industrial complex must extend beyond electricity and personal transportation.
In addition to the need to decarbonize, the legacy global industrial complex remains under-invested in the application of digitization and efficiency to industrial processes or supply chains. The adaptation of these technologies will provide enormous improvement potential in the carbon emissions profile, the sustainability of the global economy as well as profitability to stakeholders in the global industrial economy.
Our acquisition strategy will leverage AMCI’s network of proprietary and public transaction sources where we believe a combination of our relationships, knowledge and experience in heavy industries could effect a positive transformation or augmentation of existing businesses or properties. We will seek an opportunity in which our capital and involvement can promptly improve a target company’s growth trajectory. Our goal is to build a focused business with a clear value proposition and competitive advantages in a growing market to generate attractive returns for our investors.
We plan to utilize the network and industry experience of our management team and AMCI in seeking an initial business combination and employing our acquisition strategy. In addition to industry and lending community relationships, we plan to leverage relationships with management teams of public and private companies, investment bankers, venture capitalists and growth private equity investors, which we believe should provide us with numerous business combination opportunities. Upon the consummation of this offering, members of our management team and AMCI will communicate with their networks of relationships to articulate the parameters of our search for a target business and a potential business combination and begin the process of pursuing and reviewing potential leads.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, executive officers or directors, or completing the business combination through a joint venture or other form of shared ownership with our sponsor, executive officers or directors. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm stating that such an initial business combination is fair to our company from a financial point of view.
Members of our management team and our independent directors will directly or indirectly own founder shares and/or private placement warrants following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such other entity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.
In addition, our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, executive officers or directors, or completing the business combination through a joint venture or other form of shared ownership with our sponsor, executive officers or directors. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm stating that such an initial business combination is fair to our company from a financial point of view.
Members of our management team and our independent directors will directly or indirectly own founder shares and/or private placement warrants following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a
conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such other entity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.
In addition, our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
Initial Business Combination
Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the net assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of signing a definitive agreement in connection with our initial business combination. We refer to this as the 80% of net assets test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, with respect to the satisfaction of such criteria. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or
acquired is what will be taken into account for purposes of the 80% of net assets test described above. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.
Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
Financial Position
With funds available for a business combination initially in the amount of $144,750,000 (assuming no redemptions), after payment of $5,250,000 of deferred underwriting fees (or $166,462,500 (assuming no redemptions) after payment of $6,037,500 of deferred underwriting fees if the underwriters’ over-allotment option is exercised in full), we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third-party financing and there can be no assurance it will be available to us.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:
•
subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and
•
cause us to depend on the marketing and sale of a single product or limited number of products or services.
Limited Ability to Evaluate the Target’s Management Team
Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit
additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Stockholders May Not Have the Ability to Approve Our Initial Business Combination
We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated certificate of incorporation. However, we will seek stockholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons.
Presented in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction.
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TYPE OF TRANSACTION
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WHETHER
STOCKHOLDER
APPROVAL IS
REQUIRED
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Purchase of assets
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No |
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Purchase of stock of target not involving a merger with the company
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No |
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Merger of target into a subsidiary of the company
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No |
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Merger of the company with a target
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Yes |
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Under Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:
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We issue shares of common stock that will be equal to or in excess of 20% of the number of our shares of common stock then outstanding (other than in a public offering);
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Any of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest earned on the trust account (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding common stock or voting power of 5% or more; or
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The issuance or potential issuance of common stock will result in our undergoing a change of control.
Permitted Purchases of Our Securities
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or public warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.
In the event that our sponsor, initial stockholders, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the
going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.
The purpose of any such purchases of shares could be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our Class A common stock or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, initial stockholders, officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom our initial stockholders, officers, directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders (in the case of Class A common stock) following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such stockholder has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the stockholder meeting related to our initial business combination. Our sponsor, executive officers, directors, advisors or any of their affiliates will select which stockholders to purchase shares from based on a negotiated price and number of shares and any other factors that they may deem relevant, and will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws. Our sponsor, officers, directors and/or their affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. We expect any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases are subject to such reporting requirements.
Redemption Rights for Public Stockholders upon Completion of Our Initial Business Combination
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations and on the conditions described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our initial stockholders, sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares they may hold in connection with the completion of our initial business combination.
Limitations on Redemptions
Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash consideration we would
be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares in connection with such initial business combination, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements we may enter into following consummation of this offering, in order to, among other reasons, satisfy such net tangible assets or minimum cash requirements.
Manner of Conducting Redemptions
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the initial business combination or (ii) without a stockholder vote by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed initial business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing requirements. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with Nasdaq’s stockholder approval rules.
The requirement that we provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above will be contained in provisions of our amended and restated certificate of incorporation and will apply whether or not we maintain our registration under the Exchange Act or our listing on Nasdaq. Such provisions may be amended if approved by holders of 65% of our common stock entitled to vote thereon.
If we provide our public stockholders with the opportunity to redeem their public shares in connection with a stockholder meeting, we will:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and
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file proxy materials with the SEC.
If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the Company representing a majority of the voting power of all outstanding shares of capital stock of the Company entitled to vote at such meeting. Our initial stockholders will count towards this quorum and, pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote any founder shares they hold and any public shares purchased during or after this offering (including in open market and privately-negotiated transactions) in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares, we would need 5,625,001 or 37.5%, of the 15,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction or whether they were a stockholder on the record date for the stockholder meeting held to approve the proposed transaction.
If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and
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file tender offer documents with the SEC prior to completing our initial business combination, which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act.
We intend to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to, at the holder’s option, either deliver their stock certificates to our transfer agent or deliver their shares to our transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system, prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days prior to the date on which the vote on the proposal to approve the initial business combination is to be held. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is included. The proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or action from the redeeming public stockholders, which could delay redemptions and result in additional administrative cost. If the proposed initial business combination is not approved and we continue to search for a target company, we will promptly return any certificates or shares delivered by public stockholders who elected to redeem their shares.
Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares in connection with such initial business combination, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements we may enter into following consummation of this offering, in order to, among other reasons, satisfy such net tangible assets or minimum cash requirements.
Limitation on Redemption Upon Completion of Our Initial Business Combination If We Seek Stockholder Approval
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares, without our prior consent. We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares sold in this offering without our prior consent, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Delivering Stock Certificates in Connection with the Exercise of Redemption Rights
As described above, we intend to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to, at the holder’s option, either deliver their stock certificates to our transfer agent or deliver their shares to our transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system, prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days prior to the date on which the vote on the proposal to approve the initial business combination is to be held. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is included. The proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have up to two business days prior to the vote on the initial business combination if we distribute proxy materials, or from the time we send out our tender offer materials until the close of the tender offer period, as applicable, to submit or tender its shares if it wishes to seek to exercise its redemption rights. In the event that a stockholder fails to comply with these or any other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the broker submitting or tendering shares a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to submit or tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
Any request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the proxy materials or tender offer documents, as applicable. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to
holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed initial business combination is not completed, we may continue to try to complete an initial business combination with a different target until 24 months from the closing of this offering.
Redemption of Public Shares and Liquidation if No Initial Business Combination
Our amended and restated certificate of incorporation provides that we will have only 24 months from the closing of this offering to complete our initial business combination. If we are unable to complete our initial business combination within such 24-month period from the closing of this offering or during any Extension Period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 24-month time period or during any Extension Period.
Our initial stockholders, sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering or during any Extension Period. However, if our initial stockholders, sponsor or management team acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted 24-month time period.
Our initial stockholders, sponsor, officers and directors have agreed, pursuant to a letter agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset requirement, we would not proceed with the amendment or the related redemption of our public shares at such time.
We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately $1,000,000 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account
not required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds of this offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account and any tax payments or expenses for the dissolution of the trust, the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will consider whether competitive alternatives are reasonably available to us and will only enter into an agreement with such third party if management believes that such third party’s engagement would be in the best interests of the company under the circumstances. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. The underwriters of this offering and our independent registered public accounting firm will not execute agreements with us waiving such claims to the monies held in the trust account. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes payable, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00 per share.
We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to approximately $1,000,000 from the proceeds of this offering with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors. In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the closing of this offering may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the closing of this offering, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we are unable to complete our initial business combination within 24 months from the closing of this offering, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate,
subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 24th month and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.
Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims.
If we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public stockholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering, (ii) in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity or (iii) if they redeem their respective shares for cash upon the completion of our initial business combination. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial business combination, a stockholder’s voting in connection with the business combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights described above. These provisions of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote.
Comparison of Redemption or Purchase Prices in Connection with Our Initial Business Combination and if We Fail to Complete Our Initial Business Combination.
The following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion of our initial business combination and if we are unable to complete our initial business combination within 24 months from the closing of this offering.
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Redemptions in Connection
with our Initial Business
Combination
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Other Permitted Purchases
of Public Shares by our
Affiliates
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Redemptions if we fail to
Complete an Initial Business
Combination
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Calculation of redemption price
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Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a stockholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder vote. In either case, our public stockholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.00 per share), including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001.
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If we seek stockholder approval of our initial business combination, our initial stockholders, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following completion of our initial business combination. There is no limit to the prices that our initial stockholders, directors, officers, advisors or their affiliates may pay in these transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such
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If we are unable to complete our initial business combination within 24 months from the closing of this offering, we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount, then on deposit in the trust account (which is initially anticipated to be $10.00 per share), including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares.
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Redemptions in Connection
with our Initial Business
Combination
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Other Permitted Purchases
of Public Shares by our
Affiliates
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Redemptions if we fail to
Complete an Initial Business
Combination
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rules.
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Impact to remaining stockholders
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The redemptions in connection with our initial business combination will reduce the book value per share for our remaining stockholders, who will bear the burden of the deferred underwriting commissions and interest withdrawn in order to pay our taxes (to the extent not paid from amounts accrued as interest on the funds held in the trust account).
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If the permitted purchases described above are made, there would be no impact to our remaining stockholders because the purchase price would not be paid by us.
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The redemption of our public shares if we fail to complete our initial business combination will reduce the book value per share for the shares held by our initial stockholders, who will be our only remaining stockholders after such redemptions.
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Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419
The following table compares the terms of this offering to the terms of an offering by a blank check company subject to the provisions of Rule 419. This comparison assumes that the gross proceeds, underwriting commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company subject to Rule 419, and that the underwriters will not exercise their over-allotment option. None of the provisions of Rule 419 apply to our offering.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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Escrow of offering proceeds
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$150,000,000 of the net proceeds of this offering and the sale of the private placement warrants will be deposited into a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee.
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Approximately $127,575,000 of the offering proceeds, representing the gross proceeds of this offering, would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account.
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Investment of net proceeds
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$150,000,000 of the net proceeds of this offering and the sale of the private placement warrants held in trust will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.
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Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States.
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Receipt of interest on escrowed funds
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Interest on proceeds from the trust account to be paid to stockholders is reduced by (i) any taxes paid or payable and (ii) in the event of our liquidation for failure to complete our initial business combination within the allotted time, up
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Interest on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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to $100,000 of net interest that may be released to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation.
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Limitation on fair value or net assets of target business
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We must complete one or more business combinations having an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination.
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The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds.
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Trading of securities issued
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The units are expected to begin trading on or promptly after the date of this prospectus. The Class A common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless the representative informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin.
We will file the Current Report on Form 8-K promptly after the closing of this offering, which closing is anticipated to take place three business days from the date of this prospectus. If the over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the over-allotment option.
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No trading of the units or the underlying Class A common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.
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Exercise of the warrants
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The warrants cannot be exercised until 30 days after the completion of our initial business combination.
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The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account.
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Election to remain an investor
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We will provide our public stockholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business
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A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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combination, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, upon the completion of our initial business combination, subject to the limitations described herein. We may not be required by law to hold a stockholder vote. If we are not required by law and do not otherwise decide to hold a stockholder vote, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, we hold a stockholder vote, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek stockholder approval, we will complete our initial business combination only if a majority of the shares of common stock voted are voted in favor of the business combination. Additionally, each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction.
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business days from the effective date of a post-effective amendment to the company’s registration statement, to decide if he, she or it elects to remain a stockholder of the company or require the return of his, her or its investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the stockholder. Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities are issued.
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Business combination deadline
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If we are unable to complete an initial business combination within 24 months from the closing of this offering, we will(i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as
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If an acquisition has not been completed within 18 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and in all cases subject to the requirements of other applicable law.
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Release of funds
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Except for the withdrawal of interest to pay our taxes, none of the funds held in trust will be released from the trust account until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we are unable to complete our initial business combination within 24 months from the closing of this offering, subject to applicable law, and (iii) the redemption of our public shares properly submitted in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity.
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The proceeds held in the escrow account are not released until the earlier of the completion of a business combination or the failure to effect a business combination within the allotted time.
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Delivering stock certificates in connection with the exercise of redemption rights
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We intend to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to, at the holder’s option, either deliver their stock certificates to our transfer agent or deliver their shares to our transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system, prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days prior to the date on which the vote on the proposal to approve the initial business combination is to be held. In addition, if we conduct redemptions in
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Many blank check companies provide that a stockholder can vote against a proposed business combination and check a box on the proxy card indicating that such stockholder is seeking to exercise its redemption rights. After the business combination is approved, the company would contact such stockholder to arrange for delivery of its share certificates to verify ownership.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is included. The proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have up to two business days prior to the vote on the initial business combination if we distribute proxy materials, or from the time we send out our tender offer materials until the close of the tender offer period, as applicable, to submit or tender its shares if it wishes to seek to exercise its redemption rights.
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Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold a stockholder vote
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If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares, without our prior consent. However, we would not restrict our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
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Many blank check companies provide no restrictions on the ability of stockholders to redeem shares based on the number of shares held by such stockholders in connection with an initial business combination.
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Competition
In identifying, evaluating and selecting a target business for our initial business combination, we may encounter competition from other entities having a business objective similar to ours, including other special purpose acquisition companies, private equity groups and leveraged buyout funds, public companies and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our
obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
We currently utilize office space at 600 Steamboat Road, Greenwich, Connecticut 06830 from our sponsor and the members of our management team. We consider our current office space adequate for our current operations.
Employees
We currently have three executive officers: Nimesh Patel, Brian Beem and Patrick Murphy. These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the stage of the business combination process we are in. We do not intend to have any full time employees prior to the completion of our initial business combination.
Periodic Reporting and Financial Information
We will register our units, Class A common stock and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public accountants.
We will provide stockholders with audited financial statements of the prospective target business as part of the proxy solicitation materials or tender offer documents sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential target businesses we may conduct an initial business combination with because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential business combination candidate will have financial statements prepared in accordance with the requirements outlined above, or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to have our internal control procedures audited. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.
Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our shares of Class A common stock that are held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Legal Proceedings
There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
MANAGEMENT
Officers, Directors and Director Nominees
Our officers, directors and director nominees are as follows:
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Name
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Age
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Position
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Nimesh Patel
|
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44
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Chief Executive Officer
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Brian Beem
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41
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President and Director
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Patrick Murphy
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36
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Chief Financial Officer
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Hans Mende
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77
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Director
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Mark Pinho
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44
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Director Nominee
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Jill Watz
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57
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Director Nominee
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Adrian Paterson
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64
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Director Nominee
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Kate Burson
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41
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Director Nominee
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Nimesh Patel, 44, has served as our Chief Executive Officer and Director since January 2021. Mr. Patel is a Managing Director, Co-head of Investments and a member of the Investment Committee for AMCI Group LLC, the holding company for the AMCI group of companies. Mr. Patel has served as a key member of AMCI’s senior management team since January 2008 and has helped lead the investment business for AMCI. Since Mr. Patel joined the Investment Committee at AMCI, AMCI has invested $1.4 billion of its capital and approximately $0.5 billion of co-investor capital (from First Reserve Corporation, Riverstone Holdings LLC and Soros Fund Management) in 20 privately negotiated transactions in the global industrial, transportation and natural resources sectors. Furthermore, Mr. Patel has led the completion of multiple joint ventures with major global industrial corporations such as ITOCHU Corporation and POSCO, as well as debt and equity offerings. Mr. Patel was an officer of AMCI Acquisition Corp., a SPAC that successfully completed a business combination with Advent Technologies, Inc. in February 2021. Mr. Patel has served on the Boards of Directors or represented AMCI’s equity interests in 8 companies during his time at AMCI and has served on the Board of Directors for Conuma Resources Ltd since April 2017.
Prior to joining AMCI, Mr. Patel was with Great Hill Partners where he focused on private equity investments in technology-enabled services companies. Previously Mr. Patel was with ChrysCapital, where he focused on private equity investments in the technology-enabled services, business process outsourcing and renewable energy sectors. Mr. Patel began his career in investment banking at Robertson Stephens, where he worked in the software group.
Mr. Patel graduated cum laude from Princeton University with an A.B. in Economics and with an M.B.A. from the Wharton School of the University of Pennsylvania. We believe that Mr. Patel is qualified to serve as our Chief Executive Officer and Director because of his depth of experience in the investment sector.
Brian Beem, 41, has served as our President and Director since January 2021. Mr. Beem is a Managing Director, Co-head of Investments and a member of the Investment Committee for AMCI Group LLC, the holding company for the AMCI group of companies. Mr. Beem has served as a key member of AMCI’s senior management team for the last 15 years and has helped lead the Investment business for AMCI. Since Mr. Beem joined the Investment Committee at AMCI, AMCI has invested $1.6 billion of its capital and approximately $0.7 billion of co-investor capital (from First Reserve Corporation, Riverstone Holdings LLC and Soros Fund Management) in 30 privately negotiated transactions in the global industrial, transportation and natural resources sectors. In addition, Mr. Beem was an officer of AMCI Acquisition Corp, a SPAC that successfully completed a business combination with Advent Technologies, Inc. in February 2021. Mr. Beem has served on the Boards of Directors of 14 companies during his time at AMCI. Mr. Beem has served on the Board of Jupiter Mines Ltd (ASX: JMS) since October 2019. In his role overseeing investments for the AMCI Group, Mr. Beem has built a substantial global network in the industrial, mining, energy and transportation sectors.
Prior to joining AMCI, Mr. Beem worked at First Reserve Corporation, a leading private equity firm specializing in the energy industry. While at First Reserve, Mr. Beem worked on several co-investments with
AMCI, including the formation of AMCI Capital L.P., an investment joint venture to which First Reserve committed $500 million and the founders of AMCI committed $300 million. Before joining First Reserve, Mr. Beem started his career at Merrill Lynch in New York, where he worked in the financial sponsors and energy & power groups in the investment banking division.
Mr. Beem graduated cum laude from Princeton University with an A.B. (Bachelor of Arts) in Politics. We believe that Mr. Beem is qualified to serve on our board of directors because of his depth of experience in both the investment sector and serving on numerous boards.
Patrick Murphy, 36, has served as our Chief Financial Officer since January 2021. Mr. Murphy is a Managing Director for AMCI Group LLC, the holding company for the AMCI group of companies. He is a key senior member of the investment team with responsibility for a number of AMCI portfolio investments across multiple jurisdictions. He leads AMCI’s iron ore business and its joint venture business relationships with the global industrial groups China BaoWu Steel and POSCO. Mr. Murphy represents AMCI’s interests and serves on the Boards of Directors of a number of companies including Australian Premium Iron Pty Ltd, Juno Minerals Limited and Minero Las Cenizas
Mr. Murphy joined AMCI in 2018 after spending the previous 11 years in the global investment group at Macquarie as a Managing Director in Mining Finance, Commodities & Global Markets division. Mr. Murphy specialized in deploying Macquarie’s balance sheet across the capital spectrum inclusive of passive and active equity investments, structured debt, greenfield project finance, structured derivative lending and commodity hedging. Mr. Murphy holds a Bachelor of Laws and a Bachelor of Commerce from The University of Western Australia.
Hans Mende, 77, has served on our board of directors since January 2021. Mr. Mende co-founded AMCI in 1986, with nominal capital, growing the company into a multi-billion dollar global enterprise with activities in commodity investing, operations and trading. During his career, Mr. Mende has been a member of the Board of Directors of numerous public and private natural resources companies, including Whitehaven (ASX:WHC) from 2007 to 2012, Felix Resources Limited (FLX:AX) from 2007 to 2010, Alpha Natural Resources (NYSE:ANR) from 2003 to 2007, Foundation Coal Holdings, Inc. from 2004 to 2005 and New World Resources PLC (WSE:NWR) from 2011 to 2012. In addition, Mr. Mende was the Executive Chairman of AMCI Acquisition Corp., a SPAC that successfully completed a business combination with Advent Technologies, Inc. on February 4, 2021. Mr. Mende currently serves as director of Jupiter Mines Ltd (ASX: JMS) and Ridley Terminals Inc, amongst others. Mr. Mende has served as a Director of Jupiter Mines Ltd (ASX: JMS) since October 2019.
Prior to founding AMCI Group in 1986, Mr. Mende served at Thyssen Group in various senior executive positions including President of Thyssen Carbometal Inc. from 1968 to 1986.
Mr. Mende holds an M.B.A from Cologne University in Germany. We believe that Mr. Mende is well-qualified to serve on our Board of Directors due to his operational, industry and public and private company experience.
Mark Pinho, 44, will serve as an independent director following the effectiveness of the registration statement of which this prospectus forms a part. Mr. Pinho has been the managing partner of the St. Victor Group (“SVG”), a private investment vehicle focused on making longer duration, structured corporate investments in partnership with management and family owners, since January 1, 2018. In addition, Mr. Pinho has been a managing director in the private equity group of Soros Fund Management LLC since May 2006. Mr. Pinho has also worked as Partner of 4x4 Capital LLC since January 1, 2018. Mr. Pinho also spent four years in the middle market growth equity. Mr. Pinho has previously served on the board for Mastro’s Restaurants LLC from May 2007 to May 2013. Mr. Pinho holds a Bachelor of Science from the University of Virginia and an M.B.A. from the Wharton School of Business at the University of Pennsylvania. We believe that Mr. Pinho is qualified to serve on our Board of Directors due to his financial knowledge and experience.
Jill Watz, 57, will serve as an independent director following the effectiveness of the registration statement of which this prospectus forms a part. Ms. Watz has over 25 years of experience in energy and environmental technology, business and policy. Ms. Watz has been the founder and Managing Director at Ascian Technology Advisors, LLC (“Ascian”), a business advisory firm focused on business strategy,
technology development, operational management and financing for early and growth-stage companies in the energy technology and natural resource sectors, since November 2012. From 2008 to 2014, Ms. Watz was a Venture Partner at Vulcan Capital, where she was responsible for investment strategy, due diligence and portfolio management in the clean technology sector, with specific emphasis on solar, geothermal, nuclear, advanced materials, energy efficiency/smart grid technologies and emerging market distributed electricity generation. Ms. Watz has served on or as an advisor to the boards of several early stage clean-tech companies and has worked with several non-profit organizations to develop climate change mitigation advocacy strategies. Ms. Watz spent ten years on the technical staff at Lawrence Livermore National Laboratory (“LLNL”), where she held senior management and technical research positions in applied energy technology and national security directing multi-disciplinary research projects in the areas of critical infrastructure protection, oil and gas exploration and production, geothermal energy, energy storage and conversion technologies, alternative fuels and energy and climate policy. Ms. Watz has a B.S. degree in Chemical Engineering from University of California at San Diego and S.M. degrees in both Civil and Environmental Engineering and Technology and Policy from the Massachusetts Institute of Technology. We believe Ms. Watz is qualified to serve on our Board of Directors due to her experience in the energy sector.
Dr. Adrian Paterson, 64, will serve as an independent director following the effectiveness of the registration statement of which this prospectus forms a part. Dr. Paterson served as chief executive officer and as a member of the board of directors of Australia’s Nuclear Science and Technology Agency (“ANTSO”) from March 2009 to December 2020. Dr. Paterson, as chief executive officer at ANTSO, helped establish capital programs for nuclear medicine, nuclear waste technology and specialized facilities worth. Dr. Paterson also has experience running with the management of a national laboratory in South Africa at the Council for Scientific and Industrial Research. Dr. Paterson has experience in energy policy and materials engineering including nuclear energy, hydrogen as an energy vector, advanced ceramics, batteries (high-temperature and lithium) and early-stage ventures. Dr. Paterson has served on advisory boards for two venture funds in South Africa. Dr. Paterson holds a Bachelor of Science and a PhD from the University of Cape Town and a Doctor of Science from the University of Wollongong. We believe that Dr. Paterson is qualified to serve on our Board of Directors due to his management experience and industry knowledge.
Kate Burson, 41, will serve as an independent director following the effectiveness of the registration statement of which this prospectus forms a part. Ms. Burson is the founder of KCB Advisors and has been the principal since September 2019. Ms. Burson has devoted her career to working at the intersection of business, policy and law — as a catalyst to expand and encourage sustainable development. Over last decade she has worked with founders, business executives, and political leaders to develop and execute new strategies for scaling both clean energy and zero emission transportation. From February 2016 to November 2018, Ms. Burson worked at Tesla, Inc. (Nasdaq: TSLA) where she developed new markets and business for Tesla’s new energy business. At Tesla, Ms. Burson gained experience relating to electric transportation and advanced government and corporate policies and partnerships accelerating electric vehicle adoption and charging infrastructure deployment. Prior to joining Tesla, Ms. Burson co-led energy policy for New York State from February 2011 to October 2015. Working at the direction of New York Governor Andrew Cuomo, Ms. Burson developed and deployed a new strategy for a distributed, networked electric grid powered by clean energy. Her initiative grew into the State’s Reforming the Energy Vision, REV, which Ms. Burson co-developed and managed. From 2013 through 2015, Burson served as chief of staff to the chairman of energy & finance for New York State. As the designated energy leader for Governor Cuomo, she identified and hired the new executives needed to lead the energy transformation and hired and led a new team required to manage implementation. Burson and her team were responsible for overseeing the state utility regulatory agency and a number of other institutions. Ms. Burson also served as an assistant attorney general for New York State, prosecuting securities fraud from January 2008 to February 2011. Ms. Burson holds a B.A. from the Vanderbilt University and a J.D. from Washington University in St. Louis. We believe Ms. Burson is qualified to be on our Board of Directors due to her management experience and knowledge of the energy sector.
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint officers as it deems appropriate pursuant to our amended and restated certificate of incorporation.
Director Independence
Nasdaq rules require that a majority of our board of directors be independent within one year of our initial public offering. An “independent director” is defined generally as a person who, in the opinion of the company’s board of directors, has no material relationship with the listed company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the company). We expect to have three “independent directors” as defined in Nasdaq rules and applicable SEC rules prior to completion of this offering. Our board of directors has determined that Mark Pinho, Jill Watz, Adrian Paterson and Kate Burson are “independent directors” as defined in Nasdaq’s listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.
Executive Officer and Director Compensation
None of our executive officers or directors have received any cash compensation for services rendered to us. Commencing on the date that our securities are first listed on Nasdaq through the earlier of consummation of our initial business combination and our liquidation, we will pay our sponsor $10,000 per month for office space, secretarial and administrative services provided to members of our management team. In addition, our sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, executive officers or directors, or our or their affiliates. Any such payments prior to an initial business combination will be made from funds held outside the trust account. Other than quarterly audit committee review of such reimbursements, we do not expect to have any additional controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, will be paid by the company to our sponsor, executive officers and directors, or any of their respective affiliates, prior to completion of our initial business combination.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials or tender offer materials furnished to our stockholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our executive officers and directors may negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment.
Committees of the Board of Directors
Upon the effectiveness of the registration statement of which this prospectus forms a part, our board of directors will have two standing committees: an audit committee and a compensation committee. Subject to phase-in rules and a limited exception, the rules of Nasdaq and Rule 10A-3 of the Exchange Act
require that the audit committee of a listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception, the rules of Nasdaq require that the compensation committee of a listed company be comprised solely of independent directors.
Audit Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish an audit committee of the board of directors. Mark Pinho, Jill Watz and Adrian Paterson will serve as members of our audit committee, and Mr. Pinho will chair the audit committee. All members of our audit committee are independent of and unaffiliated with our sponsor and our underwriters.
Each member of the audit committee is financially literate and our board of directors has determined that Mr. Pinho qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise.
We will adopt an audit committee charter, which will detail the principal functions of the audit committee, including:
•
meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems;
•
monitoring the independence of the independent auditor;
•
verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;
•
inquiring and discussing with management our compliance with applicable laws and regulations;
•
pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed;
•
appointing or replacing the independent auditor;
•
determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;
•
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies;
•
monitoring compliance on a quarterly basis with the terms of this offering and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance with the terms of this offering; and
•
reviewing and approving all payments made to our existing stockholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval.
Compensation Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a compensation committee of the board of directors. Mark Pinho and Kate Burson will serve as members of our compensation committee. Mr. Pinho will chair the compensation committee.
We will adopt a compensation committee charter, which will detail the principal functions of the compensation committee, including:
•
reviewing and approving on an annual basis the corporate goals and objectives relevant to our chief executive officer’s compensation, evaluating our chief executive officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our chief executive officer’s based on such evaluation;
•
reviewing and approving the compensation of all of our other Section 16 executive officers;
•
reviewing our executive compensation policies and plans;
•
implementing and administering our incentive compensation equity-based remuneration plans;
•
assisting management in complying with our proxy statement and annual report disclosure requirements;
•
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;
•
producing a report on executive compensation to be included in our annual proxy statement; and
•
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
Notwithstanding the foregoing, as indicated above, other than the payment to our sponsor of $10,000 per month, for up to 24 months, for office space, utilities and secretarial and administrative support and reimbursement of expenses, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing stockholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in order to effectuate the consummation of an initial business combination. Accordingly, it is likely that prior to the consummation of an initial business combination, the compensation committee will only be responsible for the review and recommendation of any compensation arrangements to be entered into in connection with such initial business combination.
The charter will also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Director Nominations
We do not have a standing nominating committee though we intend to form a corporate governance and nominating committee as and when required to do so by law or Nasdaq rules. In accordance with Rule 5605(e)(2) of the Nasdaq rules, a majority of the independent directors may recommend a director nominee for selection by our board of directors. Our board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. The directors who will participate in the consideration and recommendation of director nominees are Adrian Paterson and Kate Burson. In accordance with Rule 5605(e)(1)(A) of the Nasdaq rules, all such directors are independent. As there is no standing nominating committee, we do not have a nominating committee charter in place.
The board of directors will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish to nominate a director for election to our board of directors should follow the procedures set forth in our bylaws.
We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, our board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.
Compensation Committee Interlocks and Insider Participation
None of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving on our board of directors.
Code of Ethics
We have adopted a code of ethics applicable to our directors, officers and employees (“Code of Ethics”). A copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Conflicts of Interest
In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:
•
the corporation could financially undertake the opportunity;
•
the opportunity is within the corporation’s line of business; and
•
it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.
Below is a table summarizing the entities to which our executive officers and directors currently have fiduciary duties or contractual obligations:
|
Individual
|
|
|
Entity
|
|
|
Entity’s Business
|
|
|
Affiliation
|
|
|
Nimesh Patel(1)
|
|
|
AMCI Group, LLC and affiliates
|
|
|
Investments
|
|
|
Director
|
|
|
Brian Beem(2)
|
|
|
AMCI Group, LLC and affiliates
|
|
|
Investments
|
|
|
Director
|
|
| |
|
|
Jupiter Mines Limited
|
|
|
Natural Resources
|
|
|
Director
|
|
|
Patrick Murphy(3)
|
|
|
AMCI Group, LLC and affiliates
|
|
|
Investments
|
|
|
Director
|
|
| |
|
|
Aberdeen Minerals Limited
|
|
|
Natural Resources
|
|
|
Director
|
|
| |
|
|
Strategic Minerals Europe Limited
|
|
|
Natural Resources
|
|
|
Director
|
|
| |
|
|
Juno Minerals Limited
|
|
|
Natural Resources
|
|
|
Director
|
|
|
Hans Mende(4)
|
|
|
AMCI Group, LLC and affiliates
|
|
|
Investments
|
|
|
Executive Chairman
|
|
| |
|
|
Jupiter Mines Limited
|
|
|
Natural Resources
|
|
|
Director
|
|
|
Kate Burson
|
|
|
KCB Advisors, LLC
|
|
|
Consulting
|
|
|
Principal
|
|
|
Adrian Paterson
|
|
|
Siyeva Consulting
|
|
|
Consulting
|
|
|
Principal
|
|
|
Mark Pinho
|
|
|
St Victor Group LLC
|
|
|
Financial Services
|
|
|
Partner
|
|
| |
|
|
Joerns Wound Co Holdings Inc.
|
|
|
Healthcare
|
|
|
Director
|
|
|
Jill Watz
|
|
|
Ascian Technology Advisors, LLC
|
|
|
Consulting
|
|
|
Principal
|
|
(1)
Mr. Patel is also a director of numerous portfolio companies of AMCI Group and its affiliates, and may be obligated to show acquisitions to such companies before we may pursue such acquisitions.
(2)
Mr. Beem is also a director of numerous portfolio companies of AMCI Group and its affiliates, and may be obligated to show acquisitions to such companies before we may pursue such acquisitions.
(3)
Mr. Murphy is also a director of numerous portfolio companies of AMCI Group and its affiliates, and may be obligated to show acquisitions to such companies before we may pursue such acquisitions.
(4)
Mr. Mende is also a director of numerous portfolio companies of AMCI Group and its affiliates, and may be obligated to show acquisitions to such companies before we may pursue such acquisitions.
Potential investors should also be aware of the following other potential conflicts of interest:
•
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs.
•
Our initial stockholders purchased founder shares prior to the date of this prospectus and will purchase private placement warrants in a transaction that will close simultaneously with the closing of this offering. Our initial stockholders have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and any public shares they hold in connection with the completion of our initial business combination. The other members of our management team have entered into agreements similar to the one entered into by our initial stockholders with respect to any public shares acquired by them in or after this offering. Additionally, our initial stockholders have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within the prescribed time frame or during any Extension Period. If we do not complete our initial business combination within the prescribed time frame, the private placement warrants will expire worthless. Furthermore, our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (i) one year after the completion of our initial business combination and (ii) the date following the completion of our initial business combination on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their common stock for cash, securities or other property. Notwithstanding the foregoing, if the closing price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the founder shares will be released from the lockup. Subject to certain limited exceptions, the private placement warrants will not be transferable until 30 days following the completion of our initial business combination. Because each of our executive officers and director nominees will own common stock or warrants directly or indirectly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
•
Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
We are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with our sponsor, officers or directors or completing the business combination through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a business combination target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking which is a member of FINRA or a valuation or appraisal firm, that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context. Furthermore, in no event will our sponsor or any of our existing officers or directors, or any of their respective affiliates, be paid by the company any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the
completion of our initial business combination. Further, commencing on the date our securities are first listed on Nasdaq, we will also pay our sponsor $10,000 per month for office space, secretarial and administrative services provided to members of our management team.
We cannot assure you that any of the above mentioned conflicts will be resolved in our favor.
In the event that we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed to vote their founder shares, and they and the other members of our management team have agreed to vote any founder shares they hold and any shares purchased during or after the offering in favor of our initial business combination.
Limitation on Liability and Indemnification of Officers and Directors
Our amended and restated certificate of incorporation will provide that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation will provide that our directors will not be personally liable for monetary damages to us or our stockholders for breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions as directors.
We will enter into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate of incorporation. Our bylaws also will permit us to secure insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We will purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors. Except with respect to any public shares they may acquire in this offering or thereafter (in the event we do not consummate an initial business combination), our officers and directors have agreed to waive (and any other persons who may become an officer or director prior to the initial business combination will also be required to waive) any right, title, interest or claim of any kind in or to any monies in the trust account, and not to seek recourse against the trust account for any reason whatsoever, including with respect to such indemnification.
These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the directors’ and officers’ liability insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial ownership of our common stock as of the date of this prospectus, and as adjusted to reflect the sale of our Class A common stock included in the units offered by this prospectus, and assuming no purchase of units in this offering, by:
•
each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;
•
each of our executive officers, directors and director nominees; and
•
all our executive officers and directors as a group.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all of our common stock beneficially owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date of this prospectus.
On January 29, 2021, our sponsor subscribed for an aggregate 5,031,250 founder shares for a total subscription price of $25,000, or approximately $0.005 per share. In March 2021, our sponsor transferred all of the founder shares held by it to members of our board of directors, our management team and persons or entities affiliated with AMCI Group. Such shares are fully paid. On May 14, 2021, certain of our initial stockholders forfeited an aggregate of 718,750 founder shares, resulting in an aggregate of 4,312,500 founder shares outstanding. Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued. The number of founder shares outstanding was determined based on the expectation that the total size of this offering would be a maximum of 17,250,000 units if the underwriters’ over-allotment option is exercised in full, and therefore that such founder shares would represent 20% of the outstanding shares after this offering. Up to 562,500 of the founder shares will be forfeited depending on the extent to which the underwriters’ over-allotment is exercised. The post-offering percentages in the following table assume that the underwriters do not exercise their over-allotment option, that our initial stockholders have forfeited 562,500 founder shares, and that there are 18,750,000 shares of common stock issued and outstanding after this offering.
| |
|
|
Number of
Shares
Beneficially
Owned(2)(3)(4)
|
|
|
Approximate Percentage of
Outstanding Common Stock
|
|
|
Name and Address of Beneficial Owner(1)
|
|
|
Before
Offering
|
|
|
After
Offering
|
|
|
AMCI Sponsor II LLC (our sponsor)
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Nimesh Patel
|
|
|
|
|
927,884 |
|
|
|
|
|
21.5% |
|
|
|
|
|
3.7% |
|
|
|
Brian Beem
|
|
|
|
|
927,884 |
|
|
|
|
|
21.5% |
|
|
|
|
|
3.7% |
|
|
|
Patrick Murphy
|
|
|
|
|
556,731 |
|
|
|
|
|
12.9% |
|
|
|
|
|
2.2% |
|
|
|
Hans Mende(5)
|
|
|
|
|
1,625,000 |
|
|
|
|
|
37.7% |
|
|
|
|
|
6.4% |
|
|
|
Adrian Paterson
|
|
|
|
|
50,000 |
|
|
|
|
|
* |
|
|
|
|
|
* |
|
|
|
Mark Pinho
|
|
|
|
|
50,000 |
|
|
|
|
|
* |
|
|
|
|
|
* |
|
|
|
Jill Watz
|
|
|
|
|
50,000 |
|
|
|
|
|
* |
|
|
|
|
|
* |
|
|
|
Kate Burson
|
|
|
|
|
50,000 |
|
|
|
|
|
* |
|
|
|
|
|
* |
|
|
|
AMCI Group, LLC Series 35(5)
|
|
|
|
|
1,625,000 |
|
|
|
|
|
37.7% |
|
|
|
|
|
6.4% |
|
|
|
All executive officers, directors and director nominees as a group (8 individuals)
|
|
|
|
|
4,237,500 |
|
|
|
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98.3% |
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19.6% |
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*
Less than one percent.
(1)
Unless otherwise noted, the business address of each of the following is 600 Steamboat Road, Greenwich, Connecticut 06830.
(2)
Interests shown consist solely of founder shares, classified as Class B common stock. Such shares will automatically convert into Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment, as described in the section entitled “Description of Securities.”
(3)
Our sponsor, AMCI Sponsor II LLC, is the record holder of the shares reported herein. Mr. Patel has voting and investment discretion with respect to the common stock held of record by AMCI Sponsor II LLC. Each of our officers and directors other than Mr. Patel disclaims any beneficial ownership of any shares held by our sponsor.
(4)
Includes up to 562,500 founder shares that will be forfeited depending on the extent to which the underwriters’ over-allotment option is exercised.
(5)
AMCI Group LLC, Series 35, is the record holder of the shares reported herein. Each of Hans Mende and Fritz Kundrun has voting and investment discretion with respect to the common stock held of record by AMCI Group LLC, Series 35. Each of our officers and directors other than Mr. Mende disclaims any beneficial ownership of any shares held by this entity.
Immediately after this offering, our initial stockholders will beneficially own 20.0% of the then issued and outstanding common stock (assuming they do not purchase any units in this offering). Because of this ownership block, our initial stockholders may be able to effectively influence the outcome of all other matters requiring approval by our stockholders, including amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions including our initial business combination.
Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 3,500,000 private placement warrants (or 3,725,000 warrants if the underwriters’ over-allotment option is exercised in full), at a price of $1.00 per warrant, or $3,500,000 in the aggregate (or $3,725,000 if the underwriters’ over-allotment option is exercised in full), in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant entitles the holder to purchase one share of Class A common stock at $11.50 per share. A portion of the purchase price of the private placement warrants will be added to the proceeds from this offering to be held in the trust account such that at the time of closing of this offering $150 million (or $172.5 million if the underwriters exercise their over-allotment option in full) will be held in the trust account. If we do not complete our initial business combination within 24 months from the closing of this offering, the private placement warrants will expire worthless. The private placement warrants are subject to the transfer restrictions described below. The private placement warrants will not be redeemable by us so long as they are held by the initial purchasers or their permitted transferees. The initial purchasers, or their permitted transferees, have the option to exercise the private placement warrants on a cashless basis. If the private placement warrants are held by holders other than initial purchasers or their permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering.
AMCI Sponsor II LLC, our sponsor, and our executive officers are deemed to be our “promoters” as such term is defined under the federal securities laws.
Expressions of Interest
Our anchor investors have each expressed to us an interest to purchase an aggregate of approximately 45% of the shares in this offering at the offering price and we have agreed to direct the underwriters to sell to the anchor investors such amount of shares. The shares that may be purchased by our anchor investors in this offering will not be subject to any lock-up provisions. At the closing of our initial business combination, the anchor investors will be entitled to purchase from our initial stockholders approximately 334,500 of their founder shares, at a purchase price of approximately $0.005 per share. However, each anchor investor has agreed that if such anchor investor does not purchase the amount for which it expressed an interest, it will forfeit its right to purchase founder shares.
There can be no assurances that any of the anchor investors will acquire any units in this offering, or as to the amount of such units the anchor investors will retain, if any, prior to or upon the consummation of
our initial business combination. In the event that the anchor investors purchase such units (either in this offering or after) and vote them in favor of our initial business combination, a smaller portion of affirmative votes from other public stockholders would be required to approve our initial business combination. The anchor investors have no agreement with us or the sponsor with respect to voting in favor of our initial business combination. If the anchor investors each elect to purchase the amounts for which they expressed an interest in this offering, such stockholders will own approximately 45% of the units sold in this offering. Our sponsor and the anchor investors will own collectively approximately 56% of the outstanding common stock.
Transfers of Founder Shares and Private Placement Warrants
The founder shares, private placement warrants and any shares of Class A common stock issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions in the agreements entered into by our initial stockholders and management team. Those lock-up provisions provide that such securities are not transferable or salable (i) in the case of the founder shares, until the earlier of (A) one year after the completion of our initial business combination or earlier if, subsequent to our initial business combination, the closing price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination and (B) the date following the completion of our initial business combination on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their Class A common stock for cash, securities or other property and (ii) in the case of the private placement warrants and the respective shares of Class A common stock underlying such warrants, until 30 days after the completion of our initial business combination except in each case (a) to our officers or directors, any affiliate or family member of any of our officers or directors, any affiliate of our sponsor or to any member of the sponsor or any of their affiliates, (b) in the case of an individual, as a gift to such person’s immediate family or to a trust, the beneficiary of which is a member of such person’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of such person; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with any forward purchase agreement or similar arrangement or in connection with the consummation of a business combination at prices no greater than the price at which the shares or warrants were originally purchased; (f) by virtue of the laws of the State of Delaware or our sponsor’s limited liability company agreement upon dissolution of our Sponsor, (g) in the event of our liquidation prior to our consummation of our initial business combination; or (h) in the event that, subsequent to our consummation of an initial business combination, we complete a liquidation, merger, capital stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their Class A common stock for cash, securities or other property; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreement.
Registration Rights
The holders of the (i) founder shares, which were issued in a private placement prior to the closing of this offering, (ii) private placement warrants, which will be issued in a private placement simultaneously with the closing of this offering and the shares of Class A common stock underlying such private placement warrants and (iii) private placement warrants that may be issued upon conversion of working capital loans will have registration rights to require us to register a sale of any of our securities held by them prior to the consummation of our initial business combination pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering. Pursuant to the registration rights agreement and assuming the underwriters exercise their over-allotment option in full and $1.5 million of working capital loans are converted into private placement warrants, we will be obligated to register up to 9,537,500 shares of Class A common stock and 5,225,000 warrants. The number of shares of Class A common stock includes (i) 4,312,500 shares of Class A common stock to be issued upon conversion of the founder shares, (ii) 3,725,000 shares of Class A common stock underlying the private placement warrants and (iii) 1,500,000 shares of Class A common stock underlying the private placement warrants issued upon conversion of working capital loans. The number of warrants includes 3,725,000 private placement warrants and 1,500,000 private
placement warrants issued upon conversion of working capital loans. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On January 29, 2021 our sponsor subscribed for an aggregate 5,031,250 founder shares for a total subscription price of $25,000, or approximately $0.005 per share. In March 2021, our sponsor transferred all of the founder shares held by it to members of our board of directors, our management team and persons or entities affiliated with AMCI Group. On May 14, 2021, certain of our initial stockholders forfeited an aggregate of 718,750 founder shares, resulting in an aggregate of 4,312,500 founder shares outstanding. The number of founder shares outstanding was determined based on the expectation that the total size of this offering would be a maximum of 17,250,000 units if the underwriters’ over-allotment option is exercised in full, and therefore that such founder shares would represent 20% of the outstanding shares after this offering. Up to 562,500 of the founder shares will be forfeited depending on the extent to which the underwriters’ over-allotment is exercised. If we increase or decrease the size of the offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20.0% of our issued and outstanding common stock upon the consummation of this offering.
Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 3,500,000 private placement warrants (or 3,725,000 warrants if the underwriters’ over-allotment option is exercised in full), at a price of $1.00 per warrant, or $3,500,000 in the aggregate (or $3,725,000 if the underwriters’ over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. Each private placement warrant entitles the holder to purchase one share of Class A common stock at $11.50 per share. The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the completion of our initial business combination.
We currently utilize office space at 600 Steamboat Road, Greenwich, Connecticut 06830 from our sponsor. Subsequent to the closing of this offering, we will pay our sponsor $10,000 per month for office space, secretarial and administrative services provided to members of our management team. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
No compensation of any kind, including finder’s and consulting fees, will be paid by the company to our sponsor, executive officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates.
Prior to the closing of this offering, our sponsor may loan us funds to be used for a portion of the expenses of this offering. These loans would be non-interest bearing, unsecured and are due at the earlier of June 30, 2021 or the closing of this offering.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required on a non-interest basis. If we complete an initial business combination, we would repay such loaned amounts. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Except as set forth above, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
Any of the foregoing payments to our sponsor, repayments of loans from our sponsor or repayments of working capital loans prior to our initial business combination will be made using funds held outside the trust account.
After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the proxy solicitation or tender offer materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
We have entered into a registration rights agreement with respect to the founder shares and private placement warrants, which is described under the heading “Principal Stockholders — Registration Rights.”
Policy for Approval of Related Party Transactions
The audit committee of our board of directors will adopt a policy setting forth the policies and procedures for its review and approval or ratification of “related party transactions.” A “related party transaction” is any consummated or proposed transaction or series of transactions: (i) in which the company was or is to be a participant; (ii) the amount of which exceeds (or is reasonably expected to exceed) the lesser of $120,000 or 1% of the average of the company’s total assets at year end for the prior two completed fiscal years in the aggregate over the duration of the transaction (without regard to profit or loss); and (iii) in which a “related party” had, has or will have a direct or indirect material interest. “Related parties” under this policy will include: (i) our directors, nominees for director or executive officers; (ii) any record or beneficial owner of more than 5% of any class of our voting securities; (iii) any immediate family member of any of the foregoing if the foregoing person is a natural person; and (iv) any other person who maybe a “related person” pursuant to Item 404 of Regulation S-K under the Exchange Act. Pursuant to the policy, the audit committee will consider (i) the relevant facts and circumstances of each related party transaction, including if the transaction is on terms comparable to those that could be obtained in arm’s-length dealings with an unrelated third party, (ii) the extent of the related party’s interest in the transaction, (iii) whether the transaction contravenes our code of ethics or other policies, (iv) whether the audit committee believes the relationship underlying the transaction to be in the best interests of the company and its stockholders and (v) the effect that the transaction may have on a director’s status as an independent member of the board and on his or her eligibility to serve on the board’s committees. Management will present to the audit committee each proposed related party transaction, including all relevant facts and circumstances relating thereto. Under the policy, we may consummate related party transactions only if our audit committee approves or ratifies the transaction in accordance with the guidelines set forth in the policy. The policy will not permit any director or executive officer to participate in the discussion of, or decision concerning, a related person transaction in which he or she is the related party.
DESCRIPTION OF SECURITIES
We are a Delaware corporation and our affairs are governed by our amended and restated certificate of incorporation and the DGCL. Pursuant to our amended and restated certificate of incorporation which will be adopted prior to the consummation of this offering, we will be authorized to issue 300,000,000 shares of common stock, $0.0001 par value each, including 280,000,000 shares of Class A common stock and 20,000,000 shares of Class B common stock, as well as 1,000,000 shares of preferred stock, $0.0001 par value each. The following description summarizes certain terms of our capital stock as set out more particularly in our amended and restated certificate of incorporation. Because it is only a summary, it may not contain all the information that is important to you.
Units
Each unit has an offering price of $10.00 and consists of one share of Class A common stock and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as described in this prospectus. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of the shares of Company’s Class A common stock. This means only a whole warrant may be exercised at any given time by a warrant holder. For example, if a warrant holder holds one-half of one warrant to purchase a share of Class A common stock, such warrant will not be exercisable. The Class A common stock and warrants comprising the units are expected to begin separate trading on the 52nd day following the date of this prospectus unless the representative informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into Class A common stock and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant.
In no event will the Class A common stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet reflecting our receipt of the gross proceeds at closing of this offering. We will file a Current Report on Form 8-K which includes this audited balance sheet promptly after the completion of this offering, which closing is anticipated to take place three business days after the date of this prospectus. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.
Common Stock
Prior to the date of this prospectus, there were 4,312,500 shares of Class B common stock outstanding, all of which were held of record by our initial stockholders, so that our initial stockholders will own 20% of our issued and outstanding shares after this offering (assuming our initial stockholders do not purchase any units in this offering). Up to 562,500 of the founder shares will be forfeited by our initial stockholders depending on the extent to which the underwriters’ over-allotment is exercised. Upon the closing of this offering, 18,750,000 of our shares of common stock will be outstanding (assuming no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of 562,500 founder shares by our initial stockholders) including:
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15,000,000 shares of Class A common stock underlying units issued as part of this offering; and
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3,750,000 shares of Class B common stock held by our initial stockholders.
If we increase or decrease the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial stockholders at 20.0% of our issued and outstanding common stock upon the consummation of this offering.
Stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders except as required by law. Unless specified in our amended and restated certificate of incorporation, or as required by applicable provisions of the DGCL or applicable stock exchange rules, the affirmative vote of a majority of our shares of common stock that are voted is required to approve any such matter voted on by our stockholders. Our board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. Our stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.
Because our amended and restated certificate of incorporation authorizes the issuance of up to 280,000,000 of shares of Class A common stock, if we were to enter into a business combination, we may (depending on the terms of such a business combination) be required to increase the number of shares of Class A common stock which we are authorized to issue at the same time as our stockholders vote on the business combination to the extent we seek stockholder approval in connection with our initial business combination. Our board of directors is divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term.
In accordance with Nasdaq’s corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws, unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our initial stockholders, sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares they hold in connection with the completion of our initial business combination. Unlike many special purpose acquisition companies that hold stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote is not required by law, if a stockholder vote is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated certificate of incorporation requires these tender offer documents to contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, a stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, we will, like many special purpose acquisition companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek stockholder approval, we will complete our initial business combination only if a majority of the shares of common stock voted are voted in favor of our initial business combination. However,
the participation of our sponsor, officers, directors, advisors or their affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our initial business combination even if a majority of our public stockholders vote, or indicate their intention to vote, against such initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares, without our prior consent. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Our stockholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business combination, and such stockholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such stockholders will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And, as a result, such stockholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their shares in open market transactions, potentially at a loss.
If we seek stockholder approval in connection with our initial business combination, our initial stockholders, sponsor, officers and directors have agreed to vote any founder shares they hold and any public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need 5,625,001 or 37.5%, of the 15,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). Additionally, each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction.
Pursuant to our amended and restated certificate of incorporation, if we are unable to complete our initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Our initial stockholders have entered into agreements with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 24 months from the closing of this offering or during any Extension Period. However, if our initial stockholders or management team acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the prescribed time period.
In the event of a liquidation, dissolution or winding up of the company after a business combination, our stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of shares, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that we will provide our public stockholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, upon the completion of our initial business combination, subject to the limitations described herein.
Founder Shares
The founder shares are designated as Class B common stock and, except as described below, are identical to the shares of Class A common stock included in the units being sold in this offering, and holders of founder shares have the same stockholder rights as public stockholders, except that (i) the founder shares are subject to certain transfer restrictions, as described in more detail below, (ii) our initial stockholders, sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to any founder shares and public shares they hold in connection with the completion of our initial business combination, (B) to waive their redemption rights with respect to any founder shares and public shares they hold in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity and (C) to waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering or during any Extension Period, although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within such time period, and (iii) the founder shares are automatically convertible into Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment as described herein and in our amended and restated certificate of incorporation. If we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination.
The founder shares will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with our initial business combination, the number of shares of Class A common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by public stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of founder shares will never occur on a less than one-for-one basis.
With certain limited exceptions, the founder shares are not transferable, assignable or salable (except to our officers and directors and other persons or entities affiliated with our sponsor, each of whom will be subject to the same transfer restrictions) until the earlier of (A) one year after the completion of our initial business combination or earlier if, subsequent to our initial business combination, the closing price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, and (B) the date following the completion of our initial business combination on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their Class A common stock for cash, securities or other property. Up to 562,500 founder shares will be forfeited by our initial stockholders depending on the exercise of the over-allotment option.
Preferred Stock
Our amended and restated certificate of incorporation authorizes 1,000,000 shares of preferred stock and provides that shares of preferred stock may be issued from time to time in one or more series. Our board
of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without stockholder approval, issue shares of preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of our board of directors to issue shares of preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preferred shares outstanding at the date hereof. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so in the future. No shares of preferred stock are being issued or registered in this offering.
Warrants
Public Stockholders’ Warrants
Each whole warrant entitles the registered holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing 30 days after the completion of our initial business combination, provided that we have an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement) and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Class A common stock. This means only a whole warrant may be exercised at a given time by a warrant holder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant. The warrants will expire five years after the completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
We will not be obligated to deliver any Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to registration. No warrant will be exercisable and we will not be obligated to issue a share of Class A common stock upon exercise of a warrant unless the share of Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will we be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of Class A common stock underlying such unit.
We have agreed that, as soon as practicable, but in no event later than 15 business days, after the closing of our initial business combination, we will use our best efforts to file with the SEC a post-effective amendment to the registration statement of which this prospectus forms a part or a new registration statement covering the registration under the Securities Act of the shares of Class A common stock issuable upon exercise of the warrants and thereafter will use our best efforts to cause the same to become effective within 60 business days following our initial business combination and to maintain a current prospectus relating to the shares of Class A common stock issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order.. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not
effective by the sixtieth (60th) business day after the closing of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if our Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” (defined below) over the exercise price of the warrants by (y) the fair market value per warrant. The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Class A common stock for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of Class A common stock per warrant (subject to adjustment).
Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00.
Once the warrants become exercisable, we may redeem the outstanding warrants:
•
in whole and not in part;
•
at a price of $0.01 per warrant;
•
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
•
if, and only if, the closing price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders.
We will not redeem the warrants as described above unless a registration statement under the Securities Act covering the issuance of the Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available throughout the 30-day redemption period. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
We have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the Class A common stock may fall below the $18.00 redemption trigger price (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.
Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00.
Once the warrants become exercisable, we may redeem the outstanding warrants:
•
in whole and not in part;
•
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that
number of shares determined by reference to the table below, based on the redemption date and the “fair market value” (as defined below) of our Class A common stock except as otherwise described below; and
•
if, and only if, the closing price of our Class A common stock equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within the 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders.
Beginning on the date the notice of redemption is given until the warrants are redeemed or exercised, holders may elect to exercise their warrants on a cashless basis. The numbers in the table below represent the number of shares of Class A common stock that a warrant holder will receive upon such cashless exercise in connection with a redemption by us pursuant to this redemption feature, based on the “fair market value” of our Class A common stock on the corresponding redemption date (assuming holders elect to exercise their warrants and such warrants are not redeemed for $0.10 per warrant), determined for these purposes based on volume weighted average price of our Class A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants, and the number of months that the corresponding redemption date precedes the expiration date of the warrants, each as set forth in the table below. We will provide our warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends. Pursuant to the warrant agreement, references above to Class A common stock shall include a security other than Class A common stock into which the Class A common stock have been converted or exchanged for in the event we are not the surviving company in our initial business combination. The numbers in the table below will not be adjusted when determining the number of shares of Class A common stock to be issued upon exercise of the warrants if we are not the surviving entity following our initial business combination.
The share prices set forth in the column headings of the table below will be adjusted as of any date on which the number of shares issuable upon exercise of a warrant or the exercise price of a warrant is adjusted as set forth under the heading “— Anti-dilution Adjustments” below. If the number of shares issuable upon exercise of a warrant is adjusted, the adjusted share prices in the column headings will equal the share prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise of a warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a warrant as so adjusted. The number of shares in the table below shall be adjusted in the same manner and at the same time as the number of shares issuable upon exercise of a warrant. If the exercise price of a warrant is adjusted, (a) in the case of an adjustment pursuant to the fifth paragraph under the heading “— Anti-dilution Adjustments” below, the adjusted share prices in the column headings will equal the unadjusted share price multiplied by a fraction, the numerator of which is the higher of the Market Value and the Newly Issued Price as set forth under the heading “— Anti-dilution Adjustments” and the denominator of which is $10.00 and (b) in the case of an adjustment pursuant to the second paragraph under the heading “— Anti-dilution Adjustments” below, the adjusted share prices in the column headings will equal the unadjusted share price less the decrease in the exercise price of a warrant pursuant to such exercise price adjustment.
|
Redemption Date (period to expiration of
warrants)
|
|
|
Fair Market Value of Class A Common Stock
|
|
| |
<10.00
|
|
|
11.00
|
|
|
12.00
|
|
|
13.00
|
|
|
14.00
|
|
|
15.00
|
|
|
16.00
|
|
|
17.00
|
|
|
>18.00
|
|
|
60 months
|
|
|
|
|
0.261 |
|
|
|
|
|
0.281 |
|
|
|
|
|
0.297 |
|
|
|
|
|
0.311 |
|
|
|
|
|
0.324 |
|
|
|
|
|
0.337 |
|
|
|
|
|
0.348 |
|
|
|
|
|
0.358 |
|
|
|
|
|
0.361 |
|
|
|
57 months
|
|
|
|
|
0.257 |
|
|
|
|
|
0.277 |
|
|
|
|
|
0.294 |
|
|
|
|
|
0.310 |
|
|
|
|
|
0.324 |
|
|
|
|
|
0.337 |
|
|
|
|
|
0.348 |
|
|
|
|
|
0.358 |
|
|
|
|
|
0.361 |
|
|
|
54 months
|
|
|
|
|
0.252 |
|
|
|
|
|
0.272 |
|
|
|
|
|
0.291 |
|
|
|
|
|
0.307 |
|
|
|
|
|
0.322 |
|
|
|
|
|
0.335 |
|
|
|
|
|
0.347 |
|
|
|
|
|
0.357 |
|
|
|
|
|
0.361 |
|
|
|
51 months
|
|
|
|
|
0.246 |
|
|
|
|
|
0.268 |
|
|
|
|
|
0.287 |
|
|
|
|
|
0.304 |
|
|
|
|
|
0.320 |
|
|
|
|
|
0.333 |
|
|
|
|
|
0.346 |
|
|
|
|
|
0.357 |
|
|
|
|
|
0.361 |
|
|
|
48 months
|
|
|
|
|
0.241 |
|
|
|
|
|
0.263 |
|
|
|
|
|
0.283 |
|
|
|
|
|
0.301 |
|
|
|
|
|
0.317 |
|
|
|
|
|
0.332 |
|
|
|
|
|
0.344 |
|
|
|
|
|
0.356 |
|
|
|
|
|
0.361 |
|
|
|
45 months
|
|
|
|
|
0.235 |
|
|
|
|
|
0.258 |
|
|
|
|
|
0.279 |
|
|
|
|
|
0.298 |
|
|
|
|
|
0.315 |
|
|
|
|
|
0.330 |
|
|
|
|
|
0.343 |
|
|
|
|
|
0.356 |
|
|
|
|
|
0.361 |
|
|
|
42 months
|
|
|
|
|
0.228 |
|
|
|
|
|
0.252 |
|
|
|
|
|
0.274 |
|
|
|
|
|
0.294 |
|
|
|
|
|
0.312 |
|
|
|
|
|
0.328 |
|
|
|
|
|
0.342 |
|
|
|
|
|
0.355 |
|
|
|
|
|
0.361 |
|
|
|
39 months
|
|
|
|
|
0.221 |
|
|
|
|
|
0.246 |
|
|
|
|
|
0.269 |
|
|
|
|
|
0.290 |
|
|
|
|
|
0.309 |
|
|
|
|
|
0.325 |
|
|
|
|
|
0.340 |
|
|
|
|
|
0.354 |
|
|
|
|
|
0.361 |
|
|
|
Redemption Date (period to expiration of
warrants)
|
|
|
Fair Market Value of Class A Common Stock
|
|
| |
<10.00
|
|
|
11.00
|
|
|
12.00
|
|
|
13.00
|
|
|
14.00
|
|
|
15.00
|
|
|
16.00
|
|
|
17.00
|
|
|
>18.00
|
|
|
36 months
|
|
|
|
|
0.213 |
|
|
|
|
|
0.239 |
|
|
|
|
|
0.263 |
|
|
|
|
|
0.285 |
|
|
|
|
|
0.305 |
|
|
|
|
|
0.323 |
|
|
|
|
|
0.339 |
|
|
|
|
|
0.353 |
|
|
|
|
|
0.361 |
|
|
|
33 months
|
|
|
|
|
0.205 |
|
|
|
|
|
0.232 |
|
|
|
|
|
0.257 |
|
|
|
|
|
0.280 |
|
|
|
|
|
0.301 |
|
|
|
|
|
0.320 |
|
|
|
|
|
0.337 |
|
|
|
|
|
0.352 |
|
|
|
|
|
0.361 |
|
|
|
30 months
|
|
|
|
|
0.196 |
|
|
|
|
|
0.224 |
|
|
|
|
|
0.250 |
|
|
|
|
|
0.274 |
|
|
|
|
|
0.297 |
|
|
|
|
|
0.316 |
|
|
|
|
|
0.335 |
|
|
|
|
|
0.351 |
|
|
|
|
|
0.361 |
|
|
|
27 months
|
|
|
|
|
0.185 |
|
|
|
|
|
0.214 |
|
|
|
|
|
0.242 |
|
|
|
|
|
0.268 |
|
|
|
|
|
0.291 |
|
|
|
|
|
0.313 |
|
|
|
|
|
0.332 |
|
|
|
|
|
0.350 |
|
|
|
|
|
0.361 |
|
|
|
24 months
|
|
|
|
|
0.173 |
|
|
|
|
|
0.204 |
|
|
|
|
|
0.233 |
|
|
|
|
|
0.260 |
|
|
|
|
|
0.285 |
|
|
|
|
|
0.308 |
|
|
|
|
|
0.329 |
|
|
|
|
|
0.348 |
|
|
|
|
|
0.361 |
|
|
|
21 months
|
|
|
|
|
0.161 |
|
|
|
|
|
0.193 |
|
|
|
|
|
0.223 |
|
|
|
|
|
0.252 |
|
|
|
|
|
0.279 |
|
|
|
|
|
0.304 |
|
|
|
|
|
0.326 |
|
|
|
|
|
0.347 |
|
|
|
|
|
0.361 |
|
|
|
18 months
|
|
|
|
|
0.146 |
|
|
|
|
|
0.179 |
|
|
|
|
|
0.211 |
|
|
|
|
|
0.242 |
|
|
|
|
|
0.271 |
|
|
|
|
|
0.298 |
|
|
|
|
|
0.322 |
|
|
|
|
|
0.345 |
|
|
|
|
|
0.361 |
|
|
|
15 months
|
|
|
|
|
0.130 |
|
|
|
|
|
0.164 |
|
|
|
|
|
0.197 |
|
|
|
|
|
0.230 |
|
|
|
|
|
0.262 |
|
|
|
|
|
0.291 |
|
|
|
|
|
0.317 |
|
|
|
|
|
0.342 |
|
|
|
|
|
0.361 |
|
|
|
12 months
|
|
|
|
|
0.111 |
|
|
|
|
|
0.146 |
|
|
|
|
|
0.181 |
|
|
|
|
|
0.216 |
|
|
|
|
|
0.250 |
|
|
|
|
|
0.282 |
|
|
|
|
|
0.312 |
|
|
|
|
|
0.339 |
|
|
|
|
|
0.361 |
|
|
|
9 months
|
|
|
|
|
0.090 |
|
|
|
|
|
0.125 |
|
|
|
|
|
0.162 |
|
|
|
|
|
0.199 |
|
|
|
|
|
0.237 |
|
|
|
|
|
0.272 |
|
|
|
|
|
0.305 |
|
|
|
|
|
0.336 |
|
|
|
|
|
0.361 |
|
|
|
6 months
|
|
|
|
|
0.065 |
|
|
|
|
|
0.099 |
|
|
|
|
|
0.137 |
|
|
|
|
|
0.178 |
|
|
|
|
|
0.219 |
|
|
|
|
|
0.259 |
|
|
|
|
|
0.296 |
|
|
|
|
|
0.331 |
|
|
|
|
|
0.361 |
|
|
|
3 months
|
|
|
|
|
0.034 |
|
|
|
|
|
0.065 |
|
|
|
|
|
0.104 |
|
|
|
|
|
0.150 |
|
|
|
|
|
0.197 |
|
|
|
|
|
0.243 |
|
|
|
|
|
0.286 |
|
|
|
|
|
0.326 |
|
|
|
|
|
0.361 |
|
|
|
0 months
|
|
|
|
|
—
|
|
|
|
|
|
— |
|
|
|
|
|
0.042 |
|
|
|
|
|
0.115 |
|
|
|
|
|
0.179 |
|
|
|
|
|
0.233 |
|
|
|
|
|
0.281 |
|
|
|
|
|
0.323 |
|
|
|
|
|
0.361 |
|
|
The exact fair market value and redemption date may not be set forth in the table above, in which case, if the fair market value is between two values in the table or the redemption date is between two redemption dates in the table, the number of shares of Class A common stock to be issued for each warrant exercised will be determined by a straight-line interpolation between the number of shares set forth for the higher and lower fair market values and the earlier and later redemption dates, as applicable, based on a 365 or 366-day year, as applicable. For example, if the volume weighted average price of our Class A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $11.00 per share, and at such time there are 57 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.277 Class A common stock for each whole warrant. For an example where the exact fair market value and redemption date are not as set forth in the table above, if the volume weighted average price of our Class common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $13.50 per share, and at such time there are 38 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.298 Class A common stock for each whole warrant. In no event will the warrants be exercisable on a cashless basis in connection with this redemption feature for more than 0.361 shares of Class A common stock per warrant (subject to adjustment). Finally, as reflected in the table above, if the warrants are out of the money and about to expire, they cannot be exercised on a cashless basis in connection with a redemption by us pursuant to this redemption feature, since they will not be exercisable for any shares of Class A common stock.
This redemption feature differs from the typical warrant redemption features used in other blank check offerings, which typically only provide for a redemption of warrants for cash (other than the private placement warrants) when the trading price for the Class A common stock exceeds $18.00 per share for a specified period of time. This redemption feature is structured to allow for all of the outstanding warrants to be redeemed when the Class A common stock are trading at or above $10.00 per share, which may be at a time when the trading price of our Class A common stock is below the exercise price of the warrants. We have established this redemption feature to provide us with the flexibility to redeem the warrants without the warrants having to reach the $18.00 per share threshold set forth above under “— Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00.” Holders choosing to exercise their warrants in connection with a redemption pursuant to this feature will, in effect, receive a number of shares for their warrants based on an option pricing model with a fixed volatility input as of the date of this prospectus. This redemption right provides us with an additional mechanism by which to redeem all of the outstanding warrants, and therefore have certainty as to our capital structure as the warrants would no longer be outstanding and would have been exercised or redeemed and we will be required to pay the redemption price to warrant holders if we choose to exercise this redemption right and it will allow us to quickly proceed with a redemption of the warrants if we determine it is in our best interest to do so. As such,
we would redeem the warrants in this manner when we believe it is in our best interest to update our capital structure to remove the warrants and pay the redemption price to the warrant holders.
As stated above, we can redeem the warrants when the Class A common stock are trading at a price starting at $10.00, which is below the exercise price of $11.50, because it will provide certainty with respect to our capital structure and cash position while providing warrant holders with the opportunity to exercise their warrants on a cashless basis for the applicable number of shares. If we choose to redeem the warrants when the Class A common stock are trading at a price below the exercise price of the warrants, this could result in the warrant holders receiving fewer Class A common stock than they would have received if they had chosen to wait to exercise their warrants for Class A common stock if and when such Class A common stock were trading at a price higher than the exercise price of $11.50.
No fractional Class A common stock will be issued upon exercise. If, upon exercise, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of Class A common stock to be issued to the holder. If, at the time of redemption, the warrants are exercisable for a security other than the shares of Class A common stock pursuant to the warrant agreement (for instance, if we are not the surviving company in our initial business combination), the warrants may be exercised for such security. At such time as the warrants become exercisable for a security other than the Class A common stock, the Company (or surviving company) will use its commercially reasonable efforts to register under the Securities Act the security issuable upon exercise of the warrants.
Redemption Procedures
A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 4.9% or 9.8% (as specified by the holder) of the Class A common stock outstanding immediately after giving effect to such exercise.
Anti-Dilution Adjustments
If the number of outstanding shares of Class A common stock is increased by a capitalization or share dividend payable in Class A common stock, or by a split-up of common stock or other similar event, then, on the effective date of such capitalization or share dividend, split-up or similar event, the number of shares of Class A common stock issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding ordinary stock. A rights offering made to all or substantially all holders of common stock entitling holders to purchase Class A common stock at a price less than the “historical fair market value” (as defined below) will be deemed a share dividend of a number of shares of Class A common stock equal to the product of (i) the number of shares of Class A common stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Class A common stock) and (ii) one minus the quotient of (x) the price per share of Class A common stock paid in such rights offering and (y) the historical fair market value. For these purposes, (i) if the rights offering is for securities convertible into or exercisable for Class A common stock, in determining the price payable for Class A common stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “historical fair market value” means the volume weighted average price of Class A Common stock as reported during the 10 trading day period ending on the trading day prior to the first date on which the Class A common stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to all or substantially all of the holders of the Class A common stock on account of such Class A common stock (or other securities into which the warrants are convertible), other than (a) as described above, (b) any cash dividends or cash distributions which, when combined on a per share basis with all other cash dividends and cash distributions paid on the Class A common stock during the 365-day period ending on the date of declaration of such dividend or distribution does not exceed $0.50 (as adjusted to appropriately reflect any other adjustments and excluding cash dividends or cash distributions that resulted in an adjustment to the exercise price or to the number of
shares of Class A common stock issuable on exercise of each warrant) but only with respect to the amount of the aggregate cash dividends or cash distributions equal to or less than $0.50 per share, (c) to satisfy the redemption rights of the holders of Class A common stock in connection with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of Class A common stock in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to provide holders of our Class A common stock the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A common stock, or (e) in connection with the redemption of our public shares upon our failure to complete our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of Class A common stock in respect of such event.
If the number of outstanding shares of Class A common stock is decreased by a consolidation, combination, reverse share split or reclassification of Class A common stock or other similar event, then, on the effective date of such consolidation, combination, reverse share split, reclassification or similar event, the number of shares of Class A common stock issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding shares of Class A common stock.
Whenever the number of shares of Class A common stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of Class A common stock purchasable upon the exercise of the warrants immediately prior to such adjustment and (y) the denominator of which will be the number of shares of Class A common stock so purchasable immediately thereafter.
In addition, if (x) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance) (the Newly Issued Price), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our Class A common stock during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the Market Value) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described above under “— Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described above under “— Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
In case of any reclassification or reorganization of the outstanding Class A common stock (other than those described above or that solely affects the par value of such Class A common stock), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding Class A common stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the Class A common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of Class A common stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution
following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event. If less than 70% of the consideration receivable by the holders of Class A common stock in such a transaction is payable in the form of Class A common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the Black-Scholes Warrant Value (as defined in the warrant agreement) of the warrant. The purpose of such exercise price reduction is to provide additional value to holders of the warrants when an extraordinary transaction occurs during the exercise period of the warrants pursuant to which the holders of the warrants otherwise do not receive the full potential value of the warrants.
The warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, and that all other modifications or amendments will require the vote or written consent of the holders of at least 50% of the then outstanding public warrants, and, solely with respect to any amendment to the terms of the private placement warrants, a majority of the then outstanding private placement warrants. You should review a copy of the warrant agreement, which will be filed as an exhibit to the registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the warrants.
The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of common stock and any voting rights until they exercise their warrants and receive Class A common stock. After the issuance of Class A common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of shares of Class A common stock to be issued to the warrant holder.
Private Placement Warrants
Except as described below, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering. The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except pursuant to limited exceptions as described under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants,” to our officers and directors and other persons or entities affiliated with the initial purchasers of the private placement warrants) and they will not be redeemable by us so long as they are held by our sponsor or its permitted transferees (except as otherwise set forth herein). Our sponsor, or its permitted transferees, has the option to exercise the private placement warrants on a cashless basis. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.
If holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “Sponsor fair market value” (defined below) over the exercise price of the warrants by (y) the Sponsor fair market value. For these purposes, the “Sponsor fair market value” shall mean the average reported closing price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless
basis so long as they are held by our sponsor and its permitted transferees is because it is not known at this time whether they will be affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that restrict insiders from selling our securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public stockholders who could exercise their warrants and sell the Class A common stock received upon such exercise freely in the open market in order to recoup the cost of such exercise, the insiders could be significantly restricted from selling such securities. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants.
Our initial stockholders have agreed not to transfer, assign or sell any of the private placement warrants (including the Class A common stock issuable upon exercise of any of these warrants) until the date that is 30 days after the date we complete our initial business combination, except that, among other limited exceptions as described under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants,” transfers can be made to our officers and directors and other persons or entities affiliated with the sponsor.
Dividends
We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of a business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any cash dividends subsequent to a business combination will be within the discretion of our board of directors at such time. If we increase or decrease the size of this offering, then we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our founder shares immediately prior to the consummation of the offering in such amount as to maintain the number of founder shares at 20.0% of our issued and outstanding common stock upon the consummation of this offering. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Our Transfer Agent and Warrant Agent
The transfer agent for our common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence or intentional misconduct of the indemnified person or entity. Continental Stock Transfer & Trust Company has agreed that it has no right of set-off or any right, title, interest or claim of any kind to, or to any monies in, the trust account, and has irrevocably waived any right, title, interest or claim of any kind to, or to any monies in, the trust account that it may have now or in the future. Accordingly, any indemnification provided will only be able to be satisfied, or a claim will only be able to be pursued, solely against us and our assets outside the trust account and not against the any monies in the trust account or interest earned thereon.
Amended and Restated Certificate of Incorporation
Our amended and restated certificate of incorporation will contain certain requirements and restrictions relating to this offering that will apply to us until the completion of our initial business combination. These provisions cannot be amended without the approval of the holders of 65% of our common stock. Our initial stockholders, who will collectively beneficially own 20% of our common stock upon the closing of
this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and will have the discretion to vote in any manner they choose. Specifically, our amended and restated certificate of incorporation provides, among other things, that:
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If we are unable to complete our initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and in all cases subject to the requirements of other applicable law;
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Prior to our initial business combination, we may not issue additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on our initial business combination or (b) to approve an amendment to our amended and restated certificate of incorporation to (x) extend the time we have to consummate a business combination beyond 24 months from the closing of this offering or (y) amend the foregoing provisions;
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Although we do not intend to enter into a business combination with a target business that is affiliated with our sponsor, our directors or our executive officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm that such a business combination is fair to our company from a financial point of view;
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If a stockholder vote on our initial business combination is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act. Whether or not we maintain our registration under the Exchange Act or our listing on Nasdaq, we will provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above;
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So long as we obtain and maintain a listing for our securities on Nasdaq, Nasdaq rules require that we must not consummate an initial business combination with one or more operating businesses or assets with a fair market value of at least 80% of the assets held in the trust account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting commissions) at the time of the agreement to enter into the initial business combination;
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If our stockholders approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering, or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, we will provide our public stockholders with the opportunity to redeem all or a portion of their Class A common stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein; and
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We will not effectuate our initial business combination with another blank check company or a similar company with nominal operations.
In addition, our amended and restated certificate of incorporation provides that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001.
Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws
We will be subject to the provisions of Section 203 of the DGCL regulating corporate takeovers upon completion of this offering. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:
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a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
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an affiliate of an interested stockholder; or
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an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.
A “business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:
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our board of directors approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
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after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or
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on or subsequent to the date of the transaction, the initial business combination is approved by our board of directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.
Our amended and restated certificate of incorporation will provide that our board of directors will be classified into three classes of directors. As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at two or more annual meetings.
Our authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Exclusive Forum for Certain Lawsuits
Our amended and restated certificate of incorporation will require, unless we consent in writing to the selection of an alternative forum, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or bylaws, or (iv) any action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery in the State of Delaware, except any claim (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction. If an action
is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.
Notwithstanding the foregoing, our amended and restated certificate of incorporation will provide that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Additionally, unless we consent in writing to the selection of an alternative forum, the federal courts shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act against us or any of our directors, officers, other employees or agents. Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and consented to these provisions.
Special Meeting of Stockholders
Our bylaws provide that special meetings of our stockholders may be called only by a majority vote of our board of directors, by our Chief Executive Officer or by our Chairman.
Advance Notice Requirements for Stockholder Proposals and Director Nominations
Our bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders, must provide timely notice of their intent in writing. To be timely, a stockholder’s notice will need to be received by the company secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the opening of business on the 120th day prior to the anniversary date of the immediately preceding annual meeting of stockholders. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained therein. Our bylaws also specify certain requirements as to the form and content of a stockholders’ meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.
Action by Written Consent
Subsequent to the consummation of the offering, any action required or permitted to be taken by our common stockholders must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders other than with respect to our Class B common stock.
Classified Board of Directors
Our board of directors will initially be divided into three classes, Class I, Class II and Class III, with members of each class serving staggered three-year terms. Our amended and restated certificate of incorporation will provide that the authorized number of directors may be changed only by resolution of the board of directors. Subject to the terms of any preferred stock, any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class. Any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by vote of a majority of our directors then in office.
Class B Common Stock Consent Right
For so long as any shares of Class B common stock remain outstanding, we may not, without the prior vote or written consent of the holders of a majority of the shares of Class B common stock then outstanding,
voting separately as a single class, amend, alter or repeal any provision of our certificate of incorporation, whether by merger, consolidation or otherwise, if such amendment, alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class B common stock. Any action required or permitted to be taken at any meeting of the holders of Class B common stock may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the outstanding Class B common stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of Class B common stock were present and voted.
Securities Eligible for Future Sale
Immediately after this offering we will have 18,750,000 (or 21,562,500 if the underwriters’ over-allotment option is exercised in full) shares of common stock outstanding. Of these shares, the shares of Class A common stock sold in this offering (15,000,000 Class A common stock if the underwriters’ over-allotment option is not exercised and 17,250,000 shares if the underwriters’ over-allotment option is exercised in full) will be freely tradable without restriction or further registration under the Securities Act, except for any Class A common stock purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the outstanding founder shares (3,750,000 founder shares if the underwriters’ over-allotment option is not exercised and 4,312,500 founder shares if the underwriters’ over-allotment option is exercised in full) and all of the outstanding private placement warrants (3,500,000 warrants if the underwriters’ over-allotment option is not exercised and 3,725,000 warrants if the underwriters’ over-allotment option is exercised in full) will be restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering.
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares or warrants for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.
Persons who have beneficially owned restricted shares or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
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1% of the total number of shares of common stock then outstanding, which will equal 187,500 shares immediately after this offering (or 215,625 if the underwriters exercise in full their over-allotment option); or
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the average weekly reported trading volume of the Class A common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies
Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:
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the issuer of the securities that was formerly a shell company has ceased to be a shell company;
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the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
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the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
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at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
As a result, our initial stockholders will be able to sell their founder shares and private placement warrants, as applicable, pursuant to Rule 144 without registration one year after we have completed our initial business combination.
Registration Rights
The holders of the (i) founder shares, which were issued in a private placement prior to the closing of this offering, (ii) private placement warrants, which will be issued in a private placement simultaneously with the closing of this offering and the shares of Class A common stock underlying such private placement warrants and (iii) private placement warrants that may be issued upon conversion of working capital loans will have registration rights to require us to register a sale of any of our securities held by them prior to the consummation of our initial business combination pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering. Pursuant to the registration rights agreement and assuming the underwriters exercise their over-allotment option in full and $1.5 million of working capital loans are converted into private placement warrants, we will be obligated to register up to 9,537,500 shares of Class A common stock and 5,225,000 warrants. The number of shares of Class A common stock includes (i) 4,312,500 shares of Class A common stock to be issued upon conversion of the founder shares, (iv) 3,725,000 shares of Class A common stock underlying the private placement warrants and (iii) 1,500,000 shares of Class A common stock underlying the private placement warrants issued upon conversion of working capital loans. The number of warrants includes 3,725,000 private placement warrants and 1,500,000 private placement warrants issued upon conversion of working capital loans. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Listing of Securities
We have applied to have our units listed on Nasdaq under the symbol “AMCIU” commencing on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on Nasdaq. Once the securities comprising the units begin separate trading, we expect that the Class A common stock and warrants will be listed on Nasdaq under the symbols “AMCI” and “AMCIW,” respectively.
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of certain material U.S. federal income tax consequences of the acquisition, ownership and disposition of our units, shares of Class A common stock and warrants, which we refer to collectively as our securities. Because the components of a unit are separable at the option of the holder, the holder of a unit generally should be treated, for U.S. federal income tax purposes, as the owner of the underlying Class A common stock and warrant components of the unit. As a result, the discussion below with respect to actual holders of Class A common stock and warrants should also apply to holders of units (as the deemed owners of the underlying Class A common stock and warrants that comprise the units).
This discussion is limited to certain U.S. federal income tax considerations to beneficial owners of our securities who are initial purchasers of a unit pursuant to this offering and hold the unit and each component of the unit as a capital asset within the meaning of Section 1221 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). This discussion assumes that the Class A common stock and warrants will trade separately and that any distributions made (or deemed made) by us on our Class A common stock and any consideration received (or deemed received) by a holder in consideration for the sale or other disposition of our securities will be in U.S. dollars.
This discussion does not address the U.S. federal income tax consequences to our founders, sponsors, officers or directors, or to holders of private placement warrants. This discussion is a summary only and does not describe all of the tax consequences that may be relevant to you in light of your particular circumstances, including but not limited to the alternative minimum tax, the Medicare tax on certain net investment income and the different consequences that may apply if you are subject to special rules that apply to certain types of investors, including but not limited to:
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banks, financial institutions or financial services entities;
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broker-dealers;
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governments or agencies or instrumentalities thereof;
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regulated investment companies;
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real estate investment trusts;
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expatriates or former long-term residents of the United States;
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persons that actually or constructively own five percent or more (by vote or value) of our shares;
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persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation;
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insurance companies;
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dealers or traders subject to a mark-to-market method of accounting with respect to the securities;
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persons holding the securities as part of a “straddle,” constructive sale, hedge, wash sale, conversion or other integrated or similar transaction;
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U.S. holders (as defined below) whose functional currency is not the U.S. dollar;
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tax-exempt entities;
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controlled foreign corporations;
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passive foreign investment companies; and
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partnerships (or entities or arrangements classified as partnerships or other pass-through entities for U.S. federal income tax purposes) and any beneficial owners of such partnerships.
If a partnership (including an entity or arrangement treated as a partnership or other pass-thru entity for U.S. federal income tax purposes) holds our securities, the tax treatment of a partner, member or other beneficial owner in such partnership will generally depend upon the status of the partner, member or other beneficial owner, the activities of the partnership and certain determinations made at the partner, member or other beneficial owner level. If you are a partner, member or other beneficial owner of a partnership
holding our securities, you are urged to consult your tax advisor regarding the tax consequences of the acquisition, ownership and disposition of our securities.
This discussion is based on the Code, and administrative pronouncements, judicial decisions and final, temporary and proposed Treasury Regulations as of the date hereof, which are subject to change, possibly on a retroactive basis, and changes to any of which subsequent to the date of this prospectus may affect the tax consequences described herein. This discussion does not address any aspect of state, local or non-U.S. taxation, or any U.S. federal taxes other than income taxes (such as gift and estate taxes).
We have not sought, and do not expect to seek, a ruling from the U.S. Internal Revenue Service (the “IRS”) as to any U.S. federal income tax consequence described herein. The IRS may disagree with the discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion. You are urged to consult your tax advisor with respect to the application of U.S. federal tax laws to your particular situation, as well as any tax consequences arising under the laws of any state, local or foreign jurisdiction.
THIS DISCUSSION IS ONLY A SUMMARY OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS ASSOCIATED WITH THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES. EACH PROSPECTIVE INVESTOR IN OUR SECURITIES IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY U.S. FEDERAL NON-INCOME, STATE, LOCAL, AND NON-U.S. TAX LAWS.
Personal Holding Company Status
We could be subject to a second level of U.S. federal income tax on a portion of our income if we are determined to be a personal holding company (a “PHC”) for U.S. federal income tax purposes. A U.S. corporation generally will be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (i) at any time during the last half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals for this purpose certain entities such as certain tax-exempt organizations, pension funds and charitable trusts) own or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by value and (ii) at least 60% of the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax purposes, for such taxable year consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities and, under certain circumstances, rents).
Depending on the date and size of our initial business combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of PHC income. In addition, depending on the concentration of our stock in the hands of individuals, including the members of our sponsor and certain tax-exempt organizations, pension funds and charitable trusts, it is possible that more than 50% of our stock may be owned or deemed owned (pursuant to the constructive ownership rules mentioned above) by such persons during the last half of a taxable year. Thus, no assurance can be given that we will not be a PHC following this offering or in the future. If we are or were to become a PHC in a given taxable year, we would be subject to an additional PHC tax, currently imposed at a rate of 20%, on our undistributed PHC income, which generally includes our taxable income, subject to certain adjustments.
Allocation of Purchase Price and Characterization of a Unit
No statutory, administrative or judicial authority directly addresses the treatment of a unit or any instrument similar to a unit for U.S. federal income tax purposes and, therefore, that treatment is not entirely clear. The acquisition of a unit should be treated for U.S. federal income tax purposes as the acquisition of one share of our Class A common stock and one-half of one warrant to acquire one share of our Class A common stock. For U.S. federal income tax purposes, each holder of a unit must allocate the purchase price paid by such holder for such unit between the one share of Class A common stock and the one-half of one warrant based on the relative fair market value of each at the time of issuance. Under U.S. federal income tax law, each investor must make his or her own determination of such value based on all
the relevant facts and circumstances. Therefore, we strongly urge each investor to consult his or her tax advisor regarding the determination of value for these purposes. The price allocated to each share of Class A common stock and the one-half of one warrant should be the stockholder’s tax basis in such share or one-half of one warrant, as the case may be. Any disposition of a unit should be treated for U.S. federal income tax purposes as a disposition of the share of Class A common stock and one-half of one warrant comprising the unit, and the amount realized on the disposition should be allocated between the share of Class A common stock and the one-half of one warrant based on their respective relative fair market values (as determined by each such unit holder based on all the relevant facts and circumstances) at the time of disposition. The separation of shares of Class A common stock and warrants comprising units and the combination of two halves of a warrant into a single warrant should not be a taxable event for U.S. federal income tax purposes.
The foregoing treatment of the units, shares of Class A common stock, and warrants and a holder’s purchase price allocation are not binding on the IRS or the courts. Because there are no authorities that directly address instruments that are similar to the units, no assurance can be given that the IRS or the courts will agree with the characterization described above or the discussion below. Accordingly, each prospective investor is urged to consult its own tax advisors regarding the tax consequences of an investment in a unit (including alternative characterizations of a unit). The balance of this discussion assumes that the characterization of the units described above will be respected for U.S. federal income tax purposes.
U.S. Holders
This section applies to you if you are a “U.S. holder.” A U.S. holder is a beneficial owner of our units, shares of Class A common stock or warrants who or that is, for U.S. federal income tax purposes:
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an individual who is a citizen or resident of the United States;
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a corporation (or other entity taxable as a corporation) organized in or under the laws of the United States, any state thereof or the District of Columbia;
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an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
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a trust, if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons (as defined in the Code) have authority to control all substantial decisions of the trust or (ii) it has a valid election in effect under Treasury Regulations to be treated as a United States person.
Taxation of Distributions. If we pay distributions in cash or other property (other than certain distributions of our stock or rights to acquire our stock) to U.S. holders of shares of our Class A common stock, such distributions generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. holder’s adjusted tax basis in our Class A common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the Class A common stock and will be treated as described under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” below.
Dividends we pay to a U.S. holder that is treated as a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, dividends we pay to a non-corporate U.S. holder may constitute “qualified dividend income” that will be subject to tax at the maximum tax rate accorded to long-term capital gains. It is unclear whether the redemption rights with respect to the Class A common stock described in this prospectus may prevent a U.S. holder from satisfying the applicable holding period requirements with respect to the dividends received deduction or the preferential tax rate on qualified dividend income, as the case may be. If the holding period requirements are not satisfied, then a corporation may not be able to qualify for the dividends received deduction and would have taxable income
equal to the entire dividend amount, and non-corporate U.S. holders may be subject to tax on such dividend at regular ordinary income tax rates instead of the preferential rate that applies to qualified dividend income.
Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants. Upon a sale or other taxable disposition of our Class A common stock or warrants (which, in general, would include a redemption of Class A common stock or warrants that is treated as a sale of such securities as described below, including as a result of a dissolution and liquidation in the event we do not consummate an initial business combination within the required time period), a U.S. holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. holder’s adjusted tax basis in the Class A common stock or warrants. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. holder’s holding period for the Class A common stock or warrants so disposed of exceeds one year. It is unclear, however, whether the redemption rights with respect to the Class A common stock described in this prospectus may suspend the running of the applicable holding period for this purpose. If the running of the holding period for the Class A common stock is suspended, then non-corporate U.S. holders may not be able to satisfy the one-year holding period requirement for long-term capital gain treatment, in which case any gain on a sale or taxable disposition of the shares would be subject to short-term capital gain treatment and would be taxed at regular ordinary income tax rates. Long-term capital gains recognized by non-corporate U.S. holders may be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations.
Generally, the amount of gain or loss recognized by a U.S. holder is an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition (or, if the Class A common stock or warrants are held as part of units at the time of the disposition, the portion of the amount realized on such disposition that is allocated to the Class A common stock or the warrants based upon the then relative fair market values of the Class A common stock and the warrants included in the units) and (ii) the U.S. holder’s adjusted tax basis in its Class A common stock or warrants so disposed of. A U.S. holder’s adjusted tax basis in its Class A common stock or warrants generally will equal the U.S. holder’s acquisition cost (that is, as discussed above, the portion of the purchase price of a unit allocated to a share of Class A common stock or one-half of one warrant or, as discussed below, the U.S. holder’s initial basis for Class A common stock received upon exercise of warrants) less, in the case of a share of Class A common stock, any prior distributions treated as a return of capital.
Redemption of Class A Common Stock. In the event that a U.S. holder’s Class A common stock is redeemed pursuant to the redemption provisions described in this prospectus under the section of this prospectus entitled “Description of Securities — Common Stock” or if we purchase a U.S. holder’s Class A common stock in an open market transaction (such open market purchase of Class A common stock by us is referred to as a “redemption” for the remainder of this discussion), the treatment of the transaction for U.S. federal income tax purposes will depend on whether the redemption qualifies as a sale of Class A common stock under Section 302 of the Code. If the redemption qualifies as a sale of Class A common stock, the U.S. holder will be treated as described under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” above. If the redemption does not qualify as a sale of Class A common stock, the U.S. holder will be treated as receiving a corporate distribution with the tax consequences described above under “U.S. Holders — Taxation of Distributions”. Whether a redemption qualifies for sale treatment will depend largely on the total number of shares of our stock treated as held by the U.S. holder (including any stock constructively owned by the U.S. holder as described in the following paragraph) relative to all of our shares outstanding both before and after the redemption. The redemption of Class A common stock generally will be treated as a sale of the Class A common stock (rather than as a corporate distribution) if the redemption (i) is “substantially disproportionate” with respect to the U.S. holder, (ii) results in a “complete termination” of the U.S. holder’s interest in us or (iii) is “not essentially equivalent to a dividend” with respect to the U.S. holder. These tests are explained more fully below.
In determining whether any of the foregoing tests are satisfied, a U.S. holder takes into account not only stock actually owned by the U.S. holder, but also shares of our stock that are constructively owned by it. A U.S. holder may constructively own, in addition to stock owned directly, stock owned by certain related individuals and entities in which the U.S. holder has an interest or that have an interest in such U.S. holder,
as well as any stock the U.S. holder has a right to acquire by exercise of an option, which would generally include Class A common stock which could be acquired pursuant to the exercise of the warrants. In order to meet the substantially disproportionate test, the percentage of our outstanding voting stock actually and constructively owned by the U.S. holder immediately following the redemption of Class A common stock must, among other requirements, be less than 80% of the percentage of our outstanding voting stock actually and constructively owned by the U.S. holder immediately before the redemption. There will be a complete termination of a U.S. holder’s interest if either (i) all of the shares of our stock actually and constructively owned by the U.S. holder are redeemed or (ii) all of the shares of our stock actually owned by the U.S. holder are redeemed and the U.S. holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of stock owned by certain family members and the U.S. holder does not constructively own any other shares of our stock (including any stock constructively owned by the U.S. holder as a result of owning warrants). The redemption of the Class A common stock will not be essentially equivalent to a dividend if a U.S. holder’s redemption results in a “meaningful reduction” of the U.S. holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S. holder’s proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. holder should consult with its own tax advisors as to the tax consequences of a redemption.
If none of the foregoing tests is satisfied, then the redemption of any Class A common stock will be treated as a corporate distribution and the tax effects will be as described under “U.S. Holders — Taxation of Distributions,” above. After the application of those rules, any remaining tax basis of the U.S. holder in the redeemed Class A common stock will be added to the U.S. holder’s adjusted tax basis in its remaining stock, or, if it has none, to the U.S. holder’s adjusted tax basis in its warrants or possibly in other stock constructively owned by it.
U.S. holders who actually or constructively own five percent (or, if our Class A common stock are not then publicly traded, one percent) or more of our shares (by vote or value) may be subject to special reporting requirements with respect to a redemption of Class A common stock, and such holders are urged to consult with their own tax advisors with respect to their reporting requirements.
Exercise, Lapse or Redemption of a Warrant.
A U.S. holder generally will not recognize taxable gain or loss on the acquisition of our Class A common stock upon exercise of a warrant for cash. The U.S. holder’s tax basis in the share of our Class A common stock received upon exercise of the warrant generally will be an amount equal to the sum of the U.S. holder’s initial investment in the warrant (i.e., the portion of the U.S. holder’s purchase price for a unit that is allocated to the warrant, as described above under “Allocation of Purchase Price and Characterization of a Unit”) and the exercise price. It is unclear whether the U.S. holder’s holding period for the Class A common stock received upon exercise of the warrants will begin on the date following the date of exercise or on the date of exercise of the warrants; in either case, the holding period will not include the period during which the U.S. holder held the warrants. If a warrant is allowed to lapse unexercised, a U.S. holder generally will recognize a capital loss equal to such holder’s tax basis in the warrant.
The tax consequences of a cashless exercise of a warrant are not clear under current tax law. A cashless exercise may not be taxable, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes (including if a U.S. holder exercises its warrants on a cashless basis after we provide notice that we will redeem warrants for $0.10 as described in the section of this prospectus entitled Description of Securities — Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00” and such cashless exercise is characterized as a redemption of warrants for Class A common stock). In either situation, a U.S. holder’s basis in the Class A common stock received would equal the holder’s basis in the warrants exercised therefor. If the cashless exercise were treated as not being a realization event, it is unclear whether a U.S. holder’s holding period in the Class A common stock would be treated as commencing on the date following the date of exercise or on the date of exercise of the warrant; in either case, the holding period would not include the period during which the U.S. holder held the warrants. If
the cashless exercise were treated as a recapitalization, the holding period of the Class A common stock would include the holding period of the warrants exercised therefor.
It is also possible that a cashless exercise could be treated in part as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. holder could be deemed to have surrendered a number of warrants equal to the number of shares of Class A common stock having a value equal to the exercise price for the total number of warrants to be exercised. In such case, the U.S. holder would recognize capital gain or loss with respect to the warrants deemed surrendered in an amount equal to the difference between the fair market value of the Class A common stock that would have been received in a regular exercise of the warrants deemed surrendered and the U.S. holder’s tax basis in the warrants deemed surrendered. In this case, a U.S. holder’s aggregate tax basis in the Class A common stock received would equal the sum of the U.S. holder’s initial investment in the warrants deemed exercised (i.e., the portion of the U.S. holder’s purchase price for the units that is allocated to the warrants, as described above under “Allocation of Purchase Price and Characterization of a Unit”) and the aggregate exercise price of such warrants. In addition, if we provide notice that we will redeem warrants for $0.10 as described in the section of this prospectus entitled “Description of Securities — Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00”, and a U.S. holder exercises its warrant on a cashless basis and receives the amount of Class A common stock as determined by reference to the table set forth therein, it is also possible that such cashless exercise could be characterized as a redemption of warrants for Class A common stock for tax purposes in a taxable exchange in which gain or loss would be recognized with respect to all of the warrants so exercised. In either case, it is unclear whether a U.S. holder’s holding period for the Class A common stock would commence on the date following the date of exercise or on the date of exercise of the warrant; in either case, the holding period would not include the period during which the U.S. holder held the warrant.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, including when a U.S. holder’s holding period would commence with respect to the Class A common stock received, there can be no assurance regarding which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. holders should consult their tax advisors regarding the tax consequences of a cashless exercise.
If we redeem warrants for cash pursuant to the redemption provisions described in the section of this prospectus entitled “Description of Securities — Warrants — Public Stockholders’ Warrants” or if we purchase warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U.S. holder, taxed as described above under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants.”
Possible Constructive Distributions. The terms of each warrant provide for an adjustment to the number of shares of Class A common stock for which the warrant may be exercised or to the exercise price of the warrant in certain events, as discussed in the section of this prospectus entitled “Description of Securities — Warrants — Public Stockholders’ Warrants.” An adjustment which has the effect of preventing dilution generally is not taxable. The U.S. holders of the warrants would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment increases the warrant holders’ proportionate interest in our assets or earnings and profits (for example, through an increase in the number of shares of Class A common stock that would be obtained upon exercise or through a decrease in the exercise price of the warrant), which adjustment may be made as a result of a distribution of cash or other property, such as other securities, to the holders of shares of our Class A common stock, or as a result of the issuance of a stock dividend to holders of shares of our Class A common stock, in each case, which is taxable to the holders of such shares as a distribution. Such constructive distribution would be subject to tax as described under “U.S. Holders — Taxation of Distributions” in the same manner as if the U.S. holders of the warrants received a cash distribution from us equal to the fair market value of such increased interest.
Information Reporting and Backup Withholding.
In general, information reporting requirements may apply to dividends paid to a U.S. holder and to the proceeds of the sale or other disposition of our units, shares of Class A common stock and warrants, unless the U.S. holder is an exempt recipient. Backup withholding may apply to such payments if the U.S. holder
fails to provide a taxpayer identification number, a certification of exempt status, or has been notified by the IRS that it is subject to backup withholding (and such notification has not been withdrawn).
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a credit against a U.S. holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided the required information is timely furnished to the IRS.
Non-U.S. Holders
This section applies to you if you are a “Non-U.S. holder.” As used herein, the term “Non-U.S. holder” means a beneficial owner of our units, Class A common stock or warrants who or that is for U.S. federal income tax purposes:
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a non-resident alien individual (other than certain former citizens and residents of the United States subject to U.S. tax as expatriates);
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a foreign corporation; or
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an estate or trust that is not a U.S. holder;
but generally does not include an individual who is present in the United States for 183 days or more in the taxable year of the disposition of our units, Class A common stock or warrants. If you are such an individual, you should consult your tax advisor regarding the U.S. federal income tax consequences of the acquisition, ownership or sale or other disposition of our securities.
Taxation of Distributions.
In general, any distributions (including constructive distributions, but not including certain distributions of our stock or rights to acquire our stock) we make to a Non-U.S. holder of shares of our Class A common stock, to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States, we will be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E). In the case of any constructive dividend, it is possible that this tax would be withheld from any amount owed to a Non-U.S. holder by us or the applicable withholding agent, including cash distributions on other property or sale proceeds from warrants or other property subsequently paid or credited to such holder. Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the Non-U.S. holder’s adjusted tax basis in its shares of our Class A common stock and, to the extent such distribution exceeds the Non-U.S. holder’s adjusted tax basis, as gain realized from the sale or other disposition of the Class A common stock, which will be treated as described under “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” below. In addition, if we determine that we are likely to be classified as a “United States real property holding corporation” (see “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” below), we generally will withhold 15% of any distribution that exceeds our current and accumulated earnings and profits.
The withholding tax generally does not apply to dividends paid to a Non-U.S. holder who provides a Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States. Instead, the effectively connected dividends will be subject to regular U.S. federal income tax as if the Non-U.S. holder were a U.S. resident, subject to an applicable income tax treaty providing otherwise. A corporate Non-U.S. holder receiving effectively connected dividends may also be subject to an additional “branch profits tax” imposed at a rate of 30% (or a lower applicable treaty rate).
Exercise, Lapse or Redemption of a Warrant.
The U.S. federal income tax treatment of a Non-U.S. holder’s exercise of a warrant, or the lapse of a warrant held by a Non-U.S. holder, generally will correspond to the U.S. federal income tax treatment of
the exercise or lapse of a warrant by a U.S. holder, as described under “U.S. Holders — Exercise, Lapse or Redemption of a Warrant” above, although to the extent a cashless exercise results in a taxable exchange, the consequences would be similar to those described below in “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants.”
The characterization for U.S. federal income tax purposes of the redemption of the Non-U.S. holder’s warrants generally will correspond to the U.S. federal income tax treatment of such a redemption of a U.S. holder’s warrants, as described under “U.S. Holders — Exercise, Lapse or Redemption of a Warrant” above, and the consequences of the redemption to the Non-U.S. holder will be as described below under the heading “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” depending on such characterization.
Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants.
A Non-U.S. holder generally will not be subject to U.S. federal income or withholding tax in respect of gain recognized on a sale, taxable exchange or other taxable disposition of our Class A common stock, which would include a dissolution and liquidation in the event we do not complete an initial business combination within the required time period, or warrants (including an expiration or redemption of our warrants), in each case without regard to whether those securities were held as part of a unit, unless:
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the gain is effectively connected with the conduct by the Non-U.S. holder of a trade or business within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. holder); or
•
we are or have been a “United States real property holding corporation” (as defined below) for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the Non-U.S. holder’s holding period for the applicable security, except, in the case where shares of our Class A common stock are “regularly traded on an established securities market” (within the meaning of the Treasury Regulations, referred to herein as “regularly traded”), the Non-U.S. holder (i) has owned, directly or constructively, at all times within the shorter of the five-year period preceding the disposition of the Class A common stock or such Non-U.S. holder’s holding period for such Class A common stock, 5% or less of our Class A common stock or (ii) has owned, directly or constructively, at all times within the shorter of the five-year period preceding the disposition of the warrants or such Non-U.S. holder’s holding period for such warrants, 5% or less of the total fair market value of our warrants, provided our warrants are considered to be regularly traded. It is unclear how the rules for determining the 5% threshold for this purpose would be applied with respect to our Class A common stock and warrants, including how a Non-U.S. holder’s ownership of warrants impacts the 5% threshold determination with respect to its Class A common stock and whether the 5% threshold determination with respect to our warrants must be made with or without reference to the private placement warrants. In addition, special rules may apply in the case of a disposition of warrants if our Class A common stock is considered to be regularly traded, but the warrants are not considered to be regularly traded. We can provide no assurance as to our future status as a United States real property holding corporation or as to whether our Class A common stock or warrants will be considered to be regularly traded. Non-U.S. holders should consult their own tax advisors regarding the application of the foregoing rules in light of their particular facts and circumstances.
Unless an applicable treaty provides otherwise, gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates as if the Non-U.S. holder were a U.S. resident. Any gains described in the first bullet point above of a Non-U.S. holder that is treated as a foreign corporation for U.S. federal income tax purposes may also be subject to an additional “branch profits tax” imposed at a 30% rate (or lower treaty rate).
If the second bullet point above applies to a Non-U.S. holder, gain recognized by such holder on the sale, exchange or other disposition of our Class A common stock or warrants will be subject to tax at generally applicable U.S. federal income tax rates. In addition, a buyer of our Class A common stock or warrants from such holder may be required to withhold U.S. federal income tax at a rate of 15% of the amount realized upon such disposition. We cannot determine whether we will be a “United States real property holding corporation” in the future until we complete an initial business combination. We will be classified as a United
States real property holding corporation if the fair market value of our “United States real property interests” equals or exceeds 50% of the sum of the fair market value of our worldwide real property interests plus our other assets used or held for use in a trade or business, as determined for U.S. federal income tax purposes.
Redemption of Class A Common Stock.
The characterization for U.S. federal income tax purposes of the redemption of a Non-U.S. holder’s Class A common stock pursuant to the redemption provisions described in the section of this prospectus entitled “Description of Securities — Common Stock” or pursuant to our purchase of a Non-U.S. holder’s Class A common stock in an open market transaction generally will correspond to the U.S. federal income tax characterization of such a redemption of a U.S. holder’s Class A common stock, as described under “U.S. Holders — Redemption of Class A Common Stock” above, and the consequences of the redemption to the Non-U.S. holder will be as described above under “Non-U.S. Holders — Taxation of Distributions” and “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants,” as applicable. Because it may not be certain at the time a Non-U.S. holder’s Class A Common Stock is redeemed whether such redemption will be treated as a sale of shares or a distribution constituting a dividend, and because such determination will depend in part on a Non-U.S. holder’s particular circumstances, we or the applicable withholding agent may not be able to determine whether (or to what extent) a Non-U.S. holder is treated as receiving a dividend for U.S. federal income tax purposes. Therefore, we or the applicable withholding agent may withhold tax at a rate of 30% on the gross amount of any consideration paid to a Non-U.S. holder in redemption of such Non-U.S. holder’s Class A common stock unless special procedures are available to Non-U.S. holders to certify that they are entitled to exemptions from, or reductions in, such withholding tax. However, there can be no assurance that such special certification procedures will be available. A Non-U.S. holder generally may obtain a refund of any such excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. holders should consult their own tax advisors regarding the application of the foregoing rules in light of their particular facts and circumstances.
Possible Constructive Distributions.
The terms of each warrant provide for an adjustment to the number of shares of Class A common stock for which the warrant may be exercised or to the exercise price of the warrant in certain events, as discussed in the section of this prospectus entitled “Description of Securities — Warrants — Public Stockholders’ Warrants.” An adjustment which has the effect of preventing dilution generally is not a taxable event. Nevertheless, a Non-U.S. holder of warrants would be treated as receiving a constructive distribution from us if, for example, the adjustment increases the holder’s proportionate interest in our assets or earnings and profits (for example, through an increase in the number of shares of Class A common stock that would be obtained upon exercise or through a decrease in the exercise price of the warrants), which adjustment may be made as a result of a distribution of cash or other property, such as other securities, to the holders of shares of our Class A common stock, or as a result of the issuance of a stock dividend to holders of shares of our Class A common stock, in each case, which is taxable to such holders as a distribution. Any constructive distribution received by a Non-U.S. holder would be subject to U.S. federal income tax (including any applicable withholding) in the same manner as if such Non-U.S. holder received a cash distribution from us equal to the fair market value of such increased interest without any corresponding receipt of cash. It is possible that any withholding tax on such a constructive distribution might be satisfied by us or the applicable withholding agent through a sale of a portion of the Non-U.S. holder’s shares of Class A common stock, warrants or other property held or controlled by us or the applicable withholding agent on behalf of the Non-U.S. holder or might be withheld from distributions or proceeds subsequently paid or credited to the Non-U.S. holder.
Information Reporting and Backup Withholding.
Information returns will be filed with the IRS in connection with payments of dividends and the proceeds from a sale or other disposition of our units, shares of Class A common stock and warrants. A Non-U.S. holder may have to comply with certification procedures to establish that it is not a United States person in order to avoid information reporting and backup withholding requirements. The certification procedures required to claim a reduced rate of withholding under a treaty generally will satisfy the certification
requirements necessary to avoid the backup withholding as well. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a Non-U.S. holder will be allowed as a credit against such holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.
FATCA Withholding Taxes.
Provisions commonly referred to as “FATCA” impose withholding of 30% on payments of dividends (including constructive dividends) on our Class A common stock to “foreign financial institutions” (which is broadly defined for this purpose and in general includes investment vehicles) and certain other non-U.S. entities unless various U.S. information reporting and due diligence requirements (generally relating to ownership by United States persons of interests in or accounts with those entities) have been satisfied by, or an exemption applies to, the payee (typically certified as to by the delivery of a properly completed IRS Form W-8BEN-E). Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Under certain circumstances, a Non-U.S. holder might be eligible for refunds or credits of such withholding taxes, and a Non-U.S. holder might be required to file a U.S. federal income tax return to claim such refunds or credits. Thirty percent withholding under FATCA was scheduled to apply to payments of gross proceeds from the sale or other disposition of property that produces U.S.-source interest or dividends beginning on January 1, 2019, but on December 13, 2018, the IRS released proposed regulations that, if finalized in their proposed form, would eliminate the obligation to withhold on gross proceeds. Such proposed regulations also delayed withholding on certain other payments received from other foreign financial institutions that are allocable, as provided for under final Treasury Regulations, to payments of U.S.-source dividends, and other fixed or determinable annual or periodic income. Although these proposed Treasury Regulations are not final, taxpayers generally may rely on them until final Treasury Regulations are issued. However, there can be no assurance that final Treasury Regulations will provide the same exceptionsfrom FATCA withholding as the proposed Treasury Regulations. Prospective investors should consult their tax advisors regarding the effects of FATCA on their investment in our securities.
UNDERWRITING
Evercore Group L.L.C. is acting as sole bookrunner of the offering. The company and the underwriters named below have entered into an underwriting agreement with respect to the units being offered. Subject to the terms and conditions stated in the underwriting agreement dated the date of this prospectus, each underwriter named below has severally agreed to purchase, and we have agreed to sell to that underwriter, the number of units indicated in the following table.
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Underwriters
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|
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Number of Units
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Evercore Group L.L.C.
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15,000,000 |
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Total
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15,000,000 |
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The underwriting agreement provides that the obligations of the underwriters to purchase the units included in this offering is subject to approval of legal matters by counsel and to other conditions. The underwriters are committed to take and pay for all of the units being offered, if any are taken, other than the units covered by the option described below unless and until this option is exercised.
The underwriters have an option to buy up to an additional 2,250,000 units from the company to cover sales by the underwriters of a greater number of units than the total number set forth in the table above. They may exercise that option for 45 days.
The following table shows the per unit and total underwriting discounts and commissions to be paid to the underwriters by the company. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase 2,250,000 additional units.
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Paid by the Company
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|
| |
|
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No Exercise
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|
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Full Exercise
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|
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Per Unit(1)
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|
|
|
$ |
0.45 |
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|
|
|
$ |
0.45 |
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|
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Total(1)
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|
|
|
$ |
6,750,000 |
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|
|
|
$ |
7,762,500 |
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(1)
$0.10 per unit, or $1,500,000 in the aggregate (or $1,725,000 if the underwriters’ over-allotment option is exercised in full), is payable upon the closing of this offering. Includes $0.35 per unit, or $5,250,000 in the aggregate (or $6,037,500 in the aggregate if the over-allotment option is exercised in full) payable to the underwriters for deferred underwriting commissions will be placed in a trust account located in the United States as described herein. The deferred commissions to be released to the underwriters only on and concurrently with completion of an initial business combination.
If the company does not complete its initial business combination within the time period required by its amended and restated certificate of incorporation, the underwriters have agreed that (i) they will forfeit any rights or claims to their deferred underwriting discounts and commissions, including any accrued interest thereon, then in the trust account, and (ii) that the deferred underwriter’s discounts and commissions will be distributed on a pro rata basis, together with any interest earned on the funds held in the trust account and not previously released to the company to pay the company’s taxes, to the public stockholders.
Units sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. After the initial offering of the units, the representative may change the offering price and the other selling terms. The offering of the units by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.
The company and its sponsors, officers, and directors have agreed with the underwriters, subject to certain exceptions, not to, except with the prior written consent of the underwriters, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any units, warrants, shares of Class A common stock or any other securities convertible into, or exercisable, or exchangeable for, shares of Class A common stock during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus; provided, however, that the company may (1) issue and sell the private placement warrants, (2) issue and sell the additional units to cover the underwriters’ over-allotment option (if any), (3) register with the SEC pursuant to an agreement to be entered into concurrently with the issuance and sale
of the securities in this offering, the resale of the founder shares and the private placement warrants or the warrants and shares of Class A common stock issuable upon exercise of the warrants and (4) issue securities in connection with a business combination. The underwriters in their sole discretion may release any of the securities subject to these lock-up agreements at any time without notice.
The company’s initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of the company’s initial business combination and (B) the date following the company’s completion of a liquidation, merger, capital stock exchange or other similar transaction after the company’s initial business combination that results in all of the company’s stockholders having the right to exchange their Class A common stock for cash, securities or other property; except to certain permitted transferees and under certain circumstances as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants.” Any permitted transferees will be subject to the same restrictions and other agreements of the company’s initial stockholders with respect to any founder shares. The company refers to such transfer restrictions throughout this prospectus as the lock-up. Notwithstanding the foregoing, the founder shares will be released from the lockup if the closing price of the company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the company’s initial business combination.
The private placement warrants (including the shares of Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of the company’s initial business combination (except with respect to permitted transferees as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants”).
Prior to the offering, there has been no public market for the units. The initial public offering price has been negotiated among the company and the underwriters. The determination of the per unit offering price was more arbitrary than would typically be the case if the company was an operating company. Among the factors considered in determining initial public offering price were the history and prospects of companies whose principal business is the acquisition of other companies, prior offerings of those companies, the company’s management, the company’s capital structure, and currently prevailing general conditions in equity securities markets, including current market valuations of publicly traded companies considered comparable to the company.
We intend to submit an application to quote the units on Nasdaq under the symbol “AMCIU”.
In connection with the offering, the underwriters may purchase and sell units in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of units than they are required to purchase in the offering, and a short position represents the amount of such sales that have not been covered by subsequent purchases. A “covered short position” is a short position that is not greater than the amount of additional units for which the underwriters’ option described above may be exercised. The underwriters may cover any covered short position by either exercising their option to purchase additional units or purchasing units in the open market. In determining the source of units to cover the covered short position, the underwriters will consider, among other things, the price of units available for purchase in the open market as compared to the price at which they may purchase additional units pursuant to the option described above. “Naked” short sales are any short sales that create a short position greater than the amount of additional units for which the option described above may be exercised. The underwriters must cover any such naked short position by purchasing units in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the units in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of units made by the underwriters in the open market prior to the completion of the offering.
The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representative has repurchased units sold by or for the account of such underwriter in stabilizing or short covering transactions.
Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the company’s units, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of the units. As a result, the price of the common stock may be higher than the price that otherwise might exist in the open market. The underwriters are not required to engage in these activities and may end any of these activities at any time. These transactions may be effected on Nasdaq in the over-the-counter market or otherwise.
The company estimates that their share of the total expenses of the offering, excluding underwriting discounts and commissions, will be approximately $1,000,000.
The company and the selling stockholders have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act of 1933. The company has also agreed to pay the FINRA-related fees and expenses of the underwriter’s legal counsel, not to exceed $25,000.
The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Certain of the underwriters and their respective affiliates have provided, and may in the future provide, a variety of these services to the issuer and to persons and entities with relationships with the issuer, for which they received or will receive customary fees and expenses. Evercore Group L.L.C. will act as financial advisor to the company in connection with our initial business combination. We will pay Evercore Group L.L.C. for such services upon the consummation of our initial business combination a cash fee in an amount equal to $7,500,000.
In the ordinary course of their various business activities, the underwriters and their respective affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of the issuer (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the issuer. The underwriters and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.
European Economic Area and the United Kingdom
In relation to each Member State of the European Economic Area (each a “Member State”), no units have been offered or will be offered pursuant to this prospectus to the public in that Member State prior to the publication of a prospectus in relation to the units which has been approved by the competent authority in that Member State or, where appropriate, approved in another Member State and notified to the competent authority in that Member State, all in accordance with the Prospectus Regulation, except that an offer of our units may be made to the public in that Member State at any time under the following exemptions under the Prospectus Regulation:
(a)
to any legal entity which is a qualified investor as defined under the Prospectus Regulation;
(b)
to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation), subject to obtaining the prior consent of the representative of the underwriters; or
(c)
in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
provided that no such offer of units shall require the company or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
For the purposes of this provision, the expression an “offer of units to the public” in relation to any Member State means the communication in any form and by any means of sufficient information on the
terms of the offer and the units to be offered so as to enable an investor to decide to purchase or subscribe for any units, as the expression may be varied in that Member State by any measure implementing the Prospectus Regulation in that Member State, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
United Kingdom
This prospectus is only being distributed to, and is only directed at, and any offer subsequently made may only be directed at persons in the United Kingdom who are “qualified investors” (as defined in the Prospectus Regulation) (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) and/or (ii) who are high net worth entities, and other persons to whom it may otherwise be lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order and/or (iii) persons to whom it may otherwise be lawfully communicated (each such person being referred to as a “relevant person”) or otherwise in circumstances which have not resulted and will not result in an offer to the public of the units in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on the information included in this document or use it as a basis for taking any action. In the United Kingdom, any investment or investment activity that this document relates to may be made or taken exclusively by relevant persons.
Canada
The units may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the units must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
Hong Kong
The units may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong) (“Companies (Winding Up and Miscellaneous Provisions) Ordinance”) or which do not constitute an invitation to the public within the meaning of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (“Securities and Futures Ordinance”), or (ii) to “professional investors” as defined in the Securities and Futures Ordinance and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance, and no advertisement, invitation or document relating to the units may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to units which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” in Hong Kong as defined in the Securities and Futures Ordinance and any rules made thereunder.
Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the units may not be circulated or distributed, nor may the units be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 4A of the Securities and Futures Act (Chapter 289) of Singapore, as modified or amended from time to time (the “SFA”) pursuant to Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.
Where the units are subscribed or purchased under Section 275 of the SFA by a relevant person which is
(a)
a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
(b)
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor,
securities or securities-based derivatives contracts (each term as defined in Section 2(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares of common stock pursuant to an offer made under Section 275 of the SFA except:
(a)
to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA
(b)
where no consideration is or will be given for the transfer;
(c)
where the transfer is by operation of law;
(d)
as specified in Section 276(7) of the SFA; or
(e)
as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018.
Japan
The units offered in this prospectus have not been and will not be registered under the Financial Instruments and Exchange Law of Japan.
The units have not been offered or sold and will not be offered or sold, directly or indirectly, in Japan or to or for the account of any resident of Japan (including any corporation or other entity organized under the laws of Japan), except (i) pursuant to an exemption from the registration requirements of the Financial Instruments and Exchange Law and (ii) in compliance with any other applicable requirements of Japanese law.
LEGAL MATTERS
White & Case LLP, New York, New York, is acting as counsel in connection with the registration of our securities under the Securities Act, and as such, will pass upon the validity of the securities offered in this prospectus. Cravath, Swaine & Moore LLP, New York, New York, is advising the underwriters in connection with the offering of the securities.
EXPERTS
The financial statements of AMCI Acquisition Corp. II as of January 29, 2021 and for the period from January 28, 2021 (inception) through January 29, 2021 appearing in this prospectus have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report thereon, appearing elsewhere in this prospectus, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the securities we are offering by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information about us and our securities, you should refer to the registration statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.
Upon completion of this offering, we will be subject to the information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at www.sec.gov.
INDEX TO FINANCIAL STATEMENTS
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F-2 |
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Financial Statements:
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F-3 |
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F-4 |
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F-5 |
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F-6 |
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F-7
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors of
AMCI Acquisition Corp. II
Opinion on the Financial Statements
We have audited the accompanying balance sheet of AMCI Acquisition Corp. II (the “Company”) as of January 29, 2021, the related statements of operations, changes in stockholder’s equity and cash flows for the period from January 28, 2021 (inception) through January 29, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 29, 2021, and the results of its operations and its cash flows for the period from January 28, 2021 (inception) through January 29, 2021, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph — Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 to the financial statements, the Company’s ability to execute its business plan is dependent upon its completion of the proposed initial public offering described in Note 3 to the financial statements. The Company has a working capital deficit as of and lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1 and 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Marcum llp
Marcum llp
We have served as the Company’s auditor since 2021.
West Palm Beach, FL
February 12, 2021, except for Notes 1, 2, 5 and 8,
as to which the date is June 14, 2021.
AMCI ACQUISTION CORP. II
BALANCE SHEETS
| |
|
|
March 31, 2021
(Unaudited)
|
|
|
January 29,
2021 (Audited)
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash on hand
|
|
|
|
$ |
874 |
|
|
|
|
$ |
— |
|
|
|
Deferred Offering Costs
|
|
|
|
|
117,082 |
|
|
|
|
|
24,000 |
|
|
|
Total assets
|
|
|
|
$ |
117,956 |
|
|
|
|
$ |
24,000 |
|
|
|
Liabilities and Stockholder’s Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$ |
15,450 |
|
|
|
|
$ |
— |
|
|
|
Promissory note – Related Party
|
|
|
|
|
78,632 |
|
|
|
|
$ |
— |
|
|
|
Total current liabilities
|
|
|
|
|
94,082 |
|
|
|
|
|
— |
|
|
|
Stockholder’s Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Class A common stock, $0.0001 par value; 280,000,000 shares authorized; none issued and outstanding
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 4,312,500 shares issued and outstanding(1)
|
|
|
|
|
431 |
|
|
|
|
|
431 |
|
|
|
Additional paid-in capital
|
|
|
|
|
24,569 |
|
|
|
|
|
24,569 |
|
|
|
Accumulated deficit
|
|
|
|
|
(1,126) |
|
|
|
|
|
(1,000) |
|
|
|
Total Stockholder’s equity
|
|
|
|
|
23,874 |
|
|
|
|
|
24,000 |
|
|
|
Total Liabilities and Stockholder’s Equity
|
|
|
|
$ |
117,956 |
|
|
|
|
$ |
24,000 |
|
|
(1)
Includes up to 562,500 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5.) On May 14, 2021, the sponsor forfeited 718,750 Class B ordinary shares, resulting in the sponsor continuing to hold 4,312,500 Class B ordinary shares. All share and per-share amounts have been retroactively restated to reflect the share surrender.
The accompanying notes are an integral part of the financial statements.
AMCI ACQUISTION CORP. II
STATEMENT OF OPERATIONS
| |
|
|
For the
period from
January 28, 2021
(Inception)
through
March 31, 2021
(Unaudited)
|
|
|
For the
period from
January 28, 2021
(Inception)
through
January 29, 2021
(Audited)
|
|
|
Formation costs
|
|
|
|
$ |
1,126 |
|
|
|
|
$ |
1,000 |
|
|
|
Net loss
|
|
|
|
$ |
(1,126) |
|
|
|
|
$ |
(1,000) |
|
|
|
Basic and diluted weighted average shares outstanding(1)
|
|
|
|
|
3,750,000 |
|
|
|
|
|
3,750,000 |
|
|
|
Basic and diluted net loss per share
|
|
|
|
$ |
(0.00) |
|
|
|
|
$ |
(0.00) |
|
|
(1)
Excludes up to 562,500 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5.) On May 14, 2021, the sponsor forfeited 718,750 Class B ordinary shares, resulting in the sponsor continuing to hold 4,312,500 Class B ordinary shares. All share and per-share amounts have been retroactively restated to reflect the share surrender.
The accompanying notes are an integral part of the financial statements.
AMCI ACQUISTION CORP. II
STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY
For the period from January 28, 2021 (inception) through January 29, 2021 (audited) and for the period January 28, 2021 (inception) through March 31, 2021(unaudited)
| |
|
|
Class B
Ordinary
|
|
|
Additional
Paid-in
Capital
|
|
|
Accumulated
Deficit
|
|
| |
|
|
Shares
|
|
|
Amount
|
|
|
Balance as of January 28, 2021 (inception)
|
|
|
|
|
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
Issuance of Founder shares to Sponsor(1)
|
|
|
|
|
4,312,500 |
|
|
|
|
|
431 |
|
|
|
|
|
24,569 |
|
|
|
|
|
— |
|
|
|
Net loss
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
(1,000) |
|
|
|
Balance as of January 29, 2021 (audited)
|
|
|
|
|
4,312,500 |
|
|
|
|
$ |
431 |
|
|
|
|
$ |
24,569 |
|
|
|
|
$ |
(1,000) |
|
|
|
Net loss (unaudited)
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
(126) |
|
|
|
Balance as of March 31, 2021 (unaudited)
|
|
|
|
|
4,312,500 |
|
|
|
|
$ |
431 |
|
|
|
|
$ |
24,569 |
|
|
|
|
$ |
(1,126) |
|
|
(1)
Includes up to 562,500 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5.) On May 14, 2021, the sponsor forfeited 718,750 Class B ordinary shares, resulting in the sponsor continuing to hold 4,312,500 Class B ordinary shares. All share and per-share amounts have been retroactively restated to reflect the share surrender.
The accompanying notes are an integral part of the financial statements.
AMCI ACQUISTION CORP. II
STATEMENT OF CASH FLOWS
| |
|
|
For the
period from
January 28, 2021
(Inception)
through
March 31, 2020
|
|
|
For the
period from
January 28, 2021
(Inception)
through
January 29, 2021
(Audited)
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
$ |
(1,126) |
|
|
|
|
$ |
(1,000) |
|
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Formation costs paid by related party
|
|
|
|
|
1,000 |
|
|
|
|
|
1,000 |
|
|
|
Net cash used in operating activities
|
|
|
|
|
(126) |
|
|
|
|
|
— |
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of promissory note to related party
|
|
|
|
|
1,000 |
|
|
|
|
|
— |
|
|
|
Net cash provided by financing activities
|
|
|
|
|
1,000 |
|
|
|
|
|
— |
|
|
|
Net change in cash
|
|
|
|
|
874 |
|
|
|
|
|
— |
|
|
|
Cash, Beginning of the period
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Cash, end of the period
|
|
|
|
$ |
874 |
|
|
|
|
$ |
— |
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
Non-cash financing transactions:
|
|
|
|
|
Deferred offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares
|
|
|
|
$ |
24,000 |
|
|
|
|
$ |
24,000 |
|
|
|
Deferred offering costs paid by Sponsor under the promissory note
|
|
|
|
$ |
77,632 |
|
|
|
|
$ |
— |
|
|
|
Deferred offering costs included in accrued offerings costs and expenses
|
|
|
|
$ |
15,450 |
|
|
|
|
$ |
— |
|
|
The accompanying notes are an integral part of the financial statements.
AMCI ACQUISITION CORP. II
NOTES TO FINANCIAL STATEMENTS
Note 1 — Organization, Business Operation And Going Concern Consideration
AMCI Acquisition Corp. II (the “Company”) is a newly organized blank check company incorporated as a Delaware corporation on January 28, 2021. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company has not selected any specific Business Combination target and the Company has not, nor has anyone on its behalf, initiated any substantive discussions, directly or indirectly, with any Business Combination target.
As of January 29, 2021, the Company has neither engaged in any operations nor generated any revenues. All activity for the period from January 28, 2021 (inception) through January 29, 2021 relates to the Company’s formation and the proposed initial public offering described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Proposed Public Offering (as defined below). The Company has selected December 31 as its fiscal year end.
The Company’s sponsor is AMCI Sponsor II LLC, a Delaware limited liability company (the “Sponsor”). The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a proposed public offering of 15,000,000 units at $10.00 per unit (the “Units”) (or 17,250,000 units if the underwriters’ over-allotment option is exercised in full), which is discussed in Note 3 (the “Proposed Public Offering”), and the sale of 3,500,000 warrants (or 3,725,000 warrants if the underwriters’ over-allotment option is exercised in full) (the “Private Placement Warrants”), each exercisable to purchase one share of Class A common stock at $11.50 per share, at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor that will close simultaneously with the Proposed Public Offering. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the value of the assets held in the Trust Account (as defined below) (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the income earned on the Trust Account) at the time of the signing a definitive agreement in connection with the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to complete a Business Combination successfully.
Upon the closing of the Proposed Public Offering, management has agreed that an amount equal to at least $10.00 per Unit sold in the Proposed Public Offering, including the proceeds of the Private Placement Warrants, will be held in a Trust Account (“Trust Account”), located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and will invest only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay taxes, if any, the proceeds from the Proposed Public Offering and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (i) the completion of initial Business Combination, (ii) the redemption of the Company’s public shares if the Company is unable to complete an initial Business Combination within 24 months from the closing of the Proposed Public Offering, subject to applicable law, or (iii) the redemption of the Company’s public shares properly submitted in connection with a stockholder vote to amend its amended and restated certificate of incorporation to modify the
substance or timing of the Company’s obligation to redeem 100% of its public shares if the Company has not consummated an initial Business Combination within 24 months from the closing of the Proposed Public Offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public stockholders.
The Company will provide its public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) without a stockholder vote by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a proposed Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem all or a portion of their public shares upon the completion of the initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations and on the conditions described herein. The amount in the Trust Account is initially anticipated to be $10.00 per public share. The per share amount the Company will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the representative of the underwriters.
The shares of common stock subject to redemption will be recorded at a redemption value and classified as temporary equity upon the completion of the Proposed Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.
The Company will have only 24 months from the closing of the Proposed Public Offering to complete the initial Business Combination (the “Combination Period”). However, if the Company is unable to complete the initial Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, liquidate and dissolve, subject, in each case, to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
The Sponsor, officers and directors have agreed to (i) waive their redemption rights with respect to any Founder Shares and public shares they hold in connection with the completion of the initial Business Combination, (ii) waive their redemption rights with respect to any Founder Shares and public shares they hold in connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation, (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to complete the initial Business Combination within the Combination Period, and (iv) vote their Founder Shares and any public shares purchased during or after the Proposed Public Offering in favor of the initial Business Combination.
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the
liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the Proposed Public Offering against certain liabilities, including liabilities under the Securities Act. However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believes that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Going Concern Consideration
As of March 31, 2021, the Company had $874 in cash and a working capital deficit of $93,208 (excluding deferred offering costs). The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management plans to address this uncertainty through a Proposed Public Offering as discussed in Note 3. There is no assurance that the Company’s plans to raise capital or to consummate a Business Combination will be successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 2 — Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2021 and January 29, 2021.
Deferred Offering Costs
Deferred offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholders’ equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations.
Net Loss Per Common Share
Net loss per common share is computed by dividing net loss by the weighted average number of common stocks outstanding during the period, excluding common stocks subject to forfeiture by the Sponsor. Weighted average shares were reduced for the effect of an aggregate of 562,500 common stocks that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Note 5). At March 31, 2021 and January 29, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stocks and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.
Income Taxes
The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2021 and January 29, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company has identified the United States as its only “major” tax jurisdiction.
The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
The provision for income taxes was deemed to be immaterial for the period from January 28, 2021 (inception) through March 31, 2021.
Warrant Liability
The Company accounts for warrants for shares of the Company’s ordinary shares that are not indexed to its own shares as liabilities at fair value on the balance sheet. The warrants will be re-evaluated for the proper accounting treatment at each reporting period and are subject to remeasurement at each balance sheet date and any change in fair value is recognized as a component of other income (expense), net on the statement of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the ordinary share warrants. At that time, the portion of the liability related to the ordinary share warrants will be reclassified to additional paid-in capital (Note 8).
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
Note 3 — Proposed Public Offering
Pursuant to the Proposed Public Offering, the Company intends to offer for sale 15,000,000 Units, (or 17,250,000 Units if the underwriters’ over-allotment option is exercised in full) at a price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and one-half of one redeemable warrant. Each whole warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment. Only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The warrants will become exercisable on the later of 30 days after the completion of the initial Business Combination or 12 months from the closing of the Proposed Public Offering, and will expire five years after the completion of the initial Business Combination or earlier upon redemption or liquidation.
Note 4 — Private Placement
The Sponsor has agreed to purchase an aggregate of 3,500,000 warrants (or 3,725,000 warrants if the underwriters’ over-allotment option is exercised in full) at a price of $1.00 per warrant, for an aggregate purchase price of $3,500,000, or $3,725,000 if the underwriters’ over-allotment option is exercised in full.
The Private Placement Warrants will not be redeemable by the Company so long as they are held by the initial purchasers or their permitted transferees. The initial purchasers, or their permitted transferees, have the option to exercise the Private Placement Warrants on a cashless basis. If the Private Placement Warrants are held by holders other than initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the units being sold in the Proposed Public Offering. Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in the Proposed Public Offering.
If the Private Placement Warrants are held by holders other than the sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in the Proposed Public Offering.
Note 5 — Related Party Transactions
Founder Shares
On January 29, 2021, the Sponsor paid $25,000, or approximately $0.005 per share, to cover certain offering costs in consideration for 5,031,250 shares of Class B common stock, par value $0.0001 (the “Founder Shares”). Up to 656,250 Founder Shares are subject to forfeiture by the Sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. on May 14, 2021, the Sponsor surrendered 718,750 founder shares to the Company for no consideration, resulting in the Sponsor owning 4,312,500 founder shares. Up to 562,500 of the founder shares will be forfeited depending on the extent to which the underwriters’ over-allotment is exercised
The initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares and any Class A common stocks issuable upon conversion thereof until the earlier to occur of: (A) one year after the completion of the initial Business Combination and (B) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction after the Company’s initial Business Combination that results in all of the Company’s stockholders having the right to exchange their Class A common stock for cash, securities or other property; except to certain permitted transferees and under certain circumstances (the “Lock-up”). Any permitted transferees will be subject to the same restrictions and other agreements of the company’s initial stockholders with respect to any Founder Shares. Notwithstanding the foregoing, the Founder Shares will be released from the Lock-up if the closing price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the company’s initial Business Combination.
Promissory Note — Related Party
On January 29, 2021, the Sponsor agreed to loan the Company up to $300,000 to be used for a portion of the expenses of the Proposed Public Offering. These loans are non-interest bearing, unsecured and are due at the earlier of June 30, 2021 or the closing of the Proposed Public Offering. The loan will be repaid upon the closing of the Proposed Public Offering out of the $1,000,000 of offering proceeds that has been allocated to the payment of offering expenses. As of March 31, 2021 and January 29, 2021, the Company had made any borrowings of $78,632 and 0 under the promissory note, respectively.
Related Party Loans
In addition, in order to finance transaction costs in connection with an intended Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required on a non-interest basis (“Working Capital Loans”). If the Company completes the initial Business Combination, it would repay the Working Capital Loans. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants. Except as set forth above, the terms of Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. As of March 31, 2021 and January 29, 2021, the Company had no borrowings under the Working Capital Loans.
Administrative Service Fee
Subsequent to the closing of the Proposed Public Offering, the Company will pay its Sponsor $10,000 per month for office space, secretarial and administrative services provided to members of the management team. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees.
Note 6 — Commitments & Contingencies
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Registration Rights
The holders of the (i) Founder Shares, which were issued in a private placement prior to the closing of the Proposed Public Offering, (ii) Private Placement Warrants, which will be issued in a private placement
simultaneously with the closing of the Proposed Public Offering and the shares of Class A common stock underlying such Private Placement Warrants and (iii) Private Placement Warrants that may be issued upon conversion of Working Capital Loans will have registration rights to require the Company to register a sale of any of its securities held by them prior to the consummation of the initial Business Combination pursuant to a registration rights agreement to be signed prior to or on the effective date of the Proposed Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of its initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriters Agreement
The Company will grant the underwriters a 45-day option from the date of this prospectus to purchase up to an additional 2,250,000 units to cover over-allotments, if any.
The underwriters will be entitled to a cash underwriting discount of one percent (1%) of the gross proceeds of the Proposed Public Offering, or $1,500,000 (or up to $1,725,000 if the underwriters’ over-allotment is exercised in full). Additionally, the underwriters will be entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the Proposed Public Offering upon the completion of the Company’s initial Business Combination.
Note 7 — Stockholders’ Equity
Preferred stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 and provides that shares of preferred stock may be issued from time to time in one or more series. The Company’s board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. As of March 31, 2021 and January 29, 2021, there were no preferred stock issued or outstanding.
Class A common stock — The Company is authorized to issue 280,000,000 shares of Class A common stock with a par value of $0.0001 per share. At March 31, 2021 and January 29, 2021, there were no Class A common stock issued or outstanding.
Class B common stock — The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders are entitled to one vote for each share of Class B common stock. At March 31, 2021 and January 29, 2021, there were 4,312,500 shares of Class B common stock issued and outstanding. Of the 4,312,500 shares of Class B common stock, an aggregate of up to 562,500 shares are subject to forfeiture to the Company for no consideration to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the initial stockholders will collectively own 20% of the Company’s issued and outstanding common stocks after the Proposed Public Offering.
Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of the Company’s stockholders except as required by law. Unless specified in the Company’s amended and restated certificate of incorporation, or as required by applicable provisions of the DGCL or applicable stock exchange rules, the affirmative vote of a majority of the Company’s shares of common stock that are voted is required to approve any such matter voted on by its stockholders.
The Class B common stock will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of the initial Business Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with the initial Business Combination, the number of shares of Class A common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock
by public stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to the Sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of founder shares will never occur on a less than one-for-one basis.
Note 8 — Warrant Liabilities
The Company will account for the 11,000,000 Warrants to be issued in connection with the Proposed Offering (the 7,500,000 public Warrants and the 3,500,000 Private Placement Warrants assuming the underwriters’ over-allotment option is not exercised) in accordance with the guidance contained in ASC 815-40. Such guidance provides that, because the Warrants do not meet the criteria for equity treatment thereunder, each Warrant must be recorded as a liability. Accordingly, the Company will classify each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the Warrant liability will be adjusted to fair value, with the change in fair value recognized in the company’s statement of operations.
No warrants are currently outstanding. Each whole warrant entitles the registered holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing 30 days after the completion of the initial Business Combination, provided that the Company has an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement) and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder. The warrants will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Company has agreed that as soon as practicable, but in no event later than fifteen (15) business days after the closing of the initial Business Combination, it will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A common stock issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the sixtieth (60th) business day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Company’s Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain in effect a registration statement, and in the event the Company do not so elect, it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00.
Once the warrants become exercisable, the Company may redeem the outstanding warrants:
•
in whole and not in part;
•
at a price of $0.01 per warrant;
•
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
•
if, and only if, the closing price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders.
Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00.
Once the warrants become exercisable, the Company may redeem the outstanding warrants:
in whole and not in part;
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” (as defined below) of our Class A common stock except as otherwise described below; and
if, and only if, the closing price of our Class A common stock equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within the 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders.
In addition, if (x) the Company issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any founder shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummate the initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described above under “— Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described above under “— Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
Note 9 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based on this review, the Company did not identify any additional subsequent events that would have required adjustment or disclosure in the financial statements, except as set forth below.
On April 12, 2021, the SEC issued a statement with respect to the accounting for warrants issued by special purchase acquisition companies. In light of the SEC Staff’s Statement, the Company has determined that the fair value of the warrants should be classified as a warrant liability on the Company’s balance sheet as of the closing of the Proposed Public Offering that will be filed.
On May 14, 2021, the Sponsor surrendered 718,750 founder shares to the Company for no consideration,resulting in the Sponsor owning 4,312,500 founder shares.
15,000,000 Units
AMCI Acquisition Corp. II
PRELIMINARY PROSPECTUS
Sole Book-Running Manager
Evercore ISI
Until , 2021 (25 days after the date of this prospectus), all dealers that buy, sell or trade our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
No dealer, salesperson or any other person is authorized to give any information or make any representations in connection with this offering other than those contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or a solicitation of an offer to buy any securities by anyone in any jurisdiction in which the offer or solicitation is not authorized or is unlawful.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions) will be as follows:
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SEC expenses
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|
|
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$ |
30,000 |
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|
| |
FINRA expenses
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|
|
|
|
41,000 |
|
|
| |
Accounting fees and expenses
|
|
|
|
|
40,000 |
|
|
| |
Printing and engraving expenses
|
|
|
|
|
40,000 |
|
|
| |
Travel and road show expenses
|
|
|
|
|
25,000 |
|
|
| |
Legal fees and expenses
|
|
|
|
|
300,000 |
|
|
| |
Nasdaq listing and filing fees
|
|
|
|
|
75,000 |
|
|
| |
Director & Officers liability insurance premiums(1)
|
|
|
|
|
350,000 |
|
|
| |
Miscellaneous
|
|
|
|
|
99,000 |
|
|
| |
Total
|
|
|
|
|
1,000,000 |
|
|
(1)
This amount represents the approximate amount of annual director and officer liability insurance premiums the registrant anticipates paying following the completion of its initial public offering and until it completes an initial business combination.
Item 14. Indemnification of Directors and Officers.
Our amended and restated certificate of incorporation will provide that all of our directors, officers, employees and agents shall be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the Delaware General Corporation Law (“DGCL”). Section 145 of the Delaware General Corporation Law concerning indemnification of officers, directors, employees and agents is set forth below.
Section 145. Indemnification of officers, directors, employees and agents; insurance.
(a)
A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.
(b)
A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
(c)
To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
(d)
Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.
(e)
Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former officers and directors or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
(f)
The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to such provision after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
(g)
A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section.
(h)
For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.
(i)
For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.
(j)
The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(k)
The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any by law, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
In accordance with Section 102(b)(7) of the DGCL, our amended and restated certificate of incorporation, will provide that no director shall be personally liable to us or any of our stockholders for monetary damages resulting from breaches of their fiduciary duty as directors, except to the extent such limitation on or exemption from liability is not permitted under the DGCL. The effect of this provision of our amended and restated certificate of incorporation is to eliminate our rights and those of our stockholders (through stockholders’ derivative suits on our behalf) to recover monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from negligent or grossly negligent behavior, except, as restricted by Section 102(b)(7) of the DGCL. However, this provision does not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s duty of care.
If the DGCL is amended to authorize corporate action further eliminating or limiting the liability of directors, then, in accordance with our amended and restated certificate of incorporation, the liability of our directors to us or our stockholders will be eliminated or limited to the fullest extent authorized by the
DGCL, as so amended. Any repeal or amendment of provisions of our amended and restated certificate of incorporation limiting or eliminating the liability of directors, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to further limit or eliminate the liability of directors on a retroactive basis.
Our amended and restated certificate of incorporation will also provide that we will, to the fullest extent authorized or permitted by applicable law, indemnify our current and former officers and directors, as well as those persons who, while directors or officers of our corporation, are or were serving as directors, officers, employees or agents of another entity, trust or other enterprise, including service with respect to an employee benefit plan, in connection with any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, against all expense, liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by any such person in connection with any such proceeding.
Notwithstanding the foregoing, a person eligible for indemnification pursuant to our amended and restated certificate of incorporation will be indemnified by us in connection with a proceeding initiated by such person only if such proceeding was authorized by our board of directors, except for proceedings to enforce rights to indemnification.
The right to indemnification which will be conferred by our amended and restated certificate of incorporation is a contract right that includes the right to be paid by us the expenses incurred in defending or otherwise participating in any proceeding referenced above in advance of its final disposition, provided, however, that if the DGCL requires, an advancement of expenses incurred by our officer or director (solely in the capacity as an officer or director of our corporation) will be made only upon delivery to us of an undertaking, by or on behalf of such officer or director, to repay all amounts so advanced if it is ultimately determined that such person is not entitled to be indemnified for such expenses under our amended and restated certificate of incorporation or otherwise.
The rights to indemnification and advancement of expenses will not be deemed exclusive of any other rights which any person covered by our amended and restated certificate of incorporation may have or hereafter acquire under law, our amended and restated certificate of incorporation, our bylaws, an agreement, vote of stockholders or disinterested directors, or otherwise.
Any repeal or amendment of provisions of our amended and restated certificate of incorporation affecting indemnification rights, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. Our amended and restated certificate of incorporation will also permit us, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other that those specifically covered by our amended and restated certificate of incorporation.
Our bylaws, which we intend to adopt immediately prior to the closing of this offering, include the provisions relating to advancement of expenses and indemnification rights consistent with those which will be set forth in our amended and restated certificate of incorporation. In addition, our bylaws provide for a right of indemnity to bring a suit in the event a claim for indemnification or advancement of expenses is not paid in full by us within a specified period of time. Our bylaws also permit us to purchase and maintain insurance, at our expense, to protect us and/or any director, officer, employee or agent of our corporation or another entity, trust or other enterprise against any expense, liability or loss, whether or not we would have the power to indemnify such person against such expense, liability or loss under the DGCL.
Any repeal or amendment of provisions of our bylaws affecting indemnification rights, whether by our board of directors, stockholders or by changes in applicable law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis,
and will not in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.
We will enter into indemnification agreements with each of our officers and directors a form of which is to be filed as an exhibit to this Registration Statement. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.
Pursuant to the Underwriting Agreement to be filed as Exhibit 1.1 to this Registration Statement, we have agreed to indemnify the underwriters and the underwriters have agreed to indemnify us against certain civil liabilities that may be incurred in connection with this offering, including certain liabilities under the Securities Act.
Item 15. Recent Sales of Unregistered Securities.
On January 29, 2021, AMCI Sponsor II LLC, our sponsor, subscribed for an aggregate 5,031,250 founder shares for a total subscription price of $25,000, or approximately $0.005 per share. In March 2021, our sponsor transferred all of the founder shares held by it to members of our board of directors, our management team and persons or entities affiliated with AMCI Group. Such shares are fully paid, and the cash amount of the subscription price therefor was received on January 29, 2021. Such securities were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
In March 2021, our sponsor transferred all of the founder shares held by it to members of our board of directors, our management team and persons or entities affiliated with AMCI Group. On May 14, 2021, certain of our initial stockholders forfeited an aggregate of 718,750 founder shares, resulting in an aggregate of 4,312,500 founder shares outstanding. The number of founder shares outstanding was determined based on the expectation that the total size of this offering would be a maximum of 17,250,000 units if the underwriters’ over-allotment option is exercised in full, and therefore that such founder shares would represent 20% of the outstanding shares after this offering. Up to 562,500 of the founder shares will be forfeited depending on the extent to which the underwriters’ over-allotment option is exercised.
Nimesh Patel is the managing member of our sponsor. Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D. Each of the equity holders in our sponsor is an accredited investor under Rule 501 of Regulation D. The sole business of our sponsor is to act as the company’s sponsor in connection with this offering. The limited liability company agreement of our sponsor provides that its membership interests may only be transferred to our officers or directors or other persons affiliated with our sponsor, or in connection with estate planning transfers.
Our sponsor has committed, pursuant to a written agreement, to purchase from us an aggregate of 3,500,000 private placement warrants (or 3,725,000 warrants if the underwriters’ over-allotment option is exercised in full) at $1.00 per warrant (for an aggregate purchase price of $3,500,000 (or $3,725,000 if the underwriters’ over-allotment option is exercised in full)). This purchase will take place on a private placement basis simultaneously with the completion of our initial public offering. This issuance will be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
No underwriting discounts or commissions were paid with respect to such sales.
Item 16. Exhibits and Financial Statement Schedules.
(a)
Exhibits. The following exhibits are being filed herewith:
EXHIBIT INDEX
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Exhibit No
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Description
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1.1
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3.1
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3.2
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3.3
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4.1
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4.2
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4.3
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4.4
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Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant.
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5.1
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10.1
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Form of Letter Agreement among the Registrant, AMCI Sponsor II LLC, Nimesh Patel, Brian Beem, Patrick Murphy, Hans Mende, Jill Watz, Mark Pinho, Adrian Paterson, Kate Burson, Walker Woodson and AMCI Group, LLC Series 35.
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10.2
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Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant.
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10.3
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Form of Registration Rights Agreement among the Registrant, AMCI Sponsor II LLC and the Holders signatory thereto.
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10.4
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Form of Private Placement Warrants Purchase Agreement between the Registrant and AMCI Sponsor II LLC.
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10.5
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10.6
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10.7
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10.8
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10.9
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14
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23.1
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23.2
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24
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99.1
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99.2
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99.3
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99.4
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*
Previously filed.
(b)
Financial Statements. See page F-1 for an index to the financial statements and schedules included in the registration statement.
Item 17. Undertakings.
(a)
The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
(b)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(c)
The undersigned registrant hereby undertakes that:
(d)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(e)
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Greenwich, State of Connecticut on the 14th day of June, 2021.
AMCI Acquisition Corp. II
By:
/s/ Nimesh Patel
Nimesh Patel
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
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Name
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Position
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Date
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/s/ Nimesh Patel
Nimesh Patel
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Chief Executive Officer and Director (Principal Executive Officer)
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June 14, 2021
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*
Patrick Murphy
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Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
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June 14, 2021
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*
Hans Mende
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Director
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June 14, 2021
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*
Brian Beem
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Director
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June 14, 2021
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* By: /s/ Nimesh Patel
Attorney-in-Fact
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Exhibit 1.1
15,000,000 Units
AMCI Acquisition Corp. II
UNDERWRITING AGREEMENT
[●], 2021
EVERCORE GROUP L.L.C.
As Representative of the several Underwriters
c/o EVERCORE GROUP L.L.C.
55 E. 52nd St.
New York, NY 10055
Ladies and Gentlemen:
Introductory. AMCI
Acquisition Corp. II, a Delaware corporation (the “Company”), proposes to issue and sell to the several underwriters
named in Schedule A (the “Underwriters”) an aggregate of 15,000,000 units of the Company (the “Units”).
The 15,000,000 Units to be sold by the Company are collectively called the “Firm Securities.” In addition, the Company
has granted to the Underwriters an option to purchase up to an additional 2,250,000 Units as provided in Section 2. The additional 2,250,000
Units to be sold by the Company pursuant to such option are collectively called the “Optional Securities.” The Firm
Securities and, if, and to the extent, such option is exercised, the Optional Securities are collectively called the “Offered
Securities.” Evercore Group L.L.C. (“Evercore”) has agreed to act as representative of the several Underwriters
(in such capacity, the “Representative”) in connection with the offering of the Offered Securities for sale to the
public as contemplated in the Prospectus (as defined below) (the “Offering”). To the extent there are no additional
underwriters listed on Schedule A, the term “Representative” as used herein shall mean you, as Underwriter, and the
term “Underwriters” shall mean either the singular or the plural, as the context requires.
Each Unit consists of
one share of the Company’s Class A common stock, par value $0.0001 per share (“Class A Common Stock”), and
one-half of one warrant, where each whole warrant entitles the holder to purchase one share of Class A Common Stock (the
“Warrant(s)”). The shares of Class A Common Stock and Warrants included in the Units will not trade separately
until the 52nd day following the date of the Prospectus (as defined below) (unless the Representative informs the Company of its
decision to allow earlier separate trading), subject to (a) the Company’s preparation of an audited balance sheet reflecting
the receipt by the Company of the proceeds of the Offering, (b) the filing of such audited balance sheet with the U.S. Securities
and Exchange Commission (the “Commission”) on a Form 8-K or similar form by the Company that includes such
audited balance sheet, and (c) the Company having issued a press release announcing when such separate trading will begin. Each
whole Warrant entitles its holder, upon exercise, to purchase one share of Class A Common Stock for $11.50 per share during the
period commencing on the later of 30 days after the completion of an initial Business Combination (as defined below) or 12 months
from the date of the closing of the Offering and terminating on the five-year anniversary of the date of the completion of such
initial Business Combination or earlier upon redemption or liquidation. As used herein, the term “Business
Combination” (as described more fully in the Registration Statement (as defined below)) shall mean a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses involving
the Company.
The Company has prepared and
filed with the Commission a registration statement on Form S-1, File No. 333-253107 which contains a form of prospectus to be used
in connection with the Offering and sale of the Offered Securities. Such registration statement, as amended, including the financial statements,
exhibits and schedules thereto, in the form in which it became effective under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (collectively, the “Securities Act”), including any information deemed to be a part
thereof at the time of effectiveness pursuant to Rule 430A under the Securities Act, is called the “Registration Statement.”
Any registration statement filed by the Company pursuant to Rule 462(b) under the Securities Act in connection with the offer and
sale of the Offered Securities is called the “Rule 462(b) Registration Statement,” and from and after the date and
time of filing of any such Rule 462(b) Registration Statement the term “Registration Statement” shall include the Rule 462(b)
Registration Statement. The prospectus, in the form first used by the Underwriters to confirm sales of the Offered Securities or in the
form first made available to the Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities
Act, is called the “Prospectus.” The preliminary prospectus dated [●], 2021 describing the Offered Securities
and the Offering thereof is called the “Preliminary Prospectus,” and the Preliminary Prospectus and any other prospectus
in preliminary form that describes the Offered Securities and the Offering thereof and is used prior to the filing of the Prospectus is
called a “preliminary prospectus.” As used herein, “Applicable Time” is [●] p.m. (New
York City time) on [●], 2021. As used herein, “Effective Date” means the date and time at which such registration
statement, or the most recent post-effective amendment thereto, was declared effective by the Commission in accordance with the rules
and regulations under the Securities Act. As used herein, “free writing prospectus” has the meaning set forth in Rule
405 under the Securities Act, and “Time of Sale Prospectus” means the Preliminary Prospectus together with the Time
of Delivery Information, if any, set forth on Schedule B hereto. As used herein, “Road Show” means a “road
show” (as defined in Rule 433 under the Securities Act) relating to the Offering contemplated hereby that is a “written communication”
(as defined in Rule 405 under the Securities Act). As used herein, “Section 5(d) Written Communication” means each
written communication (within the meaning of Rule 405 under the Securities Act) that is made in reliance on Section 5(d) of the Securities
Act by the Company or any person authorized to act on behalf of the Company to one or more potential investors that are qualified institutional
buyers (“QIBs”) and/or institutions that are accredited investors (“IAIs”), as such terms are respectively
defined in Rule 144A and Rule 501(a) under the Securities Act, to determine whether such investors might have an interest in the Offering;
“Section 5(d) Oral Communication” means each oral communication, if any, made in reliance on Section 5(d) of the Securities
Act by the Company or any person authorized to act on behalf of the Company made to one or more QIBs and/or one or more IAIs to determine
whether such investors might have an interest in the Offering; “Marketing Materials” means any materials or information
provided to investors by, or with the approval of, the Company in connection with the marketing of the Offering, including any Road Show
or investor presentations made to investors by the Company (whether in person or electronically); and “Permitted Section 5(d)
Communication” means the Section 5(d) Written Communication(s) and Marketing Materials listed on Schedule C attached
hereto.
All references in this Agreement
to the Registration Statement, any preliminary prospectus (including the Preliminary Prospectus), or the Prospectus, or any amendments
or supplements to any of the foregoing shall include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System (“EDGAR”).
The Company has entered into
a Securities Subscription Agreement, dated as of January 29, 2021 (the “Subscription Agreement”), with AMCI Sponsor
II LLC, a Delaware limited liability company (the “Sponsor”), in substantially the form filed as Exhibit 10.7 to the
Registration Statement, pursuant to which the Sponsor purchased an aggregate of 5,031,250 shares of Class B common stock, par value $0.0001
per share, of the Company for an aggregate purchase price of $25,000, or approximately $0.005 per share (the “Founder Shares”).
In March 2021, the Sponsor transferred an aggregate of 5,031,250 Founder Shares to the Company’s officers and directors and entities
and persons affiliated with AMCI Group. On May 14, 2021, certain of the Company’s initial stockholders forfeited an aggregate of
718,750 founder shares, resulting in an aggregate of 4,312,500 Founder Shares outstanding. Up to 656,250 of the Founder Shares are subject
to forfeiture depending on the extent to which the Underwriters’ over-allotment option is exercised. The Founder Shares are substantially
similar to the Class A Common Stock included in the Units except as described in the Prospectus.
On [●], 2021, the Sponsor
subscribed to purchase an aggregate of 3,500,000 warrants (or up to 3,725,000 warrants if the option to purchase additional Units as provided
in Section 2 is exercised in full), each entitling the holder to purchase one share of Class A Common Stock at an exercise price of $11.50
per share (the “Sponsor Warrants”) and the Company entered into a Private Placement Warrants Purchase Agreement with
the Sponsor (the “Warrant Subscription Agreement”) in substantially the form filed as Exhibit 10.4 to the Registration
Statement. Except as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus, the Sponsor Warrants have
the same terms as the Warrants included in the Units.
The Company has entered into
an Investment Management Trust Agreement, effective as of [●], 2021, with Continental Stock Transfer & Trust Company (“CST”),
as trustee, in substantially the form filed as Exhibit 10.3 to the Registration Statement (the “Trust Agreement”),
pursuant to which the proceeds from the sale of the Sponsor Warrants and certain proceeds of the Offering and sale of the Offered Securities
will be deposited and held in a trust account (the “Trust Account”) for the benefit of the Company, the Underwriters
and the Public Stockholders (as defined below).
The Company has entered into
a Warrant Agreement, effective as of [●], 2021, with respect to the Warrants, the Sponsor Warrants and any warrants issued upon
the conversion of working capital loans by the Sponsor or its affiliates or the Company’s officers and directors to the Company
(the “Working Capital Warrants”) with CST, as warrant agent, in substantially the form filed as Exhibit 4.4 to the
Registration Statement (the “Warrant Agreement”), pursuant to which CST will act as warrant agent in connection with
the issuance, registration, transfer, exchange, redemption, and exercise of the Warrants, the Sponsor Warrants and the Working Capital
Warrants.
The Company has entered
into a Registration Rights Agreement, dated as of [●], 2021, with the Sponsor and the other parties thereto, in substantially
the form filed as Exhibit 10.3 to the Registration Statement (the “Registration Rights Agreement”), pursuant to
which the Company has granted certain registration rights in respect of the Founder Shares, the Sponsor Warrants and warrants that
may be issued upon conversion of working capital loans and any shares of Class A Common Stock issuable upon the exercise of the
Sponsor Warrants and warrants that may be issued upon conversion of working capital loans and upon conversion of the Founder
Shares.
The Company has caused to
be duly executed and delivered a letter agreement, dated [●], 2021, by and among the Sponsor, AMCI Group, LLC Series 35 (“Series
35”) and each of the Company’s officers, directors and director nominees prior to the Offering, in substantially the form
filed as Exhibit 10.1 to the Registration Statement (the “Insider Letter”).
The Company has entered into
an Administrative Support Agreement, dated as of [●], 2021, with the Sponsor, in substantially the form filed as Exhibit 10.8 to
the Registration Statement (the “Administrative Support Agreement”), pursuant to which the Company will pay to the
Sponsor an aggregate monthly fee of $10,000 for office space, secretarial and administrative services.
The Company hereby confirms
its agreements with the Underwriters as follows:
Section
1. Representations
and Warranties of the Company.
The Company hereby represents,
warrants and covenants to each Underwriter, as of the date of this Agreement, as of the First Closing Date (as hereinafter defined) and
as of each Option Closing Date (as hereinafter defined), if any, as follows:
(a) Compliance with Registration Requirements. The Registration Statement and the Exchange Act Registration
Statement (as defined below) have become effective under the Securities Act. The Company has complied, to the Commission’s satisfaction
with all requests of the Commission for additional or supplemental information, if any. No stop order suspending the effectiveness of
the Registration Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the best knowledge
of the Company, are contemplated or threatened by the Commission.
(b) Disclosure. Each
preliminary prospectus and the Prospectus when filed complied in all material respects with the Securities Act and, if filed by
electronic transmission pursuant to EDGAR, was identical (except as may be permitted by Regulation S-T under the Securities Act)
to the copy thereof delivered to the Underwriters for use in connection with the offer and sale of the Offered Securities. Each of
the Registration Statement and any post-effective amendment thereto, at the time it became or becomes effective, complied and will
comply in all material respects with the Securities Act and did not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. As of the
Applicable Time, the Time of Sale Prospectus did not, and at the First Closing Date (as defined in Section 2) and at each applicable
Option Closing Date (as defined in Section 2), will not, contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The
Prospectus, as of its date, did not, and at the First Closing Date and at each applicable Option Closing Date, will not, contain any
untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. The representations and warranties set forth in the three
immediately preceding sentences do not apply to statements in or omissions from the Registration Statement or any post-effective
amendment thereto, or the Prospectus or the Time of Sale Prospectus, or any amendments or supplements thereto, made in reliance upon
and in conformity with written information relating to any Underwriter furnished to the Company in writing by the Representative
expressly for use therein, it being understood and agreed that the only such information consists of the information described in
Section 8(b) below. There are no contracts or other documents required to be described in the Time of Sale Prospectus or the
Prospectus or to be filed as an exhibit to the Registration Statement which have not been described or filed as required.
(c) Free
Writing Prospectuses; Road Show. As of the determination date referenced in Rule 164(h) under the Securities Act and the date
hereof, the Company was and is an “ineligible issuer” in connection with the Offering pursuant to Rules 164, 405 and 433
under the Securities Act. Except for electronic road shows, if any, furnished to you before first use, the Company has not prepared,
used or referred to, and will not, without your prior written consent, prepare, use or refer to, any free writing prospectus. Each Road
Show, when considered together with the Time of Sale Prospectus, did not, as of the Applicable Time, contain any untrue statement of
a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(d) Distribution of Offering Material By the Company. Prior to the later of (i) the expiration or termination
of the option granted to the several Underwriters in Section 2, (ii) the completion of the Underwriters’ distribution of the Offered
Securities and (iii) the expiration of 25 days after the date of the Prospectus, the Company has not distributed and will not distribute
any offering material in connection with the Offering and sale of the Offered Securities other than the Registration Statement, the Time
of Sale Prospectus, the Prospectus and any Permitted Section 5(d) Communications.
(e) The
Underwriting Agreement. This Agreement has been duly and validly authorized, executed and delivered by the Company, and is a
valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect
and by equitable principles of general applicability.
(f) Filing of a Form 8-A. The Company has filed with the Commission a registration statement (as amended,
the “Exchange Act Registration Statement”) on Form 8-A (file number 001-40282) providing for the registration under
the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the “Exchange
Act”) of certain of the securities of the Company, which registration is currently effective on the date hereof. The Exchange
Act Registration Statement has become effective as provided in Section 12 of the Exchange Act.
(g) Stock Exchange Listing. The Offered Securities, shares of Class A Common Stock and Warrants have been
approved for listing on The Nasdaq Capital Market (the “Nasdaq”), subject only to official notice of issuance.
(h) No Integration. Neither the Company nor any of its affiliates has, prior to the date hereof, made any
offer or sale of any securities that are required to be “integrated” pursuant to the Securities Act with the offer and sale
of the Offered Securities pursuant to the Registration Statement.
(i) Authorization of the Sponsor Warrants. The Sponsor Warrants have been duly authorized by the Company and,
when issued and delivered in the manner set forth in the Warrant Agreement and the Warrant Subscription Agreement, will be duly issued
and delivered and will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their
terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights
generally from time to time in effect and by equitable principles of general applicability.
(j) Authorization
of the Founder Shares. The Founder Shares have been duly authorized and are validly issued, fully paid and non-assessable.
(k) Authorization
of the Offered Securities. The Offered Securities have been duly authorized for issuance and sale pursuant to this Agreement
and, when issued and delivered by the Company against payment therefor pursuant to this Agreement, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by
equitable principles of general applicability, and the issuance and sale of the Offered Securities is not subject to any preemptive rights,
rights of first refusal or other similar rights to subscribe for or purchase the Offered Securities.
(l) Authorization
of the Class A Common Stock. The shares of Class A Common Stock included in the Units have been duly and validly authorized and,
when issued and delivered against payment for the Offered Securities by the Underwriters pursuant to this Agreement, will be duly and
validly issued, fully paid and non-assessable and free of preemptive rights, resale rights, rights of first refusal and similar rights.
(m) Authorization of the Warrants. The Warrants have been duly authorized by the Company and, when issued
and delivered in the manner set forth in the Warrant Agreement against payment for the Offered Securities by the Underwriters pursuant
to this Agreement, will be duly issued and delivered, and will constitute valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar
laws affecting creditors’ rights generally from time to time in effect and by equitable principles of general applicability.
(n) Authorization
of the Class A Common Stock Issuable Upon Exercise of the Warrants and the Sponsor Warrants. The shares of Class A Common
Stock issuable upon exercise of the Warrants included in the Units and the Sponsor Warrants have been duly authorized and reserved
for issuance upon exercise thereof and, when issued and delivered against payment therefor pursuant to the Warrants and the Sponsor
Warrants, as applicable, and the Warrant Agreement, will be validly issued, fully paid and non-assessable. The holders of such Class
A Common Stock are not and will not be subject to personal liability by reason of being such holders; such Class A Common Stock is
not and will not be subject to any preemptive or other similar contractual rights granted by the Company; and all corporate action
required to be taken for the authorization, issuance and sale of such Class A Common Stock (other than such execution,
countersignature and delivery at the time of issuance) has been duly and validly taken.
(o) The
Trust Agreement. The Trust Agreement has been duly authorized, executed and delivered by the Company, and is a valid and binding
agreement of the Company, enforceable against the Company, in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable
principles of general applicability.
(p) The Warrant Agreement. The Warrant Agreement has been duly authorized, executed and delivered by the Company
and is a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect
and by equitable principles of general applicability.
(q) The Subscription Agreement. The Subscription Agreement has been duly authorized, executed and delivered
by the Company and the Sponsor, and is a valid and binding agreement of the Company and the Sponsor, enforceable against the Company and
the Sponsor in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws
affecting creditors’ rights generally from time to time in effect and by equitable principles of general applicability.
(r) The
Warrant Subscription Agreement. The Warrant Subscription Agreement has been duly authorized, executed and delivered by the Company
and the Sponsor, and is a valid and binding agreement of the Company and the Sponsor, enforceable against the Company and the Sponsor
in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting
creditors’ rights generally from time to time in effect and by equitable principles of general applicability.
(s) The
Registration Rights Agreement. The Registration Rights Agreement has been duly authorized, executed and delivered by the Company
and the Sponsor, and each director and officer of the Company, and is a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws
affecting creditors’ rights generally from time to time in effect and by equitable principles of general applicability.
(t) The
Insider Letter. The Insider Letter has been duly authorized, executed and delivered by the Company, the Sponsor and Series
35 and each such executive officer, director and director nominee, respectively, and is a valid and binding agreement of the
Company, the Sponsor and Series 35 and, to the knowledge of the Company, each such executive officer, director and director nominee
of the Company, respectively, enforceable against the Company, the Sponsor and Series 35 and, to the knowledge of the Company, each
such executive officer, director and director nominee of the Company, respectively in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from
time to time in effect and by equitable principles of general applicability.
(u) The
Administrative Support Agreement. The Administrative Support Agreement has been duly authorized, executed and delivered by the
Company, and, assuming the due authorization, execution and delivery thereof by the Sponsor, is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles of general
applicability.
(v) [Reserved].
(w) No
Material Adverse Change. Except as otherwise disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus,
subsequent to the respective dates as of which information is given in the Registration Statement, the Time of Sale Prospectus and the
Prospectus: (i) there has been no material adverse change, or any development that could be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business, properties, operations, assets, liabilities or prospects,
whether or not arising from transactions in the ordinary course of business, of the Company (any such change being referred to herein
as a “Material Adverse Change”); (ii) the Company has not incurred any material liability or obligation, indirect,
direct or contingent, including without limitation any losses or interference with its business from fire, explosion, flood, earthquakes,
accident or other calamity, whether or not covered by insurance, or from any strike, labor dispute or court or governmental action, order
or decree, that are material, individually or in the aggregate, to the Company, or has entered into any transactions not in the ordinary
course of business; and (iii) there has not been any material decrease in the capital stock or any material increase in any short-term
or long-term indebtedness of the Company and there has been no dividend or distribution of any kind declared, paid or made by the Company
on any class of capital stock, or any repurchase or redemption by the Company of any class of capital stock.
(x) No Applicable Registration or Other Similar Rights. There are no persons with registration or other similar
rights to have equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated
by this Agreement.
(y) Independent Accountants. Marcum LLP (“Marcum”), who have certified certain financial
statements of the Company and delivered their report with respect to the audited financial statements (which term as used in this Agreement
includes the related notes thereto) filed with the Commission as a part of the Registration Statement, the Time of Sale Prospectus and
the Prospectus, is a registered public accounting firm that is independent with respect to the Company within the meaning of the Securities
Act and the Exchange Act and the applicable published rules and regulations thereunder.
(z) Financial Statements. The financial statements, including the notes thereto and the supporting schedules,
if any, filed with the Commission as a part of the Registration Statement, the Time of Sale Prospectus and the Prospectus present fairly
the financial position of the Company as of the dates indicated and the results of their operations, changes in stockholders’ equity
and cash flows for the periods specified. Such financial statements and supporting schedules, if any, have been prepared in conformity
with generally accepted accounting principles as applied in the United States applied on a consistent basis throughout the periods involved,
except as may be expressly stated in the related notes thereto. No other financial statements or supporting schedules are required to
be included in the Registration Statement, the Time of Sale Prospectus or the Prospectus. The financial data set forth in each of the
Registration Statement, the Time of Sale Prospectus and the Prospectus under the captions “Summary - Summary Financial Data”
and “Capitalization” fairly present the information set forth therein on a basis consistent with that of the audited financial
statements contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus. There are no pro forma or as adjusted
financial statements that are required to be included in the Registration Statement, the Time of Sale Prospectus and the Prospectus in
accordance with Regulation S-X that have not been included as so required.
(aa) Company’s
Accounting System. The Company makes and keeps accurate books and records and maintains a system of internal accounting controls
sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally
accepted accounting principles as applied in the United States and to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(bb) Disclosure
Controls and Procedures; Deficiencies in or Changes to Internal Control Over Financial Reporting. The Company maintains “disclosure
controls and procedures” as defined under Rule 13a-15(e) under the Exchange Act, to the extent required by such rule.
(cc) Compliance with the Sarbanes-Oxley Act. Solely to the extent that the Sarbanes-Oxley Act of 2002, as amended,
and the rules and regulations promulgated by the Commission and the Nasdaq thereunder (the “Sarbanes-Oxley Act”) has
been applicable to the Company, there is and has been no failure on the part of the Company to comply in all material respects with any
provision of the Sarbanes-Oxley Act. The Company has taken all necessary actions to ensure that it is in compliance with all provisions
of the Sarbanes-Oxley Act that are in effect and with which the Company is required to comply.
(dd) Compliance
with the Nasdaq Rules. There is and has been no failure on the part of the Company or, to the knowledge of the Company, any
of the Company’s officers or directors, in their capacities as such, to comply with (as and when applicable), and immediately
following the Effective Date, the Company will be in compliance with, Nasdaq Marketplace Rules IM-5605. Further, there is and has
been no failure on the part of the Company or, to the knowledge of the Company, any of the Company’s officers or directors, in
their capacities as such, to comply with (as and when applicable), and immediately following the Effective Date, the Company will be
in compliance with, the phase-in requirements and all other provisions of the Nasdaq Stock Market LLC corporate governance
requirements set forth in the Nasdaq Marketplace Rules.
(ee) No Fees Related to this Agreement or the Offering of Offered Securities. There are no transfer, stamp,
issue, registration, documentary or other similar taxes, duties, fees or charges under U.S. federal law or the laws of any state, or any
political subdivision thereof, or under the laws of any non-U.S. jurisdiction, required to be paid in connection with the execution and
delivery of this Agreement or the issuance or sale by the Company of the Offered Securities.
(ff) Incorporation
and Good Standing of the Company. The Company has been duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has the corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus and to enter into
and perform its obligations under this Agreement, the Trust Agreement, the Warrant Agreement, the Subscription Agreement, the Warrant
Subscription Agreement, the Registration Rights Agreement, the Insider Letter and the Administrative Support Agreement. The Company is
duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or the conduct of business.
(gg) Interests
in Other Entities. The Company does not own or control, directly or indirectly, an interest in any corporation, partnership,
limited liability company, joint venture, trust or other entity.
(hh) Capitalization
and Other Capital Stock Matters. The authorized, issued and outstanding capital stock of the Company is as set forth in the Registration
Statement, the Time of Sale Prospectus and the Prospectus under the caption “Capitalization” (other than for subsequent issuances,
if any, pursuant to employee benefit plans, or upon the exercise of outstanding options or warrants, in each case described in the Registration
Statement). The share capital of the Company conforms in all material respects to the description thereof in the Time of Sale Prospectus,
the Registration Statement and the Prospectus. All of the issued and outstanding securities of the Company have been duly authorized
and validly issued, are fully paid and non-assessable and have been issued in compliance with all federal and state securities laws.
None of the outstanding securities was issued in violation of any preemptive rights, rights of first refusal or other similar rights
to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights,
rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for,
any capital stock of the Company other than those described in the Registration Statement, the Time of Sale Prospectus and the Prospectus.
(ii) Sale of Securities of the Company. No securities of the Company have been sold by the Company or by or
on behalf of, or for the benefit of, any person or persons controlling, controlled by, or under common control with the Company from its
inception through and including the date hereof, except as disclosed in the Registration Statement, the Time of Sale Prospectus and the
Prospectus.
(jj) “Penny Stock” Securities. Upon delivery and payment for the Units on the First Closing Date
and any Option Closing Dates, the Company will not be subject to Rule 419 under the Securities Act and none of the Company’s outstanding
securities will be deemed to be a “penny stock” as defined in Rule 3a51-1 under the Exchange Act.
(kk) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals Required. The Company is not in violation of its charter or by-laws
or is in default (or, with the giving of notice or lapse of time, would be in default) (“Default”) under any indenture,
loan, credit agreement, note, lease, license agreement, contract, franchise or other instrument (including, without limitation, any pledge
agreement, security agreement, mortgage or other instrument or agreement evidencing, guaranteeing, securing or relating to indebtedness)
to which the Company is a party or by which it may be bound, or to which any of the Company’s properties or assets are subject
(each, an “Existing Instrument”), except for such Defaults as could not be expected, individually or in the aggregate,
to have a material adverse effect on the financial condition, earnings, business, properties, operations, assets, liabilities or prospects
of the Company (a “Material Adverse Effect”). The Company’s execution, delivery and performance of this Agreement,
the Trust Agreement, the Warrant Agreement, the Subscription Agreement, the Warrant Subscription Agreement, the Registration Rights Agreement,
the Insider Letter or the Administrative Support Agreement, consummation of the transactions contemplated hereby and by the Registration
Statement, the Time of Sale Prospectus and the Prospectus and the issuance and sale of the Offered Securities (including the use of proceeds
from the sale of the Offered Securities as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus under
the caption “Use of Proceeds”) (i) have been duly authorized by all necessary corporate action and will not result in any
violation of the provisions of the charter or by-laws of the Company (ii) will not conflict with or constitute a breach of, or Default
or a Debt Repayment Triggering Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company pursuant to, or require the consent of any other party to, any Existing Instrument and (iii)
will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company. No
consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority
or agency, is required for, or in connection with, the Company’s execution, delivery and performance of this Agreement, the Trust
Agreement, the Warrant Agreement, the Subscription Agreement, the Warrant Subscription Agreement, the Registration Rights Agreement,
the Insider Letter or the Administrative Support Agreement and consummation of the transactions contemplated hereby and by the Registration
Statement, the Time of Sale Prospectus and the Prospectus, except such as have been obtained or made by the Company and are in full force
and effect under the Securities Act and such as may be required under applicable state securities or blue sky laws or the Financial Industry
Regulatory Authority, Inc. (the “FINRA”). As used herein, a “Debt Repayment Triggering Event” means
any event or condition which gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment
of all or a portion of such indebtedness by the Company.
(ll) Compliance
with Laws. The Company has been and is in compliance with all applicable laws, rules and regulations, except where failure to
be so in compliance could not be expected, individually or in the aggregate, to have a Material Adverse Effect.
(mm)
No Material Actions or Proceedings. There is no action, suit, proceeding, inquiry or investigation brought
by or before any governmental entity now pending or, to the knowledge of the Company, threatened, against or affecting the Company or
the Sponsor, which could be expected, individually or in the aggregate, to have a Material Adverse Effect or materially and adversely
affect the consummation of the transactions contemplated by this Agreement, the Trust Agreement, the Warrant Agreement, the Subscription
Agreement, the Warrant Subscription Agreement, the Registration Rights Agreement, the Insider Letter or the Administrative Support Agreement
or the performance by the Company of its obligations hereunder. No material labor dispute with the employees of the Company exists or,
to the knowledge of the Company, is threatened or imminent.
(nn) Intellectual
Property Rights. The Company does not own or possess any inventions, patent applications, patents, trademarks (whether registered
or unregistered), trade names, service names, copyrights, trade secrets or other proprietary information owned or licensed by it; the
Company has not infringed or is infringing the intellectual property of a third party, and the Company has not received notice of a claim
by a third party to the contrary.
(oo) All
Necessary Permits, etc. The Company possesses such valid and current certificates, authorizations or permits required by state,
federal or foreign regulatory agencies or bodies to conduct its business as currently conducted and as described in the Registration
Statement, the Time of Sale Prospectus or the Prospectus (“Permits”). The Company is not in violation of, or in default
under, any of the Permits and has not received any notice of proceedings relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit that, individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could reasonably be expected to have a Material Adverse Effect.
(pp) Title
to Properties. The Company owns or leases all such properties as are necessary to the conduct of its operations as presently
conducted.
(qq) Tax
Law Compliance. The Company has filed all necessary federal, state and foreign income and franchise tax returns or has properly
requested extensions thereof and has paid all taxes required to be paid by it and, if due and payable, any related or similar assessment,
fine or penalty levied against it except as may be being contested in good faith and by appropriate proceedings. The Company has made
adequate charges, accruals and reserves in the applicable financial statements referred to in Section 1(z) above in respect of all federal,
state and foreign income and franchise taxes for all periods as to which the tax liability of the Company has not been finally determined.
(rr) ERISA
Compliance. The Company has not established or maintained any “employee benefit plan” (as defined under the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”)), and thus is not subject to ERISA.
(ss) Insurance. Other
than directors’ and officers’ liability insurance, the Company does not maintain any insurance covering its operations,
personnel and businesses; such directors’ and officers’ liability insurance is in full force and effect on the date
hereof and will be in full force and effect at the time of purchase and each additional time of purchase, if any; the Company does
not have reason to believe that it will not be able to (i) renew any such insurance as and when such insurance expires or (ii)
obtain comparable coverage from similar institutions.
(tt) Company
Not an “Investment Company.” The Company is not, and will not be, either after receipt of payment for the Offered
Securities or after the application of the proceeds therefrom as described under “Use of Proceeds” in the Registration Statement,
the Time of Sale Prospectus or the Prospectus, required to register as an “investment company” under the Investment Company
Act of 1940, as amended (the “Investment Company Act”).
(uu) No Price Stabilization or Manipulation; Compliance with Regulation M. None of the Company, the Sponsor,
or, to the knowledge of the Company, any of their respective directors or officers, affiliates or controlling persons has taken, directly
or indirectly, any action designed to or that might cause or result in stabilization or manipulation of the price of any security of the
Company, whether to facilitate the sale or resale of the Offered Securities or otherwise, which would directly or indirectly violate Regulation
M under the Exchange Act (“Regulation M”).
(vv) Related-Party Transactions. There are no business relationships or related-party transactions involving
the Company or any other person required to be described in the Registration Statement, the Time of Sale Prospectus or the Prospectus
that have not been described as required.
(ww) FINRA
Matters. All of the information provided to the Underwriters or to counsel for the Underwriters by the Company, its counsel,
its officers, directors, director nominees, Sponsor and the holders of any securities (debt or equity) or options to acquire any securities
of the Company in connection with the Offering is true, complete, correct and compliant with FINRA’s rules and any letters, filings
or other supplemental information provided to FINRA pursuant to FINRA Rules is true, complete and correct.
(xx) FINRA
Conflict of Interest. To the Company’s knowledge after reasonable inquiry, there are no affiliations or associations between
(i) any member of FINRA and (ii) the Company or any of the Company’s officers, directors or 5% or greater security holders or any
beneficial owner of the Company’s unregistered equity securities that were acquired at any time on or after the 180th day immediately
preceding the date the Registration Statement was initially filed with the Commission, except as disclosed in the Registration Statement
(excluding the exhibits thereto), the Time of Sale Prospectus and the Prospectus.
(yy) Statistical and Market-Related Data. All statistical, industry-related and market-related data included
in the Registration Statement, the Time of Sale Prospectus or the Prospectus are based on or derived from sources that the Company believes,
after reasonable inquiry, to be reliable and accurate. To the extent required, the Company has obtained the written consent to the use
of such data from such sources.
(zz) No
Unlawful Contributions or Other Payments. None of the Company, the Sponsor, or, to the knowledge of the Company after due
inquiry, any director, director nominee, officer, agent, employee, affiliate or other person associated with or acting on behalf of
the Company, has made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office
in violation of any law or of the character required to be disclosed in the Registration Statement, the Time of Sale Prospectus or
the Prospectus.
(aaa)
Foreign Corrupt Practices Act. None of the Company, the Sponsor, or, to the knowledge of the Company after
due inquiry, any director, director nominee, officer, agent, employee, affiliate or other person associated with or acting on behalf of
the Company, has, in the course of its, his or her actions for, or on behalf of, the Company (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful
payment to any domestic government official, “foreign official” (as defined in the U.S. Foreign Corrupt Practices Act of 1977,
as amended, and the rules and regulations thereunder (collectively, the “FCPA”)) or employee from corporate funds;
(iii) violated or is in violation of any provision of the FCPA or any applicable non-U.S. anti-bribery statute or regulation; or (iv)
made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any domestic government official, such
foreign official or employee; and the Company and, to the knowledge of the Company, the Company’s affiliates have conducted the
business of the Company and their respective businesses on behalf of the Company in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(bbb)
Money Laundering Laws. The operations of the Company, the Sponsor, and, to the knowledge of the Company
after reasonable inquiry, the Company’s affiliates are, and have been conducted at all times, in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations
or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company
with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(ccc)
OFAC. None of the Company, the Sponsor, or, to the knowledge of the Company, any director, director nominee,
officer, agent, employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”), the United Nations Security Council (“UNSC”),
the European Union, Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”),
nor is the Company located, organized or resident in a country or territory that is the subject of Sanctions; and the Company will not
directly or indirectly use the proceeds of this Offering, or lend, contribute or otherwise make available such proceeds to any subsidiary,
or any joint venture partner or other person or entity, for the purpose of financing the activities of or business with any person, or
in any country or territory, that currently is subject to any Sanctions or in any other manner that will result in a violation by any
person (including any person participating in the transaction whether as underwriter, advisor, investor or otherwise) of such Sanctions.
(ddd) Client
Information. The Company acknowledges that, in accordance with the requirements of the USA Patriot Act, the Underwriters are
required to obtain, verify and record information that identifies their respective clients, including the Company, which information
may include the name and address of their respective clients, as well as other information that will allow the Underwriters to
properly identify their respective clients.
(eee)
Brokers. Except as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus,
there is no broker, finder or other party that is entitled to receive from the Company any brokerage or finder’s fee or other fee
or commission as a result of any transactions contemplated by this Agreement.
(fff)
Emerging Growth Company Status. From the time of the initial confidential submission of the Registration
Statement to the Commission (or, if earlier, the first date on which the Company engaged in any Section 5(d) Written Communication or
any Section 5(d) Oral Communication) through the date hereof, the Company has been and is an “emerging growth company,” as
defined in Section 2(a) of the Securities Act (an “Emerging Growth Company”).
(ggg)
Communications with Potential Acquisition Targets. Prior to the date hereof, neither the Company nor anyone
on its behalf has, and as of the Closing Date, neither the Company nor anyone on its behalf will have: (a) identified any Business Combination
target or (b) had any substantive discussions, directly or indirectly, with respect to a possible initial Business Combination.
(hhh)
Communications. The Company (i) has not alone engaged in communications with potential investors in reliance
on Section 5(d) of the Securities Act other than Permitted Section 5(d) Communications with the consent of the Representative with entities
that are QIBs or IAIs and (ii) has not authorized anyone other than the Representative to engage in such communications; the Company reconfirms
that the Representative has been authorized to act on its behalf in undertaking Marketing Materials, Section 5(d) Oral Communications
and Section 5(d) Written Communications; as of the Applicable Time, each Permitted Section 5(d) Communication, when considered together
with the Time of Sale Prospectus, did not, as of the Applicable Time, include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
and each Permitted Section 5(d) Communication, if any, does not, as of the date hereof, conflict with the information contained in the
Registration Statement, the Preliminary Prospectus and the Prospectus; and the Company has filed publicly on EDGAR at least 15 calendar
days prior to any “road show” (as defined in Rule 433 under the Securities Act), any confidentially submitted registration
statement and registration statement amendments relating to the offer and sale of the Offered Securities.
(iii)
No Rights to Purchase Preferred Stock. The issuance and sale of the Units as contemplated hereby will
not cause any holder of any shares of capital stock, securities convertible into or exchangeable or exercisable for capital stock or options,
warrants or other rights to purchase capital stock or any other securities of the Company to have any right to acquire any shares of preferred
stock of the Company.
Any certificate signed
by any officer of the Company and delivered to any Underwriter or to counsel for the Underwriters in connection with the Offering,
or the purchase and sale, of the Offered Securities shall be deemed a representation and warranty by the Company to each Underwriter
as to the matters covered thereby.
The Company has a reasonable
basis for making each of the representations set forth in this Section 1. The Company acknowledges that the Underwriters and, for purposes
of the opinions to be delivered pursuant to Section 5 hereof, counsel to the Company and counsel to the Underwriters, will rely upon the
accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.
Section
2. Purchase,
Sale and Delivery of the Offered Securities.
(a)
The Firm Securities. Upon the terms herein set forth, the Company agrees to issue and sell to the several
Underwriters an aggregate of 15,000,000 Units. On the basis of the representations, warranties and agreements herein contained, and upon
the terms but subject to the conditions herein set forth, the Underwriters agree, severally and not jointly, to purchase from the Company
the respective number of Firm Securities set forth opposite their names on Schedule A. The purchase price per Unit to be paid
by the several Underwriters to the Company shall be $9.90 per share (the “Purchase Price”).
(b)
The First Closing Date. Delivery of the Firm Securities to be purchased by the Underwriters and payment
therefor shall be made at 9:00 a.m. New York City time, on [●], 2021, or such other time and date not later than 1:30 p.m.
New York City time on [●], 2021 as the Representative shall designate by notice to the Company (the time and date of such closing
are called the “First Closing Date”). The Company hereby acknowledges that circumstances under which the Representative
may provide notice to postpone the First Closing Date as originally scheduled include, but are not limited to, any determination by the
Company or the Representative to recirculate to the public copies of an amended or supplemented Prospectus or a delay as contemplated
by the provisions of Section 10. Delivery of the Firm Securities shall be made through the facilities of The Depository Trust Company
(“DTC”) unless the Representative shall otherwise instruct.
(c) The
Optional Securities; Option Closing Date. In addition, on the basis of the representations, warranties and agreements
herein contained, and upon the terms but subject to the conditions herein set forth, the Company hereby grants an option to the
several Underwriters to purchase, severally and not jointly, up to an aggregate of 2,250,000 Units from the Company at the purchase
price per Unit to be paid by the Underwriters for the Firm Securities. The option granted hereunder may be exercised at any time and
from time to time in whole or in part upon notice by the Representative to the Company, which notice may be given at any time within
45 days from the date of this Agreement. Such notice shall set forth (i) the aggregate number of Optional Securities as to
which the Underwriters are exercising the option and (ii) the time, date and place at which the Optional Securities will be
delivered (which time and date may be simultaneous with, but not earlier than, the First Closing Date; and in the event that such
time and date are simultaneous with the First Closing Date, the term “First Closing Date” shall refer to the time
and date of delivery of the Firm Securities and such Optional Securities). Any such time and date of delivery, if subsequent to the
First Closing Date, is called an “Option Closing Date,” shall be determined by the Representative and shall not
be earlier than two or later than five full business days after delivery of such notice of exercise. If any Optional Securities are
to be purchased, each Underwriter agrees, severally and not jointly, to purchase the number of Optional Securities (subject to such
adjustments to eliminate fractional shares as the Representative may determine) that bears the same proportion to the total number
of Optional Securities to be purchased as the number of Firm Securities set forth on Schedule A opposite the name of such
Underwriter bears to the total number of Firm Securities. The Representative may cancel the option at any time prior to its
expiration by giving written notice of such cancellation to the Company.
(d)
Public Offering of the Offered Securities. The Representative hereby advises the Company that the Underwriters
intend to offer for sale to the public, on the terms set forth in the Registration Statement, the Time of Sale Prospectus and the Prospectus,
their respective portions of the Offered Securities as soon after this Agreement has been executed and the Registration Statement has
been declared effective as the Representative, in its sole judgment, has determined is advisable and practicable.
(e)
Delivery and Payment for the Offered Securities. (i) In addition to the discount from the public offering
price represented by the Purchase Price set forth in the last sentence of Section 2(a) of this Agreement, the Company hereby agrees to
pay to the Underwriters a deferred discount of $0.35 per Unit (including both Firm Securities and Optional Securities) purchased hereunder
(the “Deferred Discount”). The Underwriters hereby agree that if no Business Combination is consummated within the
time period provided in the Trust Agreement and the funds held under the Trust Agreement are distributed to the holders of the Class A
Common Stock included in the Offered Securities sold pursuant to this Agreement (the “Public Stockholders”), (x) the
Underwriters will forfeit any rights or claims to the Deferred Discount and (y) the trustee under the Trust Agreement is authorized to
distribute the Deferred Discount to the Public Stockholders on a pro rata basis.
(ii)
It is understood that the Representative has been authorized, for its own account and the accounts of the several Underwriters,
to accept delivery of and receipt for, and make payment by wire transfer payable in same-day funds to an account specified by the Company
and to the Trust Account as described below in this Section of the purchase price for, the Firm Securities and any Optional Securities
the Underwriters have agreed to purchase. Evercore, individually and not as the Representative of the Underwriters, may (but shall not
be obligated to) make payment for any Offered Securities to be purchased by any Underwriter whose funds shall not have been received by
the Representative by the First Closing Date or the applicable Option Closing Date, as the case may be, for the account of such Underwriter,
but any such payment shall not relieve such Underwriter from any of its obligations under this Agreement.
(iii) Payment
for the Firm Securities shall be made as follows: The net proceeds for the Firm Securities (including the Deferred Discount) shall
be deposited in the Trust Account pursuant to the terms of the Trust Agreement along with such portion of the gross proceeds of the
Sponsor Warrants in order for the Trust Account to equal the product of the number of units sold and the public offering price per
Unit as set forth on the cover of the Prospectus upon delivery to the Representative of the Firm Securities through the facilities
of DTC or, if the Representative has otherwise instructed, upon delivery to the Representative of certificates (in form and
substance satisfactory to the Representative) representing the Firm Securities, in each case for the account of the Underwriters.
The Firm Securities shall be registered in such name or names and in such authorized denominations as the Representative may request
in writing at least two business days prior to the First Closing Date. If delivery is not made through the facilities of DTC, the
Company will permit the Representative to examine and package the Firm Securities for delivery, at least one business day prior to
the First Closing Date at a location in New York City as the Representative may designate. The Company shall not be obligated to
sell or deliver the Firm Securities except upon tender of payment by the Representative for all the Firm Securities.
(iv)
Payment for the Optional Securities shall be made as follows: $9.90 per Optional Security (including any Deferred Discount attributable
to the Optional Securities) shall be deposited in the Trust Account pursuant to the terms of the Trust Agreement upon delivery to the
Representative of the Optional Securities through the facilities of DTC or, if the Representative has otherwise instructed, upon delivery
to the Representative of certificates (in form and substance satisfactory to the Representative) representing the Optional Securities
for the account of the Underwriters. The Optional Securities shall be registered in such name or names and in such authorized denominations
as the Representative may request in writing at least two business days prior to the Option Closing Date. If delivery is not made through
the facilities of DTC, the Company will permit the Representative to examine and package the Optional Securities for delivery, at least
one business day prior to the Option Closing Date. The Company shall not be obligated to sell or deliver the Optional Securities except
upon tender of payment by the Representative for all the Optional Securities. At least one business day prior to the Optional Securities
settlement date, the Company shall deposit the proceeds from the sale of the applicable Sponsor Warrants into the Trust Account.
Section
3. Additional
Covenants of the Company.
The Company further covenants
and agrees with each Underwriter as follows:
(a)
Delivery of Registration Statement, Time of Sale Prospectus and Prospectus. The Company shall furnish
to you in New York City, without charge, prior to 10:00 a.m. New York City time on the business day next succeeding the date of this
Agreement and during the period when a prospectus relating to the Offered Securities is required by the Securities Act to be delivered
(whether physically or through compliance with Rule 172 under the Securities Act or any similar rule) in connection with sales of the
Offered Securities, as many copies of the Time of Sale Prospectus, the Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Representative’s
Review of Proposed Amendments and Supplements. During the period when a prospectus relating to the Offered Securities is
required by the Securities Act to be delivered (whether physically or through compliance with Rule 172 under the Securities Act or
any similar rule), the Company (i) will furnish to the Representative for review, a reasonable period of time prior to the proposed
time of filing of any proposed amendment or supplement to the Registration Statement, a copy of each such amendment or supplement
and (ii) will not amend or supplement the Registration Statement without the Representative’s prior written consent. Prior to
amending or supplementing any preliminary prospectus, the Time of Sale Prospectus or the Prospectus, the Company shall furnish to
the Representative for review, a reasonable amount of time prior to the time of filing or use of the proposed amendment or
supplement, a copy of each such proposed amendment or supplement. The Company shall not file or use any such proposed amendment or
supplement without the Representative’s prior written consent. The Company shall file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to such Rule.
(c)
Free Writing Prospectuses. The Company will not make any offer relating to the Units that constitutes
or would constitute a free writing prospectus or a portion thereof required to be filed by the Company with the Commission or retained
by the Company under Rule 433 of the Securities Act.
(d)
Amendments and Supplements to Time of Sale Prospectus. If the Time of Sale Prospectus is being used to
solicit offers to buy the Offered Securities at a time when the Prospectus is not yet available to prospective purchasers, and any event
shall occur or condition exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus so that the Time
of Sale Prospectus does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances when delivered to a prospective purchaser, not misleading, or if any event shall
occur or condition exist as a result of which the Time of Sale Prospectus conflicts with the information contained in the Registration
Statement, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Time of Sale Prospectus to
comply with applicable law, the Company shall (subject to Section 3(b) and Section 3(c) hereof) promptly prepare, file with the Commission
and furnish, at its own expense, to the Underwriters and to any dealer upon request, either amendments or supplements to the Time of Sale
Prospectus so that the statements in the Time of Sale Prospectus as so amended or supplemented will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
when delivered to a prospective purchaser, not misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no
longer conflict with the information contained in the Registration Statement, or so that the Time of Sale Prospectus, as amended or supplemented,
will comply with applicable law.
(e) Certain
Notifications and Required Actions. After the date of this Agreement, the Company shall promptly advise the Representative
in writing of: (i) the receipt of any comments of, or requests for additional or supplemental information from, the Commission;
(ii) the time and date of any filing of any post-effective amendment to the Registration Statement or any amendment or
supplement to any preliminary prospectus, the Time of Sale Prospectus, the Prospectus or the Exchange Act Registration Statement;
(iii) the time and date that any post-effective amendment to the Registration Statement becomes effective; and (iv) the issuance by
the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto
or any amendment or supplement to any preliminary prospectus, the Time of Sale Prospectus, the Prospectus or the Exchange Act
Registration Statement or of any order preventing or suspending the use of any preliminary prospectus, the Time of Sale Prospectus,
or the Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation the Units from any securities
exchange upon which they are listed for trading or included or designated for quotation, or of the threatening or initiation of any
proceedings for any of such purposes. If the Commission shall enter any such stop order at any time, the Company will use its best
efforts to obtain the lifting of such order at the earliest possible moment. Additionally, the Company agrees that it shall comply
in all material respects with all applicable provisions of Rule 424(b), Rule 433 and Rule 430A under the Securities Act and will use
its reasonable efforts to confirm that any filings made by the Company under Rule 424(b) or Rule 433 were received in a timely
manner by the Commission.
(f)
Amendments and Supplements to the Prospectus and Other Securities Act Matters. If any event shall occur
or condition exist as a result of which it is necessary to amend or supplement the Prospectus so that the Prospectus does not include
an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light
of the circumstances when the Prospectus is delivered (whether physically or through compliance with Rule 172 under the Securities Act
or any similar rule) to a purchaser, not misleading, or if in the opinion of the Representative or counsel for the Underwriters it is
otherwise necessary to amend or supplement the Prospectus to comply with applicable law, the Company agrees (subject to Section 3(b) and
Section 3(c)) hereof to promptly prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to any dealer
upon request, amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will
not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered (whether physically or through compliance with Rule 172 under the Securities
Act or any similar rule) to a purchaser, not misleading or so that the Prospectus, as amended or supplemented, will comply with applicable
law. Neither the Representative’s consent to, nor delivery of, any such amendment or supplement shall constitute a waiver of any
of the Company’s obligations under Section 3(b) or Section 3(c).
(g)
Blue Sky Compliance. The Company shall cooperate with the Representative and counsel for the Underwriters
to qualify or register the Offered Securities for sale under (or obtain exemptions from the application of, including the listing on a
national securities exchange such as Nasdaq) the state securities or blue sky laws or Canadian provincial securities laws of those jurisdictions
designated by the Representative, shall comply with such laws and shall continue such qualifications, registrations and exemptions in
effect so long as required for the distribution of the Offered Securities. The Company shall not be required to qualify as a foreign corporation
or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently qualified
or where it would be subject to taxation as a foreign corporation. The Company will advise the Representative promptly of the suspension
of the qualification or registration of (or any such exemption relating to) the Offered Securities for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending
such qualification, registration or exemption, the Company shall use its best efforts to obtain the withdrawal thereof at the earliest
possible moment.
(h)
Use of Proceeds. The Company shall apply the net proceeds from the sale of the Offered Securities and
the Sponsor Warrants sold by it in the manner described under the caption “Use of Proceeds” in the Registration Statement,
the Time of Sale Prospectus and the Prospectus.
(i) Transfer
and Warrant Agent. For a period commencing on the Effective Date and ending at least five years from the date of the
consummation of the Business Combination or until such earlier time at which the distributions of the Trust Account to the Public
Stockholders in connection with the redemption of shares of Class A Common Stock held by the Public Stockholders pursuant to the
terms of the Company’s amended and restated certificate of incorporation (the “Certificate of
Incorporation”), if the Company fails to consummate a Business Combination (the “Liquidation”) occurs
or the Class A Common Stock and Warrants cease to be publicly traded, the Company shall retain a transfer and warrant agent.
(j)
Earnings Statement. The Company will make generally available to its security holders and to the Representative
as soon as practicable an earnings statement (which need not be audited) covering a period of at least 12 months beginning with the first
fiscal quarter of the Company commencing after the date of this Agreement that will satisfy the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission thereunder.
(k)
Continued Compliance with Securities Laws. The Company will comply with the Securities Act and the Exchange
Act so as to permit the completion of the distribution of the Offered Securities as contemplated by this Agreement, the Registration
Statement, the Time of Sale Prospectus and the Prospectus. Without limiting the generality of the foregoing, the Company will, during
the period when a prospectus relating to the Offered Securities is required by the Securities Act to be delivered (whether physically
or through compliance with Rule 172 under the Securities Act or any similar rule), file on a timely basis with the Commission and the
Nasdaq all reports and documents required to be filed under the Exchange Act. Additionally, the Company shall report the use of proceeds
from the issuance of the Offered Securities as may be required under Rule 463 under the Securities Act.
(l)
Continued Registration of the Securities of the Company. For a period commencing on the Effective Date
and ending at least five years from the date of the consummation of the Business Combination or until such earlier time at which the Liquidation
occurs, the Company will use its best efforts to maintain the registration of the Units (until the consummation of a Business Combination),
Class A Common Stock and Warrants under the provisions of the Exchange Act, except after giving effect to a going private transaction
after the completion of a Business Combination. The Company will not deregister the Units, Class A Common Stock or Warrants under the
Exchange Act (except in connection with a going private transaction after the completion of a Business Combination) without the prior
written consent of the Representative.
(m)
Listing. The Company will use commercially reasonable efforts to effect and, for a period commencing on
the Effective Date and ending at least five years from the date of the consummation of the initial Business Combination or until such
earlier time at which the Liquidation occurs or the Class A Common Stock and Warrants cease to be publicly traded, maintain the listing
of the Units (until the consummation of a Business Combination), Class A Common Stock and Warrants on the Nasdaq.
(n)
Reservation of Unissued Securities of the Company. The Company will reserve and keep available that maximum
number of its authorized but unissued securities that are issuable upon exercise of any of the Warrants and Sponsor Warrants outstanding
from time to time and the conversation of the Founder Shares.
(o)
Agreement Not to Issue Additional Shares of Class A Common Stock or Warrants. Prior to the consummation
of a Business Combination or the Liquidation, the Company shall not issue any shares of Class A Common Stock, Warrants, Sponsor Warrants
or any options or other securities convertible into or exercisable or exchangeable for shares of Class A Common Stock, or any shares of
preferred stock, in each case, that participate in any manner in the Trust Account or that vote as a class with the Class A Common Stock
on a Business Combination.
(p)
Agreement Not to Offer or Sell Additional Securities of the Company. Beginning on the date hereof and
ending on, and including, the date that is 180 days after the date of the Prospectus (the “Lock-Up Period”), without
the prior written consent of the Representative, the Company will not (i) issue, sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase
a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act and
the rules and regulations of the Commission promulgated thereunder, with respect to, any Offered Security or any other securities of the
Company that are substantially similar to the Offered Securities, or any securities convertible into or exchangeable or exercisable for,
or any warrants or other rights to purchase, the foregoing, (ii) file or cause to become effective a registration statement under the
Securities Act relating to the offer and sale of any Offered Security or any other securities of the Company that are substantially similar
to the Offered Securities, or any securities convertible into or exchangeable or exercisable for, or any warrants or other rights to purchase,
the foregoing, (iii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of Offered Securities or any other securities of the Company that are substantially similar to the Offered Securities,
or any securities convertible into or exchangeable or exercisable for, or any warrants or other rights to purchase, the foregoing, whether
any such transaction is to be settled by delivery of Offered Securities or such other securities, in cash or otherwise, (iv) release the
Sponsor, Series 35 or any officer, director or director nominee from the lock-up contained in the Insider Letter or (v) publicly announce
an intention to effect any transaction specified in clause (i), (ii) or (iii), except, in each case, that the Company may (a) issue and
sell the Sponsor Warrants, (b) issue and sell the Optional Securities on exercise of the option to purchase additional Units as provided
in Section 2, (c) register with the Commission pursuant to the Registration Rights Agreement, in accordance with the terms of the Registration
Rights Agreement, the shares of Class A Common Stock underlying the Founder Shares, the Sponsor Warrants and warrants that may be issued
upon conversion of the working capital loans (and any shares of Class A Common Stock issued or issuable upon the exercise of any such
Sponsor Warrants or warrants issued upon conversion of the working capital loans and upon conversion of the Founder Shares), and (d) issue
securities in connection with a Business Combination.
(q)
Investment Limitation. The Company shall cause the proceeds of the Offering and the sale of the Sponsor
Warrants to be held in the Trust Account to be invested only in United States government treasury bills with a maturity of 180 days or
less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act as set forth in the Trust Agreement
and disclosed in the Preliminary Prospectus and the Prospectus; the Company will otherwise conduct its business in a manner so that it
will not become subject to the Investment Company Act; furthermore, once the Company consummates a Business Combination, it will not be
required to register as an investment company under the Investment Company Act.
(r)
No Stabilization or Manipulation; Compliance with Regulation M. The Company will not take, and will ensure
that no affiliate of the Company will take, directly or indirectly, any action designed to or that might cause or result in stabilization
or manipulation of the price of any security of the Company, whether to facilitate the sale or resale of the Offered Securities or otherwise
in violation of Regulation M, and the Company will, and shall cause each of its affiliates to, comply with all applicable provisions of
Regulation M.
(s)
Company to File a Current Report on Form 8-K. The Company shall, on the date hereof, retain its independent
registered public accounting firm to audit the balance sheet of the Company as of the First Closing Date (the “Audited Balance
Sheet”) reflecting the receipt by the Company of the proceeds of the sale of the Offered Securities as set forth in the Prospectus
on the First Closing Date. As soon as the Audited Balance Sheet becomes available, the Company shall promptly, but not later than four
business days after the First Closing Date, file a Current Report on Form 8-K with the Commission, which Report shall contain the Company’s
Audited Balance Sheet. Additionally, upon the Company’s receipt of the proceeds from the exercise of all or any portion of the option
provided for in Section 2 hereof, the Company shall promptly, but not later than four business days after the receipt of such proceeds,
file a Current Report on Form 8-K with the Commission, which report shall disclose the Company’s sale of the Optional Securities
and its receipt of the proceeds therefrom.
(t)
Company to Procure Review of Unaudited Quarterly Financial Statements. For a period commencing on the
Effective Date and ending at least five years from the date of the consummation of the Business Combination or until such earlier time
at which the Liquidation occurs or the Class A Common Stock and Warrants cease to be publicly traded, the Company, at its expense, shall
cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company’s financial statements
for each of the first three fiscal quarters of the year prior to the announcement of quarterly financial information, the filing of the
Company’s Quarterly Report on Form 10-Q and the mailing, if any, of quarterly financial information to stockholders.
(u)
Future Reports to the Representative. For a period commencing on the Effective Date and ending at least
five years from the date of the consummation of the Business Combination or until such earlier time at which the Liquidation occurs, the
Company will furnish to the Representative, c/o Evercore Group L.L.C., at 55 E. 52nd St. New York, NY 10055, Attention: Equity Capital
Markets: (i) as soon as practicable after the end of each fiscal year, copies of the Annual Report of the Company containing the balance
sheet of the Company as of the close of such fiscal year and statements of income, stockholders’ equity and cash flows for the year
then ended and the opinion thereon of the Company’s independent public or certified public accountants; (ii) as soon as practicable
after the filing thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on
Form 8-K or other report filed by the Company with the Commission or any securities exchange; (iii) as soon as available, copies of any
report or communication of the Company furnished or made available generally to holders of its capital stock and (iv) such additional
documents and information with respect to the Company and the affairs of any future subsidiaries of the Company as the Representative
may from time to time reasonably request; provided, however, that the requirements of this Section 3(u) shall be satisfied to the
extent that such reports, statement, communications, financial statements or other documents are available on EDGAR.
(v)
Amendments and Supplements to Permitted Section 5(d)Communications. If at any time following the distribution
of any Permitted Section 5(d) Communication, there occurred or occurs an event or development as a result of which such Permitted Section
5(d) Communication included or would include an untrue statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading,
the Company will promptly notify the Representative and will promptly amend or supplement, at its own expense, such Permitted Section
5(d) Communication to eliminate or correct such untrue statement or omission.
(w)
Emerging Growth Company Status. The Company will promptly notify the Representative if the Company ceases
to be an Emerging Growth Company at any time prior to the later of (i) the time when a prospectus relating to the Offered Securities is
not required by the Securities Act to be delivered (whether physically or through compliance with Rule 172 under the Securities Act or
any similar rule) and (ii) the expiration of the Lock-Up Period.
(x)
[Reserved].
(y)
No Business Combination with Affiliates. The Company will not consummate a Business Combination with any
entity that is affiliated with the Sponsor or any of the Company’s officers or directors unless it obtains an opinion from a qualified
independent accounting firm or an independent investment banking firm which is a member of FINRA that such Business Combination is fair
to the Company’s stockholders from a financial point of view; other than as set forth in this subsection, the Company shall not
pay the Sponsor or its affiliates or any of the Company’s executive officers, directors or any of their respective affiliates any
fees or compensation for services rendered to the Company prior to, or in connection with, the consummation of a Business Combination;
provided, however, that such officers, directors and affiliates (i) may receive reimbursement for out-of-pocket expenses incurred by them
related to identifying, investigating and consummating a Business Combination to the extent that such expenses do not exceed the amount
of available proceeds not deposited in the Trust Account; (ii) may be repaid for loans as described in the Registration Statement;
and (iii) may be paid $10,000 per month for office space, utilities and secretarial and administrative support pursuant to the Administrative
Support Agreement.
(z) Consummation
of the Initial Business Combination. The Company may consummate the initial Business Combination and conduct redemptions of
shares of Class A Common Stock for cash upon consummation of such Business Combination without a stockholder vote pursuant to Rule
13e-4 and Regulation 14E of the Exchange Act, including the filing of tender offer documents with the Commission. Such tender offer
documents will contain substantially the same financial and other information about the initial Business Combination and the
redemption rights as is required under the Commission’s proxy rules and will provide each stockholder of the Company with the
opportunity prior to the consummation of the initial Business Combination to redeem the shares of Class A Common Stock held by such
stockholder for an amount of cash per share equal to (A) the aggregate amount then on deposit in the Trust Account as of two
business days prior to the consummation of the initial Business Combination representing (x) the net proceeds held in the Trust
Account from the Offering and the sale of the Sponsor Warrants and (y) any interest income earned on the funds held in the Trust
Account (which interest shall be net of taxes payable), divided by (B) the total number of shares of Class A Common Stock sold as
part of the Units in the Offering (the “Public Shares”) then outstanding. If, however, the Company elects not to
file such tender offer documents, a stockholder vote is required by law in connection with the initial Business Combination, or the
Company decides to hold a stockholder vote for business or other legal reasons, the Company will submit such Business Combination to
the Company’s stockholders for their approval (“Business Combination Vote”). With respect to the initial
Business Combination Vote, if any, the Sponsor, Series 35 and each of the Company’s directors and officers party to an Insider
Letter has agreed to vote all of their respective Founder Shares and any other shares of Class A Common Stock purchased during or
after the Offering in favor of the Company’s initial Business Combination. If the Company seeks stockholder approval of the
initial Business Combination, the Company will offer to each Public Stockholder holding shares of Class A Common Stock the right to
have its shares of Class A Common Stock redeemed in conjunction with a proxy solicitation pursuant to the proxy rules of the
Commission at a per share redemption price (the “Redemption Price”) equal to (I) the aggregate amount then on
deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination representing
(1) the net proceeds held in the Trust Account from the Offering and the sale of the Sponsor Warrants and (2) any interest
income earned on the funds held in the Trust Account (which interest shall be net of any taxes payable), divided by (II) the total
number of Public Shares then outstanding. If the Company seeks stockholder approval of the initial Business Combination, the Company
may proceed with such Business Combination only if a majority of the outstanding shares voted by the stockholders at a duly held
stockholders meeting are voted to approve such Business Combination. If, after seeking and receiving such stockholder approval, the
Company elects to so proceed, it will redeem shares of Class A Common Stock, at the Redemption Price, from those Public Stockholders
who affirmatively requested such redemption. Only Public Stockholders holding shares of Class A Common Stock who properly exercise
their redemption rights, in accordance with the applicable tender offer or proxy materials related to such Business Combination,
shall be entitled to receive distributions from the Trust Account in connection with an initial Business Combination, and the
Company shall pay no distributions with respect to any other holders or shares of capital stock of the Company in connection
therewith. In the event that the Company does not effect a Business Combination within the time period set forth in the
Company’s charter, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as
reasonably possible but not more than 10 business days thereafter, redeem 100% of the Public Shares, at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of
taxes payable and less up to $100,000 of such net interest to pay dissolution expenses), divided by the number of then outstanding
Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to
receive further liquidation distributions, if any), subject to applicable law, and subject to the requirement that any refund of
income taxes that were paid from the Trust Account that is received after the redemption shall be distributed to the former Public
Stockholders, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s
remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the
Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Only
Public Stockholders holding shares of Class A Common Stock included in the Offered Securities shall be entitled to receive such
redemption amounts and the Company shall pay no such redemption amounts or any distributions in liquidation with respect to any
other shares of capital stock of the Company. The Company will not propose any amendment to its Certificate of Incorporation that
would affect the substance or timing of the Company’s obligation to redeem 100% of the outstanding Public Shares if the
Company has not consummated a Business Combination within 24 months from the closing of the Offering, as described in Section [9.7]
of the Company’s Certificate of Incorporation, unless the Company offers the right to redeem the Public Shares in connection
with such amendment.
(aa)
Announcement of the Consummation of the Initial Business Combination. In the event that the Company desires
or is required by an applicable law or regulation to cause an announcement (“Business Combination Announcement”) to
be placed in The Wall Street Journal, The New York Times or any other news or media publication or outlet or to be made via a public filing
with the Commission announcing the consummation of the Business Combination that indicates that the Underwriters were the underwriters
in the Offering, the Company shall supply the Representative with a draft of the Business Combination Announcement and provide the Representative
with a reasonable advance opportunity to comment thereon, subject to the agreement of the Underwriters to keep confidential such draft
announcement in accordance with the Representative’s standard policies regarding confidential information.
(bb)
Payment of Deferred Discount. Upon the consummation of the initial Business Combination, the Company will
pay to the Representative, on behalf of the Underwriters, the Deferred Discount. Payment of the Deferred Discount will be made out of
the proceeds of the Offering held in the Trust Account, and the Company will instruct CST to transfer the Deferred Discount to the Representative
concurrent with any transfer of the funds held in the Trust Account to the Company or any other person. The Underwriters shall have no
claim to payment of any interest earned on the portion of the proceeds held in the Trust Account representing the Deferred Discount. If
the Company fails to consummate its initial Business Combination within 24 months from the closing of the Offering, the Deferred Discount
will not be paid to the Representative and will, instead, be included in the Liquidation distribution of the proceeds held in the Trust
Account made to the Public Stockholders. In connection with any such Liquidation, the Underwriters forfeit any rights or claims to the
Deferred Discount.
(cc)
Transfer Agent and Registrar. For so long as the Company is subject to the reporting requirements of Section
13(g) or 15(d) of the Exchange Act, the Company will maintain a transfer agent and, if necessary under the jurisdiction of incorporation
of the Company, a registrar for the Class A Common Stock.
(dd)
Payment Pursuant to the Administrative Support Agreement. In no event will the amounts payable by the
Company for office space, utilities and secretarial and administrative support exceed $10,000 per month in the aggregate until the earlier
of the date of the consummation of the Business Combination or the Liquidation.
(ee)
Review of All Payments to the Sponsor. The Company’s audit committee will review on a quarterly
basis all payments made to the Sponsor, to the Company’s officers or directors, or to the Company’s or any of such other persons’
respective affiliates.
(ff) Compliance
with the “Penny Stock” Laws. The Company agrees that it will use commercially reasonable efforts to prevent the
Company from becoming subject to Rule 419 under the Securities Act prior to the consummation of any Business Combination, including,
but not limited to, using its best efforts to prevent any of the Company’s outstanding securities from being deemed to be a
“penny stock” as defined in Rule 3a-51-1 under the Exchange Act during such period.
(gg)
Maintenance of Disclosure Controls, Procedures and Internal Accounting Controls. To the extent required
by Rule 13a-15(e) under the Exchange Act, the Company will maintain “disclosure controls and procedures” (as defined under
Rule 13a-15(e) under the Exchange Act) and a system of internal accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management’s general or specific authorization, (ii) transactions are recorded as necessary
in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets, (iii) access
to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(hh)
Compliance with the Sarbanes-Oxley Act. As soon as legally required to do so, the Company and its directors
and officers, in their capacities as such, shall take all actions necessary to comply with any provision of the Sarbanes-Oxley Act, including
Section 402 related to loans and Sections 302 and 906 related to certifications, and to comply with the Nasdaq Marketplace Rules.
(ii)
Compliance with the Organizational Documents. The Company shall not take any action or omit to take any
action that would cause the Company to be in breach or violation of its Certificate of Incorporation or its bylaws (the “Bylaws”),
as amended.
(jj)
Waiver of Interests to the Funds. The Company will seek to have all vendors, service providers (other
than the Company’s independent registered public accounting firm), prospective target businesses, lenders or other entities with
which it does business enter into agreements waiving any right, title, interest or claim of any kind in or to any monies held in the Trust
Account for the benefit of the Public Stockholders.
(kk)
Maintenance of Funds in the Trust Account. During the period prior to the Company’s initial Business
Combination or Liquidation, the Company may instruct the trustee under the Trust Agreement to release from the Trust Account, solely from
interest income earned on the funds held in the Trust Account, the amounts necessary to pay taxes. Otherwise, all funds held in the Trust
Account (including any interest income earned on the amounts held in the Trust Account (which interest shall be net of taxes payable))
will remain in the Trust Account until the earlier of the consummation of the Company’s initial Business Combination or the Liquidation;
provided, however, that in the event of the Liquidation, up to $100,000 of interest income may be released to the Company if the proceeds
of the Offering held outside of the Trust Account are not sufficient to cover the costs and expenses associated with implementing the
Company’s plan of dissolution.
(ll) Notification
and Disclosure of Arrangements Relating to a Business Combination. For a period of 90 days following the Effective Date, in
the event any person or entity (regardless of any FINRA affiliation or association) is engaged to assist the Company in its search
for a merger candidate or to provide any other merger and acquisition services, or has provided or will provide any investment
banking, financial, advisory and/or consulting services to the Company, the Company agrees that it shall promptly provide to FINRA
(via a FINRA submission), the Representative and its counsel a notification prior to entering into the agreement or transaction
relating to a potential Business Combination: (i) the identity of the person or entity providing any such services; (ii) complete
details of all such services and copies of all agreements governing such services prior to entering into the agreement or
transaction; and (iii) justification as to why the value received by any person or entity for such services is not underwriting
compensation for the Offering. The Company also agrees that proper disclosure of such arrangement or potential arrangement will be
made in the tender offer materials or proxy statement, as applicable, which the Company may file in connection with the Business
Combination for purposes of offering redemption of shares held by its stockholders or for soliciting stockholder approval, as
applicable.
(mm)
FINRA Conflict of Interest. The Company shall advise FINRA, the Representative and its counsel if it is
aware that any 5% or greater stockholder of the Company becomes an affiliate or associated person of a member of FINRA participating in
the distribution of the Offered Securities.
The Representative, on behalf
of the several Underwriters, may, in its sole discretion, waive in writing the performance by the Company of any one or more of the foregoing
covenants or extend the time for their performance.
Section
4. Payment
of Expenses. The Company agrees to pay all costs, fees and expenses incurred in connection with the performance of its
obligations hereunder and in connection with the transactions contemplated hereby, including without limitation (i) all expenses
incident to the issuance and delivery of the Offered Securities (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Offered Securities, (iii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Offered Securities to the Underwriters, (iv) all fees and expenses of the
Company’s counsel, independent public or certified public accountants and other advisors, (v) all costs and expenses incurred
in connection with the preparation, printing, filing, shipping and distribution of the Exchange Act Registration Statement and the
Registration Statement (including financial statements, exhibits, schedules, consents and certificates of experts), the Time of Sale
Prospectus, the Prospectus and each preliminary prospectus, each Permitted Section 5(d) Communication, and all amendments and
supplements thereto, and this Agreement, (vi) all filing fees, attorneys’ fees and expenses incurred by the Company or
the Underwriters in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Offered Securities for offer and sale under the state securities or blue sky laws or the provincial
securities laws of Canada, and, if requested by the Representative, preparing and printing a “Blue Sky Survey” or
memorandum and a “Canadian wrapper”, and any supplements thereto, advising the Underwriters of such qualifications,
registrations and exemptions, (vii) the filing fees incident to, and the fees and disbursements of counsel for the Underwriters in
an amount not to exceed $25,000 in connection with, the required review by FINRA (viii) the costs and expenses of the Company (and
not the Representative) relating to investor presentations on any Road Show, any Permitted Section 5(d) Communication or any Section
5(d) Oral Communication undertaken in connection with the Offering, including, without limitation, expenses associated with the
preparation or dissemination of any electronic Road Show, expenses associated with the production of Road Show slides and graphics,
fees and expenses of any consultants engaged in connection with the Road Show presentations with the prior approval of the Company,
travel and lodging expenses of the representatives, employees and officers of the Company (and not the Representative) and any such
consultants, (ix) the fees and expenses associated with listing the Offered Securities on the Nasdaq and (x) all other fees, costs
and expenses of the nature referred to in Item 13 of Part II of the Registration Statement. Except as provided in this Section 4 or
in Section 6, Section 8 or Section 9 hereof, the Underwriters shall pay their own expenses, including the fees and disbursements of
their counsel.
Section
5. Conditions
of the Obligations of the Underwriters. The respective obligations of the several Underwriters hereunder to purchase and pay for the
Offered Securities as provided herein on the First Closing Date and, with respect to the Optional Securities, each Option Closing Date,
shall be subject to the accuracy of the representations and warranties on the part of the Company set forth in Section 1 hereof as of
the date hereof and as of the First Closing Date as though then made and, with respect to the Optional Securities, as of each Option Closing
Date as though then made, to the timely performance by the Company of its covenants and other obligations hereunder, and to each of the
following additional conditions:
(a)
Comfort Letter. On the date hereof, the Representative shall have received from Marcum, independent registered
public accountants for the Company, a letter dated the date hereof addressed to the Underwriters, in form and substance satisfactory to
the Representative, containing statements and information of the type ordinarily included in accountant’s “comfort letters”
to underwriters, delivered according to Statement of Auditing Standards No. 72 (or any successor bulletin), with respect to the audited
and unaudited financial statements and certain financial information contained in the Registration Statement, the Time of Sale Prospectus
and the Prospectus.
(b)
Compliance with Registration Requirements; No Stop Order; No Objection from FINRA.
(i)
The Company shall have filed the Prospectus with the Commission (including the information required by Rule 430A under the Securities
Act) in the manner and within the time period required by Rule 424(b) under the Securities Act.
(ii)
No stop order suspending the effectiveness of the Registration Statement or any post-effective amendment to the Registration Statement
shall be in effect, and no proceedings for such purpose shall have been instituted or threatened by the Commission.
(iii)
FINRA shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements.
(iv)
The Exchange Act Registration Statement shall have been filed and shall have become effective under the Exchange Act.
(c)
No Prevention or Suspension. No order preventing or suspending the sale of the Units in any jurisdiction
designated by the Representative pursuant to Section 3(g) hereof shall have been issued as of the First Closing Date and each Option Closing
Date, and no proceedings for that purpose shall have been instituted or shall have been threatened.
(d)
No Material Adverse Change or Ratings Agency Change. For the period from and after the date of this Agreement
and through and including the First Closing Date and, with respect to any Optional Securities purchased after the First Closing Date,
each Option Closing Date, in the judgment of the Representative there shall not have occurred any Material Adverse Change.
(e)
Opinion of Counsel for the Company. On each of the First Closing Date and each Option Closing Date the
Representative shall have received the opinion of White & Case LLP, counsel for the Company, dated as of such date, in form and substance
satisfactory to the Representative.
(f)
Opinion of Counsel for the Underwriters. On each of the First Closing Date and each Option Closing Date
the Representative shall have received the opinion of Cravath, Swaine & Moore LLP, counsel for the Underwriters in connection with
the offer and sale of the Offered Securities, in form and substance satisfactory to the Representative, dated as of such date, with executed
copies for each of the other Underwriters named on the Prospectus cover page.
(g)
Officers’ Certificate. On each of the First Closing Date and each Option Closing Date, the Representative
shall have received a certificate executed by the Chief Executive Officer or President of the Company and the Chief Financial Officer
of the Company, dated as of such date, to the effect set forth in Section 5(b)(ii) and further to the effect that:
(i)
for the period from and including the date of this Agreement through and including such date, there has not occurred any Material
Adverse Change;
(ii)
the representations, warranties, and covenants of the Company set forth in Section 1 of this Agreement are true and correct with
the same force and effect as though expressly made on and as of such date; and (iii) the Company has complied with all the agreements
hereunder and satisfied all the conditions on its part to be performed or satisfied hereunder at or prior to such date.
(h)
Secretary’s Certificate. The Company shall have furnished to the Representative a certificate signed
by the Chief Executive Officer, Secretary or Assistant Secretary of the Company, dated the First Closing Date and each Option Closing
Date, certifying (i) that the Certificate of Incorporation and the Bylaws are true and complete, have not been modified and are in full
force and effect, (ii) that the resolutions relating to the Offering contemplated by this Agreement are in full force and effect
and have not been modified, (iii) copies of all correspondence between the Company or its counsel and the Commission, and (iv) as to the
incumbency of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate.
(i) Bring-down
Comfort Letter. On each of the First Closing Date and each Option Closing Date the Representative shall have received from
Marcum, independent registered public accountants for the Company, a letter dated such date, in form and substance satisfactory to
the Representative, which letter shall: (i) reaffirm the statements made in the letter furnished by them pursuant to Section 5(a),
except that the specified date referred to therein for the carrying out of procedures shall be no more than three business days
prior to the First Closing Date or the applicable Option Closing Date, as the case may be; and (ii) cover certain financial
information contained in the Prospectus.
(j)
Transactional Documents. On or prior to the date hereof, the Company shall have delivered to the Representative
executed copies of the Trust Agreement, the Warrant Agreement, the Subscription Agreement, the Warrant Subscription Agreement, the Insider
Letter from each of the Sponsor, Series 35, directors and executive officers of the Company, the Registration Rights Agreement, and the
Administrative Support Agreement and each such agreement shall be in full force and effect on each of the First Closing Date and each
Option Closing Date. With regard to the Insider Letter, if any additional persons shall become executive officers, directors or director
nominees of the Company prior to the end of the Lock-up Period, the Company shall cause each such person, prior to or contemporaneously
with their appointment or election as an executive officer, director and director nominee to execute and deliver to the Representative
an Insider Letter.
(k)
Deposit to the Trust Account. At least one business day prior to the time of purchase, if the Sponsor
shall have caused the purchase price for the Sponsor Warrants to be wired to the Company, the Company shall direct the trustee under the
Trust Agreement to deposit such funds into the Trust Account and to hold such funds in escrow therein.
(l)
Rule 462(b) Registration Statement. In the event that a Rule 462(b) Registration Statement is filed in
connection with the Offering contemplated by this Agreement, such Rule 462(b) Registration Statement shall have been filed with the
Commission on the date of this Agreement and shall have become effective automatically upon such filing.
(m)
Approval of Listing. At the First Closing Date, the Offered Securities shall have been approved for listing
on the Nasdaq, subject only to official notice of issuance.
(n)
Financial Advisory Engagement. On or prior to the date hereof, each of the Company and the Representative
shall execute and deliver an engagement letter pursuant to which the Company has engaged the Representative as financial advisor in connection
with the initial Business Combination.
(o)
Additional Documents. On or before each of the First Closing Date and each Option Closing Date, the Representative
and counsel for the Underwriters shall have received such information, documents and opinions as they may reasonably request for the purposes
of enabling them to pass upon the issuance and sale of the Offered Securities as contemplated herein, or in order to evidence the accuracy
of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Offered Securities as contemplated herein and in connection with
the other transactions contemplated by this Agreement shall be satisfactory in form and substance to the Representative and counsel for
the Underwriters.
If any condition
specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the
Representative by notice from the Representative to the Company at any time on or prior to the First Closing Date and, with respect
to the Optional Securities, at any time on or prior to the applicable Option Closing Date, which termination shall be without
liability on the part of any party to any other party, except that Section 4, Section 6, Section 8 and Section 9 shall at all times
be effective and shall survive such termination.
Section
6. Reimbursement
of Underwriters’ Expenses. If this Agreement is terminated by the Representative pursuant to Section 5, Section 10 or Section
11, or if the sale to the Underwriters of the Offered Securities on the First Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company to perform any agreement herein or to comply with any provision hereof, the Company agrees
to reimburse the Representative and the other Underwriters (or such Underwriters as have terminated this Agreement with respect to themselves),
severally, upon demand for all out-of-pocket expenses that shall have been reasonably incurred by the Representative and the Underwriters
in connection with the proposed purchase and the Offering and sale of the Offered Securities, including, but not limited to, fees and
disbursements of counsel, printing expenses, travel expenses, postage, facsimile and telephone charges.
Section
7. Effectiveness
of this Agreement. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.
Section
8. Indemnification.
(a) Indemnification
of the Underwriters. The Company agrees to indemnify and hold harmless each Underwriter, its affiliates, directors,
officers, employees and agents, and each person, if any, who controls any Underwriter within the meaning of the Securities Act or
the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Underwriter or such affiliate,
director, officer, employee, agent or controlling person may become subject, under the Securities Act, the Exchange Act, other
federal or state statutory law or regulation, or the laws or regulations of foreign jurisdictions where Offered Securities have been
offered or sold or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the
written consent of the Company), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement, or any amendment thereto, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading; or (ii) any untrue statement or alleged
untrue statement of a material fact included in any preliminary prospectus, the Time of Sale Prospectus, any Marketing Material, any
Section 5(d) Written Communication or the Prospectus (or any amendment or supplement to the foregoing), or the omission or alleged
omission to state therein a material fact necessary in order to make the statements, in the light of the circumstances under which
they were made, not misleading; or (iii) any act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the securities of the Company or the Offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or action arising out of or based upon any matter covered
by clause (i) or (ii) above and to reimburse each Underwriter and each such affiliate, director, officer, employee, agent and
controlling person for any and all expenses (including the fees and disbursements of counsel) as such expenses are incurred by such
Underwriter or such affiliate, director, officer, employee, agent or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only to the extent, arising
out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Company by the Representative in writing expressly for use
in the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, any Marketing Material, any Section 5(d)
Written Communication or the Prospectus (or any amendment or supplement thereto), it being understood and agreed that the only such
information consists of the information described in Section 8(b) below. The indemnity agreement set forth in this Section 8(a)
shall be in addition to any liabilities that the Company may otherwise have.
(b)
Indemnification of the Company, its Directors and Officers. Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such director, officer or controlling person may become subject,
under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the written consent of such Underwriter), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or
(ii) any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus, the Time of Sale Prospectus,
any Section 5(d) Written Communication or the Prospectus (or any such amendment or supplement) or the omission or alleged omission to
state therein a material fact necessary in order to make the statements, in the light of the circumstances under which they were made,
not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, such preliminary prospectus, the Time of Sale Prospectus, such Section 5(d)
Written Communication or the Prospectus (or any such amendment or supplement), in reliance upon and in conformity with information relating
to such Underwriter furnished to the Company by the Representative in writing expressly for use therein; and to reimburse the Company,
or any such director, officer or controlling person for any and all expenses (including the fees and disbursements of counsel) as such
expenses are incurred by the Company, or any such director, officer or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability, expense or action. The Company hereby acknowledges that the
only information that the Representative has furnished to the Company expressly for use in the Registration Statement, any preliminary
prospectus, the Time of Sale Prospectus, any Section 5(d) Written Communication or the Prospectus (or any amendment or supplement to the
foregoing) are the following statements set forth under the caption “Underwriting”: [(x) the list of Underwriters and their
respective roles and participation in the sale of the Offered Securities, (y) the sentences related to concessions and reallowances and
the Underwriter’s intention not to make sales to discretionary accounts and (z) the paragraphs related to stabilization, syndicate
covering transactions and penalty bids, in the Preliminary Prospectus and the Prospectus]. The indemnity agreement set forth in this Section
8(b) shall be in addition to any liabilities that each Underwriter may otherwise have.
(c)
Notifications and Other Indemnification Procedures. Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the omission to
so notify the indemnifying party will not relieve the indemnifying party from any liability which it may have to any indemnified party
to the extent the indemnifying party is not materially prejudiced as a proximate result of such failure and shall not in any event relieve
the indemnifying party from any liability that it may have otherwise than on account of this indemnity agreement. In case any such action
is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably
concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense
of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional
to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume
such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt
of notice from the indemnifying party to such indemnified party of such indemnifying party’s election so to assume the defense of
such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under
this Section 8 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof
unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the fees and expenses of more than one separate counsel (together
with local counsel), representing the indemnified parties who are parties to such action), which counsel (together with any local counsel)
for the indemnified parties shall be selected by the Representative (in the case of counsel for the indemnified parties referred to in
Section 8(a) above) or by the Company (in the case of counsel for the indemnified parties referred to in Section 8(b) above) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party has authorized in writing the employment of counsel for
the indemnified party at the expense of the indemnifying party, in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party and shall be paid as they are incurred.
(d) Settlements.
The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by Section 8(c) hereof, the indemnifying party shall be
liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending
or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was
or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or
proceeding and does not include an admission of fault or culpability or a failure to act by or on behalf of such indemnified
party.
Section
9. Contribution.
If the indemnification provided for in Section 8 is for any reason held to be unavailable to or otherwise insufficient to hold harmless
an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party
shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages,
liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Underwriters, on the other hand, from the Offering pursuant to this Agreement or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other
hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters,
on the other hand, in connection with the Offering pursuant to this Agreement shall be deemed to be in the same respective proportions
as the total proceeds from the Offering pursuant to this Agreement (before deducting expenses) received by the Company, and the total
underwriting discounts and commissions received by the Underwriters, in each case as set forth on the front cover page of the Prospectus,
bear to the aggregate initial public offering price of the Offered Securities as set forth on such cover. The relative fault of the Company,
on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue
or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied
by the Company, on the one hand, or the Underwriters, on the other hand, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable
by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 8(c), any legal or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in Section 8(c) with respect to notice of commencement of any
action shall apply if a claim for contribution is to be made under this Section 9; provided, however, that no additional notice shall
be required with respect to any action for which notice has been given under Section 8(c) for purposes of indemnification.
The Company and the
Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions
of this Section 9, no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions received
by such Underwriter in connection with the Offered Securities underwritten by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section 9 are
several, and not joint, in proportion to their respective underwriting commitments as set forth opposite their respective names on Schedule
A. For purposes of this Section 9, each affiliate, director, officer, employee and agent of an Underwriter and each person, if any,
who controls an Underwriter within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as
such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution
as the Company.
Section
10. Default of One or More
of the Several Underwriters. If, on the First Closing Date or any Option Closing Date any one or more of the several Underwriters
shall fail or refuse to purchase Offered Securities that it or they have agreed to purchase hereunder on such date, and the aggregate
number of Offered Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase does not exceed
10% of the aggregate number of the Offered Securities to be purchased on such date, the Representative may make arrangements satisfactory
to the Company for the purchase of such Offered Securities by other persons, including any of the Underwriters, but if no such arrangements
are made by such date, the other Underwriters shall be obligated, severally and not jointly, in the proportions that the number of Firm
Securities set forth opposite their respective names on Schedule A bears to the aggregate number of Firm Securities set forth opposite
the names of all such non-defaulting Underwriters, or in such other proportions as may be specified by the Representative with the consent
of the non-defaulting Underwriters, to purchase the Offered Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date. If, on the First Closing Date or any Option Closing Date any one or more of the Underwriters shall
fail or refuse to purchase Offered Securities and the aggregate number of Offered Securities with respect to which such default occurs
exceeds 10% of the aggregate number of Offered Securities to be purchased on such date, and arrangements satisfactory to the Representative
and the Company for the purchase of such Offered Securities are not made within 48 hours after such default, this Agreement shall terminate
without liability of any party to any other party except that the provisions of Section 4, Section 6, Section 8 and Section 9 shall at
all times be effective and shall survive such termination. In any such case either the Representative or the Company shall have the right
to postpone the First Closing Date or the applicable Option Closing Date, as the case may be, but in no event for longer than seven days
in order that the required changes, if any, to the Registration Statement and the Prospectus or any other documents or arrangements may
be effected.
As used in this
Agreement, the term “Underwriter” shall be deemed to include any person substituted for a defaulting Underwriter
under this Section 10. Any action taken under this Section 10 shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
Section
11. Termination of this
Agreement. Prior to the purchase of the Firm Securities by the Underwriters on the First Closing Date, this Agreement may be
terminated by the Representative by notice given to the Company if at any time: (i) trading or quotation in any of the Company’s
securities shall have been suspended or limited by the Commission or by the Nasdaq, or trading in securities generally on either the Nasdaq
or the NYSE shall have been suspended or limited, or minimum or maximum prices shall have been generally established on any of such stock
exchanges; (ii) a general banking moratorium shall have been declared by either U.S. federal or New York state authorities; (iii) there
shall have occurred any outbreak or escalation of national or international hostilities or any crisis or calamity, or any change in the
United States or international financial markets, or any substantial change or development involving a prospective substantial change
in United States’ or international political, financial or economic conditions, as in the judgment of the Representative is material
and adverse and makes it impracticable to market the Offered Securities in the manner and on the terms described in the Time of Sale Prospectus
or the Prospectus or to enforce contracts for the sale of securities; (iv) in the judgment of the Representative there shall have occurred
any Material Adverse Change; or (v) the Company shall have sustained a loss by strike, fire, flood, earthquake, accident or other
calamity of such character as in the judgment of the Representative may interfere materially with the conduct of the business and operations
of the Company regardless of whether or not such loss shall have been insured. Any termination pursuant to this Section 11 shall be without
liability on the part of (a) the Company to any Underwriter, except that the Company shall be obligated to reimburse the expenses of the
Representative and the Underwriters pursuant to Section 4 or Section 6 hereof or (b) any Underwriter to the Company; provided, however,
that the provisions of Section 8 and Section 9 shall at all times be effective and shall survive such termination.
Section
12. No Advisory or Fiduciary
Relationship. The Company acknowledges and agrees that (a) the purchase and sale of the Offered Securities pursuant to this Agreement,
including the determination of the public offering price of the Offered Securities and any related discounts and commissions, is an arm’s-length
commercial transaction between the Company, on the one hand, and the several Underwriters, on the other hand, (b) in connection with the
Offering contemplated hereby and the process leading to such transaction, each Underwriter is and has been acting solely as a principal
and is not the agent or fiduciary of the Company, or its stockholders, its creditors, employees or any other party, (c) no Underwriter
has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to the Offering contemplated hereby
or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters)
and no Underwriter has any obligation to the Company with respect to the Offering contemplated hereby except the obligations expressly
set forth in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Company, and (e) the Underwriters have not provided any legal, accounting, regulatory
or tax advice with respect to the Offering contemplated hereby and the Company has consulted its own legal, accounting, regulatory and
tax advisors to the extent it deemed appropriate.
Section
13. Representations
and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or any of
its or their partners, officers, directors, employees, agents or any controlling person, as the case may be, and, anything herein to
the contrary notwithstanding, will survive delivery of and payment for the Offered Securities sold hereunder and any termination of
this Agreement.
Section
14. Notices. All communications
hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed to the parties hereto as follows:
| If to the Representative: |
Evercore Group L.L.C.
55 E. 52nd St.
New York, NY 10055
Attention: Neil Shah, Senior Managing Director |
| with a copy to: |
Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, NY 10019
Facsimile: (212) 474-3700
Attention: Andrew J. Pitts and Nicholas A. Dorsey |
| If to the Company: |
AMCI Acquisition Corp. II
600 Steamboat Road South
Greenwich, CT 06830
Facsimile: [●]
Attention: [●]
|
| with a copy to: |
White & Case LLP
1221 Avenue of the Americas
New York, NY 10020
Facsimile: (212) 354-8113
Attention: Elliott M. Smith |
Any party hereto may change the address for receipt of communications
by giving written notice to the others.
Section
15. Successors. This
Agreement will inure to the benefit of and be binding upon the parties hereto, including any substitute Underwriters pursuant to Section
10 hereof, and to the benefit of the affiliates, directors, officers, employees, agents and controlling persons referred to in Section
8 and Section 9, and in each case their respective successors, and personal representatives, and no other person will have any right or
obligation hereunder. The term “successors” shall not include any purchaser of the Offered Securities as such from
any of the Underwriters merely by reason of such purchase.
Section
16. Partial
Unenforceability. The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect
the validity or enforceability of any other section, paragraph or provision hereof. If any section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
Section
17. Governing Law Provisions.
This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements
made and to be performed in such state. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United States of America
located in the Borough of Manhattan in the City of New York or the courts of the State of New York in each case located in the Borough
of Manhattan in the City of New York (collectively, the “Specified Courts”), and each party irrevocably submits to
the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court (a “Related
Judgment”), as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of
any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for
any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient
forum.
Section
18. General Provisions.
This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may be executed in two or more
counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express
or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. The section headings herein are
for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.
Each of the parties hereto
acknowledges that it is a sophisticated business person who was adequately represented by counsel during negotiations regarding the provisions
hereof, including, without limitation, the indemnification provisions of Section 8 and the contribution provisions of Section 9, and is
fully informed regarding said provisions. Each of the parties hereto further acknowledges that the provisions of Section 8 and Section
9 hereof fairly allocate the risks in light of the ability of the parties to investigate the Company, its affairs and its business in
order to assure that adequate disclosure has been made in the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus
and the Prospectus (and any amendments and supplements to the foregoing), as contemplated by the Securities Act and the Exchange Act.
If the foregoing is in accordance
with your understanding of our agreement, kindly sign and return to the Company the enclosed copies hereof, whereupon this instrument,
along with all counterparts hereof, shall become a binding agreement in accordance with its terms.
| |
Very truly yours, |
| |
|
| |
AMCI ACQUISITION CORP. II |
| |
|
| |
By: |
|
| |
|
Name:
Title: |
The foregoing Underwriting
Agreement is hereby confirmed and accepted by the Representative in New York, New York as of the date first above written.
EVERCORE GROUP L.L.C.
Acting individually and as Representative
of the several Underwriters named in the attached Schedule A.
| EVERCORE GROUP L.L.C. |
|
| By: |
|
|
| |
Name: |
|
| |
Title: |
|
Schedule A
| Underwriters | |
Number of
Firm Securities
to be Purchased | |
| Evercore Group L.L.C. | |
| 15,000,000 | |
| Total | |
| 15,000,000 | |
Schedule B
Time of Delivery Information
1. Public offering price per unit: $10.00
2. Number of units offered: 15,000,000
3. [Number of units available to cover over-allotments, if any: up
to [●]]
Schedule C
Permitted Section 5(d) Communications
Investor Presentation dated Q1, 2021
Exhibit 4.4
WARRANT AGREEMENT
AMCI ACQUISITION CORP. II
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
Dated [•], 2021
THIS WARRANT AGREEMENT (this
“Agreement”), dated [•], 2021, is by and between AMCI Acquisition Corp. II, a Delaware corporation
(the “Company”), and Continental Stock Transfer & Trust Company, a New York limited purpose trust company,
as warrant agent (in such capacity, the “Warrant Agent”).
WHEREAS, it is proposed that
the Company enter into that certain Private Placement Warrants Purchase Agreement, with AMCI Sponsor II LLC, a Delaware limited liability
company (the “Sponsor”), pursuant to which the Sponsor will purchase an aggregate of 3,500,000 warrants (or
up to 3,725,000 warrants if the underwriters in the Public Offering (defined below) exercise their Over-allotment Option (as defined below)
in full) simultaneously with the closing of the Offering (and the closing of the Over-allotment Option, if applicable), bearing the legend
set forth in Exhibit B hereto (the “Private Placement Warrants”) at a purchase price of $1.00 per
Private Placement Warrant. Each Private Placement Warrant entitles the holder thereof to purchase one share of Class A Common Stock
(as defined below) at a price of $11.50 per share, subject to adjustment as described herein;
WHEREAS, in order to finance
the Company’s transaction costs in connection with an intended initial merger, share exchange, asset acquisition, share purchase,
reorganization or similar business combination, involving the Company and one or more businesses (a “Business Combination”),
any one or more of the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not
obligated to, lend to the Company funds as the Company may require, of which up to $1,500,000 of such loans may be convertible into up
to an additional 1,500,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant (the “Working Capital
Warrants”);
WHEREAS, the Company is
engaged in an initial public offering (the “Offering”) of units of the Company’s equity securities,
each such unit comprised of one share of Class A common stock of the Company, par value $0.0001 per share (“Common
Stock”), and one-half of one Public Warrant (as defined below) (the “Units”) and, in
connection therewith, has determined to issue and deliver up to 8,625,000 redeemable warrants (including up to 1,125,000 redeemable
warrants subject to the Over-allotment Option) to public investors in the Offering (the “Public
Warrants”). Each whole Warrant entitles the holder thereof to purchase one share of Common Stock for $11.50 per share,
subject to adjustment as described herein. Only whole Warrants are exercisable. A holder of the Public Warrants will not be able to
exercise any fraction of a Warrant;
WHEREAS, following the consummation
of the Offering, the Company may issue additional warrants (the “Post-IPO Warrants” and, together with the Public
Warrants, the Private Placement Warrants and the Working Capital Warrants, the “Warrants”) in connection with,
or following the consummation by the Company of, a Business Combination;
WHEREAS, the Company has filed
with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1, File
No. 333-253107 and prospectus (the “Prospectus”), for the registration, under the Securities Act of 1933,
as amended (the “Securities Act”), of the Units, the Public Warrants and the Common Stock included in the Units;
WHEREAS, the Company desires
the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration,
transfer, exchange, redemption and exercise of the Warrants;
WHEREAS, the Company desires
to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent and the holders of the Warrants; and
WHEREAS, all acts and things
have been done and performed that are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on
behalf of the Warrant Agent (if a physical certificate is issued), as provided herein, the valid, binding and legal obligations of the
Company, and to authorize the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration
of the mutual agreements herein contained, the parties hereto agree as follows:
1. Appointment
of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant
Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.
2. Warrants.
2.1. Form of
Warrant. Each Warrant shall initially be issued in registered form only.
2.2. Effect
of Countersignature. If a physical certificate is issued, unless and until countersigned by the Warrant Agent pursuant to this Agreement,
a certificated Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.
2.3. Registration.
2.3.1. Warrant
Register. The Warrant Agent shall maintain books (the “Warrant Register”), for the registration of original
issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants in book-entry form, the Warrant Agent
shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance
with instructions delivered to the Warrant Agent by the Company. Ownership of beneficial interests in the Public Warrants shall be shown
on, and the transfer of such ownership shall be effected through, records maintained by institutions that have accounts with The Depository
Trust Company (the “Depositary”) (such institution, with respect to a Warrant in its account, a “Participant”).
If the Depositary subsequently
ceases to make its book-entry settlement system available for the Public Warrants, the Company may instruct the Warrant Agent regarding
making other arrangements for book-entry settlement. In the event that the Public Warrants are not eligible for, or it is no longer necessary
to have the Public Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to deliver
to the Warrant Agent for cancellation each book-entry Public Warrant, and the Company shall instruct the Warrant Agent to deliver to the
Depositary definitive certificates in physical form evidencing such Warrants (“Definitive Warrant Certificates”)
which shall be in the form annexed hereto as Exhibit A.
Physical certificates, if
issued, shall be signed by, or bear the facsimile signature of, the Chairman of the Board, Chief Executive Officer or other principal
officer of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve
in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he
or she had not ceased to be such at the date of issuance.
2.3.2. Registered
Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat
the person in whose name such Warrant is registered in the Warrant Register (the “Registered Holder”) as the
absolute owner of such Warrant and of each Warrant represented thereby, for the purpose of any exercise thereof, and for all other purposes,
and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
2.4. Detachability
of Warrants. The Common Stock and Public Warrants comprising the Units shall begin separate trading on the 52nd day following the
date of the Prospectus or, if such 52nd day is not on a day, other than a Saturday, Sunday or federal holiday, on which banks in New York
City are generally open for normal business (a “Business Day”), then on the immediately succeeding Business
Day following such date, or earlier (the “Detachment Date”) with the consent of Evercore Group L.L.C., as representative
of the several underwriters, but in no event shall the Common Stock and the Public Warrants comprising the Units be separately traded
until (A) the Company has filed a Current Report on Form 8-K with the Commission containing an audited balance sheet reflecting
the receipt by the Company of the gross proceeds of the Offering, including the proceeds then received by the Company from the exercise
by the underwriters of their right to purchase additional Units in the Offering (the “Over-allotment Option”),
if the Over-allotment Option is exercised prior to the filing of the Current Report on Form 8-K, and (B) the Company issues
a press release announcing when such separate trading shall begin.
2.5. Fractional
Warrants. The Company shall not issue fractional Warrants other than as part of the Units, each of which is comprised of one share
of Common Stock and one-half of one whole Public Warrant. If, upon the detachment of Public Warrants from the Units or otherwise, a holder
of Warrants would be entitled to receive a fractional Warrant, the Company shall round down to the nearest whole number the number of
Warrants to be issued to such holder.
2.6. Private
Placement Warrants. The Private Placement Warrants shall be identical to the Public Warrants, except that so long as they are held
by the Sponsor, the Company’s officers and directors or any of their Permitted Transferees (as defined below), as applicable, the
Private Placement Warrants: (i) may be exercised for cash or on a “cashless basis,” pursuant to subsection 3.3.1(c) hereof,
(ii) including the Common Stock issuable upon exercise of the Private Placement Warrants, may not be transferred, assigned or sold
until thirty (30) days after the completion by the Company of an initial Business Combination, and (iii) shall not be redeemable
by the Company; provided, however, that in the case of (ii), the Private Placement Warrants and any Common Stock issued
upon exercise of the Private Placement Warrants may be transferred by the holders thereof:
(a) to
the Company’s officers or directors, any affiliates or family members of any of the Company’s officers or directors, any affiliate
of the Sponsor or to any member of the Sponsor or any of their affiliates;
(b) in
the case of an individual, by gift to a member of such individual’s immediate family or to a trust, the beneficiary of which is
a member of such individual’s immediate family, an affiliate of such person or to a charitable organization;
(c) in
the case of an individual, by virtue of laws of descent and distribution upon death of such person;
(d) in
the case of an individual, pursuant to a qualified domestic relations order;
(e) by
private sales or transfers made in connection with any forward purchase agreement or similar arrangement or in connection with the consummation
of the Company’s Business Combination at prices no greater than the price at which the Private Placement Warrants or Common Stock,
as applicable, were originally purchased;
(f) by
virtue of the laws of the State of Delaware or the Sponsor’s organizational documents upon liquidation or dissolution of the Sponsor;
(g) in
the event of the Company’s liquidation prior to the completion of its initial Business Combination; or
(h) in
the event that, subsequent to the consummation of a Business Combination, the Company completes a liquidation, merger, share exchange
or other similar transaction which results in all of the Company’s stockholders having the right to exchange their Common Stock
for cash, securities or other property subsequent to the completion of the Company’s initial Business Combination;
provided,
however, that, in the case of clauses (a) through (f), these permitted transferees (the “Permitted Transferees”)
must enter into a written agreement with the Company agreeing to be bound by the transfer restrictions in this Agreement and the other
restrictions contained in the letter agreement, dated the date hereof, by and among the Company, the Sponsor and the Company’s officers
and directors.
2.7. Working
Capital Warrants. Each of the Working Capital Warrants shall be identical to the Private Placement Warrants.
2.8. Post-IPO
Warrants. The Post-IPO Warrants, when and if issued, shall have the same terms and be in the same form as the Public Warrants except
as may be agreed upon by the Company.
3. Terms
and Exercise of Warrants.
3.1. Warrant
Price. Each whole Warrant shall entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement,
to purchase from the Company the number of shares of Common Stock stated therein, at the price of $11.50 per share, subject to the adjustments
provided in Section 4 hereof and in the last sentence of this Section 3.1. The term “Warrant Price”
as used in this Agreement shall mean the price per share (including in cash or by payment of Warrants pursuant to a “cashless exercise,”
to the extent permitted hereunder) described in the prior sentence at which shares of Common Stock may be purchased at the time a Warrant
is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below)
for a period of not less than fifteen Business Days (unless otherwise required by the Commission, any national securities exchange on
which the Warrants are listed or applicable law); provided that the Company shall provide at least five days’ prior written
notice of such reduction to Registered Holders of the Warrants; and provided further, that any such reduction shall be identical
among all of the Warrants.
3.2. Duration
of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”) (A) commencing
on the date that is thirty (30) days after the first date on which the Company completes a Business Combination, and (B) terminating
at the earliest to occur of (x) 5:00 p.m., New York City time on the date that is five (5) years after the date on which the
Company completes its initial Business Combination, (y) the liquidation of the Company in accordance with the Company’s certificate
of incorporation (as amended from time to time, the “Charter”), if the Company fails to complete a Business
Combination, and (z) 5:00 p.m., New York City time on the Redemption Date (as defined below) as provided in Section 6.3
hereof; provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions,
as set forth in subsection 3.3.2 below, with respect to an effective registration statement or a valid exemption therefrom being
available. Except with respect to the right to receive the Redemption Price (as defined below) in the event of a redemption (as set forth
in Section 6 hereof), each Warrant not exercised on or before the Redemption Date shall become void, and all rights thereunder
and all rights in respect thereof under this Agreement shall cease at 5:00 p.m. New York City time on the Redemption Date. The Company
in its sole discretion may extend the duration of the Warrants by delaying the Redemption Date; provided that the Company
shall provide at least twenty (20) days prior written notice of any such extension to Registered Holders of the Warrants and, provided
further that any such extension shall be identical in duration among all the Warrants.
3.3. Exercise
of Warrants.
3.3.1. Payment.
Subject to the provisions of the Warrant and this Agreement, a Warrant may be exercised by the Registered Holder thereof by delivering
to the Warrant Agent at its corporate trust department (i) the Definitive Warrant Certificate evidencing the Warrants to be exercised,
or, in the case of a Warrant represented by a book-entry, the Warrants to be exercised (the “Book-Entry Warrants”)
on the records of the Depositary to an account of the Warrant Agent at the Depositary designated for such purposes in writing by the Warrant
Agent to the Depositary from time to time, (ii) an election to purchase (“Election to Purchase”) any shares
of Common Stock pursuant to the exercise of a Warrant, properly completed and executed by the Registered Holder on the reverse of the
Definitive Warrant Certificate or, in the case of a Book-Entry Warrant, properly delivered by the Participant in accordance with the Depositary’s
procedures, and (iii) the payment in full of the Warrant Price for each share of Common Stock as to which the Warrant is exercised
and any and all applicable taxes due in connection with the exercise of the Warrant, the exchange of the Warrant for the shares of Common
Stock and the issuance of such shares of Common Stock, as follows:
(a) in
lawful money of the United States, in good certified check or wire payable to the Warrant Agent;
(b) [Reserved];
(c) with
respect to any Private Placement Warrant, so long as such Private Placement Warrant is held by the Sponsor, one of the Company’s
directors or officers or a Permitted Transferee, by surrendering the Warrants for that number of shares of Common Stock equal to the quotient
obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the excess of
the “Sponsor Exercise Fair Market Value” (as defined in this subsection 3.3.1(c)) over the Warrant Price
by (y) the Sponsor Exercise Fair Market Value. Solely for purposes of this subsection 3.3.1(c), the “Sponsor Fair
Market Value” shall mean the average last reported sale price of the Common Stock for the ten (10) trading days ending
on the third (3rd) trading day prior to the date on which notice of exercise of the Private Placement Warrant is sent to the Warrant Agent;
(d) as
provided in Section 6.2 hereof with respect to a Make-Whole Exercise; or
(e) as
provided in Section 7.4 hereof.
3.3.2. Issuance
of Common Stock on Exercise. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of
the Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company shall issue to the Registered Holder of such Warrant
a book-entry position or certificate, as applicable, for the number of full shares of Common Stock to which he, she or it is entitled,
registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new
book-entry position or countersigned Warrant, as applicable, for the number of shares of Common Stock as to which such Warrant shall not
have been exercised. If fewer than all the Warrants evidenced by a Book Entry Warrant Certificate are exercised, a notation shall be made
to the records maintained by the Depositary, its nominee for each Book Entry Warrant Certificate, or a Participant, as appropriate, evidencing
the balance of the Warrants remaining after such exercise. Notwithstanding the foregoing, the Company shall not be obligated to deliver
any shares of Common Stock pursuant to the exercise of a Warrant and shall have no obligation to settle such Warrant exercise unless a
registration statement under the Securities Act with respect to the shares of Common Stock underlying the Public Warrants is then effective
and a prospectus relating thereto is current, subject to the Company’s satisfying its obligations under Section 7.4.
No Warrant shall be exercisable and the Company shall not be obligated to issue shares of Common Stock upon exercise of a Warrant unless
the Common Stock issuable upon such Warrant exercise have been registered, qualified or deemed to be exempt from registration or qualification
under the securities laws of the state of residence of the Registered Holder of the Warrants. In the event that the conditions in the
two immediately preceding sentences are not satisfied with respect to a Warrant, the holder of such Warrant shall not be entitled to exercise
such Warrant and such Warrant may have no value and expire worthless, in which case the purchaser of a Unit containing such Public Warrants
shall have paid the full purchase price for the Units solely for the shares of Common Stock underlying such Unit. In no event will the
Company be required to net cash settle the Warrant exercise. Subject to Section 4.6 of this Agreement, a Registered Holder
of Warrants may exercise its Warrants only for a whole number of Common Stock. The Company may require holders of Public Warrants to settle
the Warrant on a “cashless basis” pursuant to Section 7.4. If, by reason of any exercise of Warrants on a “cashless
basis”, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share
of Common Stock, the Company shall round down to the nearest whole number, the number of shares of Common Stock to be issued to such holder.
3.3.3. Valid
Issuance. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly
issued, fully paid and nonassessable.
3.3.4. Date
of Issuance. Each person in whose name any book-entry position or certificate, as applicable, for shares of Common Stock is issued
shall for all purposes be deemed to have become the holder of record of such shares of Common Stock on the date on which the Warrant,
or book-entry position representing such Warrant, was surrendered and payment of the Warrant Price was made, irrespective of the date
of delivery of such certificate in the case of a certificated Warrant, except that, if the date of such surrender and payment is a date
when the share transfer books of the Company or book-entry system of the Warrant Agent are closed, such person shall be deemed to have
become the holder of such shares of Common Stock at the close of business on the next succeeding date on which the share transfer books
or book-entry system are open.
3.3.5. Maximum
Percentage. A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions contained
in this subsection 3.3.5; however, no holder of a Warrant shall be subject to this subsection 3.3.5 unless he, she
or it makes such election. If the election is made by a holder, the Warrant Agent shall not effect the exercise of the holder’s
Warrant, and such holder shall not have the right to exercise such Warrant, to the extent that after giving effect to such exercise, such
person (together with such person’s affiliates), to the Warrant Agent’s actual knowledge, would beneficially own in excess
of 4.9% or 9.8% (or such other amount as a holder may specify) (the “Maximum Percentage”) of the shares of Common
Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares
of Common Stock beneficially owned by such person and its affiliates shall include the number of shares of Common Stock issuable upon
exercise of the Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock
that would be issuable upon (x) exercise of the remaining, unexercised portion of the Warrant beneficially owned by such person and
its affiliates and (y) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially
owned by such person and its affiliates (including, without limitation, any convertible notes or convertible preferred stock or warrants)
subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence,
for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). For purposes of the Warrant, in determining the number
of outstanding shares of Common Stock, the holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the
Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other
public filing with the Commission as the case may be, (2) a more recent public announcement by the Company or (3) any other
notice by the Company or Continental Stock Transfer & Trust Company, as transfer agent (in such capacity, the “Transfer
Agent”), setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written request
of the holder of the Warrant, the Company shall, within two (2) Business Days, confirm orally and in writing to such holder the number
of shares of Common Stock then outstanding. In any case, the number of issued and outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of equity securities of the Company by the holder and its affiliates since the date
as of which such number of issued and outstanding shares of Common Stock was reported. By written notice to the Company, the holder of
a Warrant may from time to time increase or decrease the Maximum Percentage applicable to such holder to any other percentage specified
in such notice; provided, however, that any such increase shall not be effective until the sixty-first (61st) day after such
notice is delivered to the Company.
4. Adjustments.
4.1. Stock
Dividends.
4.1.1. Split-Ups.
If after the date hereof, and subject to the provisions of Section 4.6 below, the number of issued and outstanding shares
of Common Stock is increased by a stock dividend of Common Stock, or by a split-up of shares of Common Stock or other similar event, then,
on the effective date of such share split-ups or similar event, the number of shares of Common Stock issuable on exercise of each Warrant
shall be increased in proportion to such increase in the issued and outstanding shares of Common Stock. A rights offering made to all
or substantially all holders of the Common Stock entitling holders to purchase shares of Common Stock at a price less than the “Historical
Fair Market Value” (as defined below) shall be deemed a stock dividend of a number of shares of Common Stock equal to the product
of (i) the number of shares of Common Stock actually sold in such rights offering (or issuable under any other equity securities
sold in such rights offering that are convertible into or exercisable for the Common Stock) and (ii) one (1) minus the quotient
of (x) the price per share of Common Stock paid in such rights offering divided by (y) the Historical Fair Market Value. For
purposes of this subsection 4.1.1, (i) if the rights offering is for securities convertible into or exercisable for Common
Stock, in determining the price payable for Common Stock, there shall be taken into account any consideration received for such rights,
as well as any additional amount payable upon exercise or conversion and (ii) “Historical Fair Market Value”
means the volume weighted average price of the Common Stock during the ten (10) trading day period ending on the trading day prior
to the first date on which the shares of Common Stock trade on the applicable exchange or in the applicable market, regular way, without
the right to receive such rights.
4.1.2. Extraordinary
Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, pays to all or substantially all of the holders
of the Common Stock a dividend or makes a distribution in cash, securities or other assets on account of such shares of Common Stock (or
other shares into which the Warrants are convertible), other than (a) as described in subsection 4.1.1 above, (b) Ordinary
Cash Dividends (as defined below), (c) to satisfy the redemption rights of the holders of the Common Stock in connection with a proposed
initial Business Combination, (d) to satisfy the redemption rights of the holders of the Common Stock in connection with a stockholder
vote to amend the Company’s Charter (i) to modify the substance or timing of the Company’s obligation to provide holders
of Common Stock the right to have their shares redeemed in connection with the Company’s initial Business Combination or to redeem
100% of the Company’s public shares if it does not complete its initial Business Combination within the period set forth in the
Charter, or (ii) with respect to any other provision relating to the rights of holders of Common Stock or (e) in connection
with the redemption of public shares upon the failure of the Company to complete its initial Business Combination and any subsequent distribution
of its assets upon its liquidation (any such non-excluded event being referred to herein as an “Extraordinary Dividend”),
then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount
of cash and/or the fair market value (as determined by the Company’s board of directors (the “Board”),
in good faith) of any securities or other assets paid on each share of Common Stock in respect of such Extraordinary Dividend. For purposes
of this subsection 4.1.2, “Ordinary Cash Dividends” means any cash dividend or cash distribution that,
when combined on a per share basis, with the per share amounts of all other cash dividends and cash distributions paid on the Common Stock
during the 365-day period ending on the date of declaration of such dividend or distribution to the extent it does not exceed $0.50 (which
amount shall be adjusted to appropriately reflect any of the events referred to in other subsections of this Section 4 and
excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number of shares of Common
Stock issuable on exercise of each Warrant).
4.2. Aggregation
of Shares. If after the date hereof, and subject to the provisions of Section 4.6 hereof, the number of issued and outstanding
shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock
or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar
event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in
issued and outstanding shares of Common Stock.
4.3. Adjustments
in Warrant Price. Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided
in subsection 4.1.1 or Section 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying
such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of
Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which
shall be the number of shares of Common Stock so purchasable immediately thereafter.
4.4. Raising
of Capital in Connection with the Initial Business Combination. If (x) the Company issues additional shares of Common Stock or
equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price
or effective issue price of less than $9.20 per share of Common Stock (with such issue price or effective issue price to be determined
in good faith by the Board and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any shares
of Class B Common Stock (as defined below), par value $0.0001 per share, of the Company held by the Sponsor or such affiliates, as
applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such
issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s
initial Business Combination on the date of the completion of the Company’s initial Business Combination (net of redemptions), and
(z) the volume-weighted average trading price of the Common Stock during the twenty (20) trading day period starting on the trading
day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”)
is below $9.20 per share, the Warrant Price shall be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value
and the Newly Issued Price, the $18.00 per share redemption trigger price described in Section 6.1 and Section 6.2
shall be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price and the $10.00
per share redemption trigger price described in Section 6.2 shall be adjusted (to the nearest cent) to be equal to the higher
of the Market Value and the Newly Issued Price.
4.5. Replacement
of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the issued and outstanding shares
of Common Stock (other than a change under Section 4.1 or Section 4.2 hereof or that solely affects the par value
of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing corporation (and is not a subsidiary of another entity whose stockholders
did not own all or substantially all of the Common Stock of the Company in substantially the same proportions immediately before such
transaction) and that does not result in any reclassification or reorganization of the issued and outstanding shares of Common Stock),
or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety
or substantially as an entirety in connection with which the Company is dissolved, the holders of the Warrants shall thereafter have the
right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares of
Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the
kind and amount of shares or stock or other securities or property (including cash) receivable upon such reclassification, reorganization,
merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the Warrants would have received
if such holder had exercised his, her or its Warrant(s) immediately prior to such event (the “Alternative Issuance”);
provided, however, that (i) if the holders of the Common Stock were entitled to exercise a right of election as to the kind
or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash
or other assets constituting the Alternative Issuance for which each Warrant shall become exercisable shall be deemed to be the weighted
average of the kind and amount received per share by the holders of the Common Stock in such consolidation or merger that affirmatively
make such election, and (ii) if a tender, exchange or redemption offer shall have been made to and accepted by the holders of the
Common Stock (other than a tender, exchange or redemption offer made by the Company in connection with redemption rights held by stockholders
of the Company as provided for in the Charter or as a result of the redemption of shares of Common Stock by the Company if a proposed
initial Business Combination is presented to the stockholders of the Company for approval) under circumstances in which, upon completion
of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under
the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2
under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within
the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the issued and outstanding shares of Common Stock, the holder
of a Warrant shall be entitled to receive as the Alternative Issuance, the highest amount of cash, securities or other property to which
such holder would actually have been entitled as a stockholder if such Warrant holder had exercised the Warrant prior to the expiration
of such tender or exchange offer, accepted such offer and all of the Common Stock held by such holder had been purchased pursuant to such
tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent
as possible to the adjustments provided for in this Section 4; provided further that if less than 70% of the consideration
receivable by the holders of the Common Stock in the applicable event is payable in the form of common stock in the successor entity that
is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed
for trading or quoted immediately following such event, and if the Registered Holder properly exercises the Warrant within thirty (30)
days following the public disclosure of the consummation of such applicable event by the Company pursuant to a Current Report on Form 8-K
filed with the Commission, the Warrant Price shall be reduced by an amount (in dollars) equal to the difference of (i) the Warrant
Price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined below) (but in no event less
than zero) minus (B) the Black-Scholes Warrant Value (as defined below). The “Black-Scholes Warrant Value”
means the value of a Warrant immediately prior to the consummation of the applicable event based on the Black-Scholes Warrant Model for
a Capped American Call on Bloomberg Financial Markets (assuming zero dividends) (“Bloomberg”). For purposes
of calculating such amount, (i) Section 6 of this Agreement shall be taken into account, (ii) the price of each
share of Common Stock shall be the volume weighted average price of the Common Stock during the ten (10) trading day period ending
on the trading day prior to the effective date of the applicable event, (iii) the assumed volatility shall be the 90 day volatility
obtained from the HVT function on Bloomberg determined as of the trading day immediately prior to the day of the announcement of the applicable
event and (iv) the assumed risk-free interest rate shall correspond to the U.S. Treasury rate for a period equal to the remaining
term of the Warrant. “Per Share Consideration” means (i) if the consideration paid to holders of the Common
Stock consists exclusively of cash, the amount of such cash per share of Common Stock, and (ii) in all other cases, the volume weighted
average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the effective
date of the applicable event. If any reclassification or reorganization also results in a change in shares of Common Stock covered by
subsection 4.1.1, then such adjustment shall be made pursuant to subsection 4.1.1 or Sections 4.2, 4.3 and
this Section 4.4. The provisions of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations,
mergers or consolidations, sales or other transfers. In no event shall the Warrant Price be reduced to less than the par value per share
issuable upon exercise of such Warrant.
4.6. Notices
of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares of Common Stock issuable upon exercise of
a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from
such adjustment and the increase or decrease, if any, in the number of shares of Common Stock purchasable at such price upon the exercise
of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the
occurrence of any event specified in Sections 4.1, 4.2, 4.3, 4.4 or 4.5, the Company shall give written notice of the occurrence
of such event to each holder of a Warrant, at the last address set forth for such holder in the Warrant Register, of the record date or
the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such
event.
4.7. No
Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional
shares of Common Stock upon the exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the
holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall,
upon such exercise, round down to the nearest whole number the number of shares of Common Stock to be issued to such holder.
4.8. Form of
Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued
after such adjustment may state the same Warrant Price and the same number of shares of Common Stock as is stated in the Warrants initially
issued pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion make any change in
the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued
or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
4.9. Other
Events. In case any event shall occur affecting the Company as to which none of the provisions of the preceding subsections of this
Section 4 are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i) avoid
an adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case,
the Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national
standing, which shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to effectuate
the intent and purpose of this Section 4 and, if they determine that an adjustment is necessary, the terms of such adjustment.
The Company shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in such opinion.
4.10. No
Adjustment. For the avoidance of doubt, no adjustment shall be made to the terms of the Warrants solely as a result of an adjustment
to the conversion ratio of the shares of the Company's Class B common stock (the “Class B Common Stock”)
into Common Stock or the conversion of the shares of Class B Common Stock into Common Stock, in each case, pursuant to the Charter.
5. Transfer
and Exchange of Warrants.
5.1. Registration
of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register,
upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions
for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant
shall be cancelled by the Warrant Agent. In the case of certificated Warrants, the Warrants so cancelled shall be delivered by the Warrant
Agent to the Company from time to time upon request.
5.2. Procedure
for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer,
and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the
Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that except as otherwise provided
herein or with respect to any Book-Entry Warrant, each Book-Entry Warrant may be transferred only in whole and only to the Depositary,
to another nominee of the Depositary, to a successor depository, or to a nominee of a successor depository; provided further,
however that in the event that a Warrant surrendered for transfer bears a restrictive legend (as in the case of the Private Placement
Warrants), the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange thereof until the Warrant Agent has received
an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a
restrictive legend.
5.3. Fractional
Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange that shall result in the issuance
of a warrant certificate or book-entry position for a fraction of a warrant, except as part of the Units.
5.4. Service
Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.
5.5. Warrant
Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms
of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever
required by the Warrant Agent, shall supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
5.6. Transfer
of Warrants. Prior to the Detachment Date, the Public Warrants may be transferred or exchanged only together with the Unit in which
such Warrant is included, and only for the purpose of effecting, or in conjunction with, a transfer or exchange of such Unit. Furthermore,
each transfer of a Unit on the register relating to such Units shall operate also to transfer the Warrants included in such Unit. Notwithstanding
the foregoing, the provisions of this Section 5.6 shall have no effect on any transfer of Warrants on and after the Detachment
Date.
6. Redemption.
6.1. Redemption
of Warrants for Cash. Subject to Section 6.5 hereof, not less than all of the outstanding Warrants may be redeemed, at
the option of the Company, at any time during the Exercise Period, at the office of the Warrant Agent, upon notice to the Registered Holders
of the Warrants, as described in Section 6.3 below, at a Redemption Price of $0.01 per Warrant, provided that (a) the
Reference Value equals or exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof) and (b) there
is an effective registration statement covering the issuance of the shares of Common Stock issuable upon exercise of the Warrants, and
a current prospectus relating thereto, available throughout the 30-day Redemption Period (as defined in Section 6.3 below).
6.2. Redemption
of Warrants for Shares of Common Stock. Subject to Section 6.5 hereof, not less than all of the outstanding Warrants may
be redeemed, at the option of the Company, at any time during the Exercise Period, at the office of the Warrant Agent, upon notice to
the Registered Holders of the Warrants, as described in Section 6.3 below, at a Redemption Price of $0.10 per Warrant, provided
that the Reference Value equals or exceeds $10.00 per share (subject to adjustment in compliance with Section 4 hereof). During
the 30-day Redemption Period in connection with a redemption pursuant to this Section 6.2, Registered Holders of the Warrants
may elect to exercise their Warrants on a “cashless basis” pursuant to subsection 3.3.1 and receive a number of shares
of Common Stock determined by reference to the table below, based on the Redemption Date (calculated for purposes of the table as the
period to expiration of the Warrants) and the “Redemption Fair Market Value” (as such term is defined in this Section 6.2)
(a “Make-Whole Exercise”). Solely for purposes of this Section 6.2, the “Redemption
Fair Market Value” shall mean the volume weighted average price of the shares of Common Stock for the ten (10) trading
days immediately following the date on which notice of redemption pursuant to this Section 6.2 is sent to the Registered Holders.
In connection with any redemption pursuant to this Section 6.2, the Company shall provide the Registered Holders with the
Redemption Fair Market Value no later than one (1) Business Day after the ten (10) trading day period described above ends.
| | |
Fair Market Value of Class A Common Stock (period to expiration of warrants) | |
| Redemption Date | |
≤$10.00 | | |
$11.00 | | |
$12.00 | | |
$13.00 | | |
$14.00 | | |
$15.00 | | |
$16.00 | | |
$17.00 | | |
≥$18.00 | |
| 60 months | |
| 0.261 | | |
| 0.281 | | |
| 0.297 | | |
| 0.311 | | |
| 0.324 | | |
| 0.337 | | |
| 0.348 | | |
| 0.358 | | |
| 0.361 | |
| 57 months | |
| 0.257 | | |
| 0.277 | | |
| 0.294 | | |
| 0.310 | | |
| 0.324 | | |
| 0.337 | | |
| 0.348 | | |
| 0.358 | | |
| 0.361 | |
| 54 months | |
| 0.252 | | |
| 0.272 | | |
| 0.291 | | |
| 0.307 | | |
| 0.322 | | |
| 0.335 | | |
| 0.347 | | |
| 0.357 | | |
| 0.361 | |
| 51 months | |
| 0.246 | | |
| 0.268 | | |
| 0.287 | | |
| 0.304 | | |
| 0.320 | | |
| 0.333 | | |
| 0.346 | | |
| 0.357 | | |
| 0.361 | |
| 48 months | |
| 0.241 | | |
| 0.263 | | |
| 0.283 | | |
| 0.301 | | |
| 0.317 | | |
| 0.332 | | |
| 0.344 | | |
| 0.356 | | |
| 0.361 | |
| 45 months | |
| 0.235 | | |
| 0.258 | | |
| 0.279 | | |
| 0.298 | | |
| 0.315 | | |
| 0.330 | | |
| 0.343 | | |
| 0.356 | | |
| 0.361 | |
| 42 months | |
| 0.228 | | |
| 0.252 | | |
| 0.274 | | |
| 0.294 | | |
| 0.312 | | |
| 0.328 | | |
| 0.342 | | |
| 0.355 | | |
| 0.361 | |
| 39 months | |
| 0.221 | | |
| 0.246 | | |
| 0.269 | | |
| 0.290 | | |
| 0.309 | | |
| 0.325 | | |
| 0.340 | | |
| 0.354 | | |
| 0.361 | |
| 36 months | |
| 0.213 | | |
| 0.239 | | |
| 0.263 | | |
| 0.285 | | |
| 0.305 | | |
| 0.323 | | |
| 0.339 | | |
| 0.353 | | |
| 0.361 | |
| 33 months | |
| 0.205 | | |
| 0.232 | | |
| 0.257 | | |
| 0.280 | | |
| 0.301 | | |
| 0.320 | | |
| 0.337 | | |
| 0.352 | | |
| 0.361 | |
| 30 months | |
| 0.196 | | |
| 0.224 | | |
| 0.250 | | |
| 0.274 | | |
| 0.297 | | |
| 0.316 | | |
| 0.335 | | |
| 0.351 | | |
| 0.361 | |
| 27 months | |
| 0.185 | | |
| 0.214 | | |
| 0.242 | | |
| 0.268 | | |
| 0.291 | | |
| 0.313 | | |
| 0.332 | | |
| 0.350 | | |
| 0.361 | |
| 24 months | |
| 0.173 | | |
| 0.204 | | |
| 0.233 | | |
| 0.260 | | |
| 0.285 | | |
| 0.308 | | |
| 0.329 | | |
| 0.348 | | |
| 0.361 | |
| 21 months | |
| 0.161 | | |
| 0.193 | | |
| 0.223 | | |
| 0.252 | | |
| 0.279 | | |
| 0.304 | | |
| 0.326 | | |
| 0.347 | | |
| 0.361 | |
| 18 months | |
| 0.146 | | |
| 0.179 | | |
| 0.211 | | |
| 0.242 | | |
| 0.271 | | |
| 0.298 | | |
| 0.322 | | |
| 0.345 | | |
| 0.361 | |
| 15 months | |
| 0.130 | | |
| 0.164 | | |
| 0.197 | | |
| 0.230 | | |
| 0.262 | | |
| 0.291 | | |
| 0.317 | | |
| 0.342 | | |
| 0.361 | |
| 12 months | |
| 0.111 | | |
| 0.146 | | |
| 0.181 | | |
| 0.216 | | |
| 0.250 | | |
| 0.282 | | |
| 0.312 | | |
| 0.339 | | |
| 0.361 | |
| 9 months | |
| 0.090 | | |
| 0.125 | | |
| 0.162 | | |
| 0.199 | | |
| 0.237 | | |
| 0.272 | | |
| 0.305 | | |
| 0.336 | | |
| 0.361 | |
| 6 months | |
| 0.065 | | |
| 0.099 | | |
| 0.137 | | |
| 0.178 | | |
| 0.219 | | |
| 0.259 | | |
| 0.296 | | |
| 0.331 | | |
| 0.361 | |
| 3 months | |
| 0.034 | | |
| 0.065 | | |
| 0.104 | | |
| 0.150 | | |
| 0.197 | | |
| 0.243 | | |
| 0.286 | | |
| 0.326 | | |
| 0.361 | |
| 0 months | |
| — | | |
| — | | |
| 0.042 | | |
| 0.115 | | |
| 0.179 | | |
| 0.233 | | |
| 0.281 | | |
| 0.323 | | |
| 0.361 | |
The exact Redemption Fair
Market Value and Redemption Date may not be set forth in the table above, in which case, if the Redemption Fair Market Value is between
two values in the table or the Redemption Date is between two redemption dates in the table, the number of shares of Common Stock to be
issued for each Warrant exercised in a Make-Whole Exercise shall be determined by a straight-line interpolation between the number of
shares set forth for the higher and lower Redemption Fair Market Values and the earlier and later redemption dates, as applicable, based
on a 365- or 366-day year, as applicable.
The share prices set forth
in the column headings of the table above shall be adjusted as of any date on which the number of shares issuable upon exercise of a Warrant
or the Warrant Price is adjusted pursuant to Section 4 hereof. If the number of shares issuable upon exercise of a Warrant
is adjusted pursuant to Section 4 hereof, the adjusted share prices in the column headings shall equal the share prices immediately
prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise of a Warrant
immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a Warrant as so
adjusted. The number of shares in the table above shall be adjusted in the same manner and at the same time as the number of shares issuable
upon exercise of a Warrant. If the Warrant Price of a warrant is adjusted, (a) in the case of an adjustment pursuant to Section 4.4
hereof, the adjusted share prices in the column headings shall equal the share prices immediately prior to such adjustment multiplied
by a fraction, the numerator of which is the higher of the Market Value and the Newly Issued Price and the denominator of which is $10.00
and (b) in the case of an adjustment pursuant to Section 4.1.2 hereof, the adjusted share prices in the column headings
shall equal the share prices immediately prior to such adjustment less the decrease in the Warrant Price pursuant to such Warrant Price
adjustment. In no event shall the number of shares issued in connection with a Make-Whole Exercise exceed 0.361 shares of Common Stock
per Warrant (subject to adjustment)
6.3. Date
Fixed for, and Notice of, Redemption; Redemption Price; Reference Value. In the event that the Company elects to redeem
the Warrants pursuant to Sections 6.1 or 6.2, the Company shall fix a date for the redemption (the “Redemption
Date”). Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than thirty (30)
days prior to the Redemption Date (the “30-day Redemption Period”) to the Registered Holders of the Warrants
to be redeemed at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided
shall be conclusively presumed to have been duly given whether or not the Registered Holder received such notice. As used in this Agreement,
(a) “Redemption Price” shall mean the price per Warrant at which any Warrants are redeemed pursuant to
Sections 6.1 or 6.2 and (b) “Reference Value” shall mean the last reported sales price of
the shares of Common Stock for any twenty (20) trading days within the thirty (30) trading-day period ending on the third trading day
prior to the date on which notice of the redemption is given.
6.4. Exercise
After Notice of Redemption. The Warrants may be exercised, for cash (or on a “cashless basis” in accordance with Section 6.2
of this Agreement) at any time after notice of redemption shall have been given by the Company pursuant to Section 6.3 hereof
and prior to the Redemption Date. On and after the Redemption Date, the record holder of the Warrants shall have no further rights except
to receive, upon surrender of the Warrants, the Redemption Price.
6.5. Exclusion
of Private Placement Warrants. The Company agrees that (a) the redemption rights provided in Section 6.1 and Section 6.2
hereof shall not apply to the Private Placement Warrants, the Working Capital Warrants or the Post-IPO Warrants (if such Post-IPO Warrants
provide that they are non-redeemable by the Company) if at the time of the redemption such Private Placement Warrants, the Working Capital
Warrants or the Post-IPO Warrants continue to be held by the Sponsor or its Permitted Transferees, as applicable. However, once such Private
Placement Warrants, the Working Capital Warrants or the Post-IPO Warrants are transferred (other than to Permitted Transferees in accordance
with Section 2.6 hereof), the Company may redeem the Private Placement Warrants, the Working Capital Warrants or the Post-IPO
Warrants (if the Post-IPO Warrants permit such redemption by their terms) pursuant to Section 6.1 or 6.2 hereof, provided
that the criteria for redemption are met, including the opportunity of the holder of such Private Placement Warrants, Working Capital
Warrants or Post-IPO Warrants to exercise the Private Placement Warrants, the Working Capital Warrants or the Post-IPO Warrants prior
to redemption pursuant to Section 6.4 hereof. The Private Placement Warrants, Working Capital Warrants and Post-IPO Warrants
(if such Post-IPO Warrants provide that they are non-redeemable by the Company) that are transferred to persons other than Permitted Transferees
shall upon such transfer cease to be Private Placement Warrants, Working Capital Warrants and Post-IPO Warrants and shall become Public
Warrants under this Agreement, including for purposes of Section 9.8 hereof.
7. Other
Provisions Relating to Rights of Holders of Warrants.
7.1. No
Rights as Stockholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder of the Company,
including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent
or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other
matter.
7.2. Lost,
Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated or destroyed, the Company and the Warrant Agent
may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant,
include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated or
destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
7.3. Reservation
of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common
Stock that shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.
7.4. Registration
of Common Stock; Cashless Exercise at Company’s Option.
7.4.1. Registration
of the Common Stock. The Company agrees that as soon as practicable, but in no event later than fifteen (15) Business Days after the
closing of its initial Business Combination, it shall use its best efforts to file with the Commission a registration statement or post-effective
amendment to an existing registration statement for the registration, under the Securities Act, of the shares of Common Stock issuable
upon exercise of the Warrants. The Company shall use its best efforts to cause the same to become effective and to maintain the effectiveness
of such registration statement, and a current prospectus relating thereto, until the expiration of the Warrants in accordance with the
provisions of this Agreement. If any such registration statement has not been declared effective by the sixtieth (60th) Business Day following
the closing of the Business Combination, holders of the Warrants shall have the right, during the period beginning on the sixty-first
(61st) Business Day after the closing of the Business Combination and ending upon such registration statement being declared effective
by the Commission, and during any other period when the Company shall fail to have maintained an effective registration statement covering
the shares of Common Stock issuable upon exercise of the Warrants, to exercise such Warrants on a “cashless basis,” by exchanging
the Warrants (in accordance with Section 3(a)(9) of the Securities Act or another exemption) for that number of shares of Common
Stock equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying
the Warrants, multiplied by the excess of the “Fair Market Value” (as defined below) over the Warrant Price by (y) the
Fair Market Value and (B) 0.361 per Warrant. Solely for purposes of this subsection 7.4.1, “Fair Market Value”
shall mean the volume-weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the
trading day prior to the date that notice of exercise is received by the Warrant Agent from the holder of such Warrants or its securities
broker or intermediary. The date that notice of “cashless exercise” is received by the Warrant Agent shall be conclusively
determined by the Warrant Agent. In connection with the “cashless exercise” of a Public Warrant, the Company shall, upon request,
provide the Warrant Agent with an opinion of counsel for the Company (which shall be an outside law firm with securities law experience)
stating that (i) the exercise of the Warrants on a “cashless basis” in accordance with this subsection 7.4.1 is
not required to be registered under the Securities Act and (ii) the shares of Common Stock issued upon such exercise shall be freely
tradable under United States federal securities laws by anyone who is not an affiliate (as such term is defined in Rule 144 (or any
successor rule) under the Securities Act) of the Company and, accordingly, shall not be required to bear a restrictive legend. Except
as provided in subsection 7.4.2, for the avoidance of any doubt, unless and until all of the Warrants have been exercised or have
expired, the Company shall continue to be obligated to comply with its registration obligations under the first three sentences of this
subsection 7.4.1.
7.4.2. Cashless
Exercise at Company’s Option. If the Common Stock is at the time of any exercise of a Public Warrant not listed on a national
securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the
Securities Act, the Company may, at its option, (i) require holders of Public Warrants who exercise Public Warrants to exercise such
Public Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act as described in subsection
7.4.1 and (ii) in the event the Company so elects, the Company shall (x) not be required to file or maintain in effect a
registration statement for the registration, under the Securities Act, of the Common Stock issuable upon exercise of the Warrants, notwithstanding
anything in this Agreement to the contrary, and (y) use its commercially reasonable to register or qualify for sale the Common Stock
issuable upon exercise of the Public Warrant under applicable blue sky laws to the extent an exemption is not available.
8. Concerning
the Warrant Agent and Other Matters.
8.1. Payment
of Taxes. The Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant
Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of the Warrants, but the Company shall not be
obligated to pay any transfer taxes in respect of the Warrants or such shares of Common Stock.
8.2. Resignation,
Consolidation or Merger of Warrant Agent.
8.2.1. Appointment
of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged
from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the office
of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor
Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after
it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant (who shall, with
such notice, submit his, her or its Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court
of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any
successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation or other entity organized and existing
under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and State
of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or
state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties
and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further
act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver,
at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such
predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge,
and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent
all such authority, powers, rights, immunities, duties and obligations.
8.2.2. Notice
of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the
predecessor Warrant Agent and the Transfer Agent for the Common Stock not later than the effective date of any such appointment.
8.2.3. Merger
or Consolidation of Warrant Agent. Any entity into which the Warrant Agent may be merged or with which it may be consolidated or any
entity resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under
this Agreement without any further act.
8.3. Fees
and Expenses of Warrant Agent.
8.3.1. Remuneration.
The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and shall, pursuant
to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably
incur in the execution of its duties hereunder.
8.3.2. Further
Assurances. The Company agrees to perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged, and
delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying
out or performing of the provisions of this Agreement.
8.4. Liability
of Warrant Agent.
8.4.1. Reliance
on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established
by a statement signed by the Chief Executive Officer or Chairman of the Board of the Company and delivered to the Warrant Agent. The Warrant
Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.
8.4.2. Indemnity.
The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct, fraud or bad faith. The Company agrees
to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, out-of-pocket costs and reasonable
outside counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement, except as a result of the
Warrant Agent’s gross negligence, willful misconduct, fraud or bad faith.
8.4.3. Exclusions.
The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution
of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not be responsible to make any adjustments
required under the provisions of Section 4 hereof or responsible for the manner, method or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this
Agreement or any Warrant or as to whether any shares of Common Stock shall, when issued, be valid and fully paid and nonassessable.
8.5. Acceptance
of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms
and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently
account for, and pay to the Company, all monies received by the Warrant Agent for the purchase of shares of Common Stock through the exercise
of the Warrants.
8.6. Waiver.
The Warrant Agent has no right of set-off or any other right, title, interest or claim of any kind (“Claim”)
in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date
hereof, by and between the Company and Continental Stock Transfer & Trust Company as trustee thereunder) and hereby agrees not
to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. The Warrant
Agent hereby waives any and all Claims against the Trust Account and any and all rights to seek access to the Trust Account.
9. Miscellaneous
Provisions.
9.1. Successors.
All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns.
9.2. Notices.
Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant
to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private
courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent), as follows:
AMCI Acquisition Corp. II
600 Steamboat Road
Greenwich, CT 06830
Attention: Nimesh Patel, Chief
Executive Officer
Email: npatel@amcigroup.com
with a copy to:
White & Case LLP
1221 Avenue of the Americas
New York, NY 10020
Attn: Elliott M. Smith, Esq.
Email: elliott.smith@whitecase.com
Any notice, statement or demand authorized by
this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given
when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after
deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company),
as follows:
Continental Stock Transfer &
Trust Company
One State Street, 30th Floor
New York, NY 10004
Attention: Compliance Department
in each case, with copies to:
White & Case LLP
1221 Avenue of the Americas
New York, NY 10020
Attn: Elliott M. Smith, Esq.
Email: elliott.smith@whitecase.com
and
Cravath, Swaine &
Moore LLP
825 Eighth Avenue
New York, NY 10019
Attn: Andrew J. Pitts and Nicholas
A. Dorsey
Email: APitts@cravath.com and
NDorsey@cravath.com
9.3. Applicable
Law and Exclusive Forum. The validity, interpretation, and performance of this Agreement and of the Warrants, and all matters arising
therefrom or relating thereto, shall be governed in all respects by the laws of the State of New York. The Company hereby agrees that
any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the
courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to
such jurisdiction, which jurisdiction shall be exclusive forum for any such action, proceeding or claim. The Company hereby waives any
objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Notwithstanding the foregoing, the provisions
of this paragraph will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for
which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or
otherwise acquiring any interest in the Warrants shall be deemed to have notice of and to have consented to the forum provisions in this
Section 9.3. If any action, the subject matter of which is within the scope the forum provisions above, is filed in a court
other than a court located within the State of New York or the United States District Court for the Southern District of New York (a “foreign
action”) in the name of any warrant holder, such warrant holder shall be deemed to have consented to: (x) the personal jurisdiction
of the state and federal courts located within the State of New York or the United States District Court for the Southern District of
New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”),
and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder's
counsel in the foreign action as agent for such warrant holder.
9.4. Persons
Having Rights under this Agreement. Nothing in this Agreement shall be construed to confer upon, or give to, any person, corporation
or other entity other than the parties hereto and the Registered Holders of the Warrants any right, remedy or claim under or by reason
of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises
and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and
assigns and of the Registered Holders of the Warrants.
9.5. Examination
of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in
the Borough of Manhattan, City and State of New York, for inspection by the Registered Holder of any Warrant. The Warrant Agent may require
any such holder to submit such holder’s Warrant for inspection by the Warrant Agent.
9.6. Counterparts.
This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
9.7. Effect
of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation
thereof.
9.8. Amendments.
This Agreement may be amended by the parties hereto without the consent of any Registered Holder for the purpose of (i) curing any
ambiguity or to correct any defective provision or mistake, including to conform the provisions hereof to the description of the terms
of the Warrants and this Agreement set forth in the Prospectus, (ii) amending the definition of “Ordinary Cash Dividend”
as contemplated by and in accordance with the second sentence of subsection 4.1.2 or (iii) adding or changing any provisions
with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties
deem shall not adversely affect the rights of the Registered Holders under this Agreement. All other modifications or amendments, including
any modification or amendment to increase the Warrant Price or shorten the Exercise Period and any amendment to the terms of only the
Private Placement Warrants, shall require the vote or written consent of the Registered Holders of 50% of the then-outstanding Public
Warrants and, solely with respect to any amendment to the terms of the Private Placement Warrants or any provision of this Agreement with
respect to the Private Placement Warrants, 50% of the then-outstanding Private Placement Warrants. Notwithstanding the foregoing, the
Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively,
without the consent of the Registered Holders.
9.9. Severability.
This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable
term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to
such invalid or unenforceable provision as may be possible and be valid and enforceable.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the date first above written.
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AMCI ACQUISITION CORP. II |
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By: |
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Name: Nimesh Patel |
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Title: Chief Executive Officer |
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY
as Warrant Agent |
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By: |
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Name: |
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Title: |
[Signature
Page to Warrant Agreement]
Exhibit A
[FACE]
Number
Warrants
THIS WARRANT SHALL BE VOID IF NOT EXERCISED
PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR
IN THE WARRANT AGREEMENT DESCRIBED BELOW
AMCI Acquisition Corp. II
Incorporated Under the Laws of the State of
Delaware
CUSIP [ ]
Warrant Certificate
This
Warrant Certificate certifies that [ ], or registered assigns, is the registered holder of [ ]
warrant(s) (the “Warrants” and each, a “Warrant”) to purchase shares of Class A
common stock, $0.0001 par value (“Class A Common Stock”), of AMCI Acquisition Corp. II, a Delaware corporation
(the “Company”). Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant
Agreement referred to below, to receive from the Company that number of fully paid and nonassessable shares of Class A Common Stock
as set forth below, at the exercise price (the “Warrant Price”) as determined pursuant to the Warrant Agreement,
payable in lawful money (or through “cashless exercise” as provided for in the Warrant Agreement) of the United
States of America upon surrender of this Warrant Certificate and payment of the Warrant Price at the office or agency of the Warrant Agent
referred to below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate
but not defined herein shall have the meanings given to them in the Warrant Agreement.
Each whole Warrant is initially
exercisable for one fully paid and nonassessable share of Class A Common Stock. Fractional shares shall not be issued upon exercise
of any Warrant. If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in a share of Class A
Common Stock, the Company shall, upon exercise, round down to the nearest whole number the number of shares of Class A Common Stock
to be issued to the Warrant holder. The number of shares of Class A Common Stock issuable upon exercise of the Warrants is subject
to adjustment upon the occurrence of certain events as set forth in the Warrant Agreement.
The initial Warrant Price
per share of Class A Common Stock for any Warrant is equal to $11.50 per share. The Warrant Price is subject to adjustment upon the
occurrence of certain events as set forth in the Warrant Agreement.
Subject to the conditions
set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the
end of such Exercise Period, such Warrants shall become void. The Warrants may be redeemed, subject to certain conditions, as set forth
in the Warrant Agreement.
Reference is hereby made to
the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Warrant Certificate shall
not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement. This Warrant Certificate and all
matters arising therefrom or relating thereto shall be governed by and construed in accordance with the internal laws of the State of
New York.
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AMCI ACQUISITION CORP. II |
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By: |
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Name: |
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Title: Authorized Signatory |
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent |
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By: |
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Name: |
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Title: |
[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by
this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive [ ] shares of Class A
Common Stock and are issued or to be issued pursuant to a Warrant Agreement dated as of [●], 2021 (the “Warrant
Agreement”), duly executed and delivered by the Company to Continental Stock Transfer & Trust Company, a New York
limited purpose trust company, as warrant agent (the “Warrant Agent”), which Warrant Agreement is hereby incorporated
by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words “holders” or “holder”
meaning the Registered Holders or Registered Holder, respectively) of the Warrants. A copy of the Warrant Agreement may be obtained by
the holder hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have
the meanings given to them in the Warrant Agreement.
Warrants may be exercised
at any time during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate
may exercise them by surrendering this Warrant Certificate, with the form of Election to Purchase set forth hereon properly completed
and executed, together with payment of the Warrant Price as specified in the Warrant Agreement (or through “cashless exercise”
as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any exercise
of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there
shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number of Warrants not exercised.
Notwithstanding anything else
in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration
statement covering the issuance of the shares of Class A Common Stock to be issued upon exercise is effective under the Securities
Act and (ii) a prospectus thereunder relating to the shares of Class A Common Stock is current, except through “cashless
exercise” as provided for in the Warrant Agreement.
The Warrant Agreement provides
that upon the occurrence of certain events the number of shares of Class A Common Stock issuable upon exercise of the Warrants set
forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be
entitled to receive a fractional interest in a share of Class A Common Stock, the Company shall, upon exercise, round down to the
nearest whole number of shares of Class A Common Stock to be issued to the holder of the Warrant.
Warrant Certificates, when
surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative
or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement,
but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate
a like number of Warrants.
Upon due presentation for
registration of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates
of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental
charge imposed in connection therewith.
The Company and the Warrant
Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the
contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.
Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably
elects to exercise the right, represented by this Warrant Certificate, to receive [ ] shares of Class A Common Stock and
herewith tenders payment for such shares of Class A Common Stock to the order of AMCI Acquisition Corp. II (the “Company”)
in the amount of $[ ] in accordance with the terms hereof. The undersigned requests that a certificate for such shares of Class A
Common Stock be registered in the name of [ ], whose address is [ ] and that such shares of Class A Common
Stock be delivered to [ ] whose address is [ ]. If said [ ] number of shares of Class A Common Stock
is less than all of the shares of Class A Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such shares of Class A Common Stock be registered in the name of [ ], whose address
is [ ] and that such Warrant Certificate be delivered to [ ], whose address is [ ].
In the event that the Warrant
has been called for redemption by the Company pursuant to Section 6.2 of the Warrant Agreement and a holder thereof elects
to exercise its Warrant pursuant to a Make-Whole Exercise, the number of shares of Class A Common Stock that this Warrant is exercisable
for shall be determined in accordance with subsection 3.3.1(c) or Section 6.2 of the Warrant Agreement, as applicable.
In the event that the Warrant
is a Private Placement Warrant that is to be exercised on a “cashless” basis pursuant to subsection 3.3.1(c) of
the Warrant Agreement, the number of shares of Class A Common Stock that this Warrant is exercisable for shall be determined in accordance
with subsection 3.3.1(c) of the Warrant Agreement.
In the event that the Warrant
is to be exercised on a “cashless” basis pursuant to Section 7.4 of the Warrant Agreement, the number of shares
of Class A Common Stock that this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the
Warrant Agreement.
In the event that the Warrant
may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares of Class A
Common Stock that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement
which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably
elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement,
to receive shares of Class A Common Stock. If said number of shares is less than all of the shares of Class A Common Stock purchasable
hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate representing the remaining
balance of such shares of Class A Common Stock be registered in the name of [ ], whose address is [ ] and that
such Warrant Certificate be delivered to [ ], whose address is [ ].
[Signature Page Follows]
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THE SIGNATURE(S) SHOULD
BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED).
Exhibit B
LEGEND
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES
LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, SUBJECT TO ANY ADDITIONAL LIMITATIONS ON TRANSFER DESCRIBED IN THE LETTER
AGREEMENT BY AND AMONG AMCI ACQUISITION CORP. II (THE “COMPANY”), AMCI SPONSOR II LLC AND THE OTHER PARTIES
THERETO, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE THAT IS THIRTY (30) DAYS
AFTER THE DATE UPON WHICH THE COMPANY COMPLETES ITS INITIAL BUSINESS COMBINATION (AS DEFINED IN THE RECITALS OF THE WARRANT AGREEMENT
REFERRED TO HEREIN) EXCEPT TO A PERMITTED TRANSFEREE (AS DEFINED IN SECTION 2 OF THE WARRANT AGREEMENT REFERRED TO HEREIN)
WHO AGREES IN WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.
SECURITIES EVIDENCED BY THIS CERTIFICATE AND SHARES
OF CLASS A COMMON STOCK OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION
AGREEMENT TO BE EXECUTED BY THE COMPANY.
NO. [ ] WARRANT
Exhibit 5.1
| June 14, 2021 |
 |
| |
| AMCI Acquisition Corp. II |
| 600
Steamboat Road |
| Greenwich, Connecticut 06830 |
Ladies and Gentlemen:
We have acted as New York
counsel to AMCI Acquisition Corp. II, a corporation organized under the laws of Delaware (the “Company”), in connection
with the preparation and filing by the Company with the Securities and Exchange Commission (the “Commission”) of a
registration statement on Form S-1 (as amended, the “Registration Statement”) and the related prospectus relating
to the registration under the Securities Act of 1933, as amended (the “Securities Act”), of the offer and sale by the
Company of 17,250,000 units of the Company, including up to 2,250,000 units which may be purchased from the Company upon the exercise
of the over-allotment option to purchase additional units set forth in the Underwriting Agreement (as defined below) (collectively, the
“Units”), with each Unit consisting of one share of the Company’s Class A common stock, par value $0.0001
per share (the “Common Stock”), and one-half of one redeemable warrant (each, a “Warrant”), each
whole Warrant entitling the holder to purchase one share of Common Stock.
This
opinion letter is rendered in accordance with the requirements of Item 601(b)(5) of Regulation S–K under the Securities Act,
and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or related prospectus,
any prospectus filed pursuant to Rule 424(b) with respect thereto, other than as expressly stated herein with respect to the
issue of the Units.
In connection with our opinions
expressed below, we have examined originals or copies certified or otherwise identified to our satisfaction of the following documents
and such other documents, corporate records, certificates and other statements of government officials and corporate officers of the Company
as we deemed necessary for the purposes of the opinions set forth in this opinion letter:
| (a) | the Registration Statement; |
| (b) | the form of underwriting agreement to be entered into between the Company and the representative on behalf
of each of the several underwriters named in Schedule A thereto, filed as Exhibit 1.1 to the Registration Statement (the “Underwriting
Agreement”); |
| (c) | the form of Unit certificate, filed as Exhibit 4.1 to the Registration Statement; |
| (d) | the form of Common Stock certificate, filed as Exhibit 4.2 to the Registration Statement; |
| (e) | the form of Warrant certificate, filed as Exhibit 4.3 to the Registration Statement; |
| (f) | the form of Warrant Agreement to be entered into by and between the Company and Continental Stock Transfer &
Trust Company, as warrant agent (the “Warrant Agent”), pursuant to which the Warrants will be issued (the “Warrant
Agreement”), filed as Exhibit 4.4 to the Registration Statement; |
| (g) | a copy of the Certificate of Incorporation of the Company, certified by the Secretary of State of the
State of Delaware on January 28, 2021; |
| (h) | the Amended and Restated Certificate of Incorporation of the Company to be in effect immediately prior
to the consummation of the offering of the Units, a form of which is filed as Exhibit 3.2 to the Registration Statement (the “Second
Amended Certificate of Incorporation”); |
| (i) | a copy of the Bylaws of the Company as in effect on January 28, 2021, certified by the Secretary
of the Company; |
| (j) | a copy of Resolutions of the Board of Directors of the Company adopted on January 28, 2021, certified
by the Secretary of the Company; and |
| (k) | a copy of a certificate, dated the date hereof, of the Delaware Secretary of State, dated June 14,
2021, certifying the existence and good standing of the Company under the laws of the State of Delaware. |
We have relied, to the extent
we deem such reliance proper, upon such certificates or comparable documents of officers and representatives of the Company and of public
officials and upon statements and information furnished by officers and representatives of the Company with respect to the accuracy of
material factual matters contained therein which were not independently established by us. In rendering the opinions expressed below,
we have assumed, without independent investigation or verification of any kind, the genuineness of all signatures on documents we have
reviewed, the legal capacity and competency of all natural persons signing all such documents, the authenticity and completeness of all
documents submitted to us as originals, the conformity to authentic, complete original documents of all documents submitted to us as copies,
the truthfulness, completeness and correctness of all factual representations and statements contained in all documents we have reviewed,
the accuracy and completeness of all public records examined by us, and the accuracy of all statements in certificates of officers of
the Company that we reviewed.
Based upon the foregoing assumptions
and the assumptions set forth below, and subject to the qualifications and limitations stated herein, having considered such questions
of law as we have deemed necessary as a basis for the opinions expressed below, we are of the opinion that:
| 1. | When the Registration Statement becomes effective under the Securities Act and the Units have been issued
and delivered by the Company pursuant to the Underwriting Agreement against the payment of the consideration set forth in the Underwriting
Agreement, assuming the due authorization, execution and delivery of the Units by Continental Stock Transfer & Trust Company,
as transfer agent, the Units will constitute valid and binding obligations of the Company, enforceable against the Company in accordance
with their terms, subject to (i) applicable bankruptcy, insolvency, receivership, conservatorship, liquidation, reorganization, moratorium,
fraudulent transfer and other laws affecting the enforcement of creditors’ rights generally, and (ii) the application of general
principles of equity (whether applied by a court in equity or at law). |
| 2. | When the Registration Statement becomes effective under the Securities Act, the Amended Certificate of
Incorporation has been filed with the Secretary of State of the State of Delaware and the shares of Common Stock included in the Units
have been delivered by the Company pursuant to the Underwriting Agreement against the payment of the consideration set forth in the Underwriting
Agreement, the shares of Common Stock will be validly issued, fully paid and nonassessable. |
| 3. | When the Registration Statement becomes effective under the Securities Act and the Warrants included in
the Units have been delivered by the Company pursuant to the Underwriting Agreement against the payment of the consideration set forth
in the Underwriting Agreement, assuming the due authorization, execution and delivery of the Warrants by the Warrant Agent, the Warrants
will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject
to (i) applicable bankruptcy, insolvency, receivership, conservatorship, liquidation, reorganization, moratorium, fraudulent transfer
and other laws affecting the enforcement of creditors’ rights generally, and (ii) the application of general principles of
equity (whether applied by a court of law in equity or at law). |
| 4. | When the Underwriting Agreement and the Warrant Agreement have been duly executed and delivered by the
respective parties thereto and the Warrants have been duly executed by the Company and duly countersigned by the Warrant Agent in accordance
with the terms of the Warrant Agreement and delivered to and paid for by the Underwriters pursuant to the terms of the Underwriting Agreement,
the Common Stock issuable upon exercise of such Warrants will be duly authorized, validly issued, fully paid and non-assessable. |
The
opinions expressed above are limited to questions arising under the laws of the State of New York and the Delaware General Corporation
Law. We do not express any opinion as to the laws of any other jurisdiction.
This opinion letter is for
your benefit in connection with the Registration Statement and may be relied upon by you and by persons entitled to rely upon it pursuant
to the applicable provisions of the Securities Act. This opinion letter is provided solely in connection with the distribution of the
Units pursuant to the Registration Statement and is not to be relied upon for any other purpose.
The opinions expressed above
are as of the date hereof only, and we express no opinion as to, and assume no responsibility for, the effect of any fact or circumstance
occurring, or of which we learn, subsequent to the date of this opinion letter, including, without limitation, legislative and other changes
in the law or changes in circumstances affecting any party. We assume no responsibility to update this opinion letter for, or to advise
you of, any such facts or circumstances of which we become aware, regardless of whether or not they affect the opinions expressed in this
opinion letter.
We hereby consent to the filing
of this opinion letter as Exhibit 5.1 to the Registration Statement and to the reference to our firm as counsel for the Company that
has passed on the validity of the Units, Common Stock and Warrants appearing under the caption “Legal Matters” in the prospectus
forming part of the Registration Statement or any prospectus filed pursuant to Rule 424(b) with respect thereto. In giving this
consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities
Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ White & Case LLP
EMS:JYC:JML:TF
Exhibit 10.1
[●], 2021
AMCI Acquisition Corp. II
600 Steamboat Road
Greenwich, CT 06830
Re: Initial
Public Offering
Ladies and Gentlemen:
This letter (this “Letter
Agreement”) is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”)
entered into by and among AMCI Acquisition Corp. II, a Delaware corporation (the “Company”), and Evercore
Group L.L.C., as representative (the “Representative”) of the several underwriters (each, an “Underwriter”
and collectively, the “Underwriters”), relating to an underwritten initial public offering (the “Public
Offering”), of up to 17,250,000 of the Company’s units (including up to 2,250,000 units that may be purchased
to cover over-allotments, if any) (the “Units”), each comprised of one share of the Company’s Class A
common stock, par value $0.0001 per share (the “Class A Common Stock”), and one-half of one redeemable
warrant. Each whole warrant (each, a “Warrant”) entitles the holder thereof to purchase one share of Class A
Common Stock at a price of $11.50 per share, subject to adjustment as described in the Prospectus (as defined below). The Units will be
sold in the Public Offering pursuant to a registration statement on Form S-1 and prospectus (the “Prospectus”)
filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”) and the Company has
applied to have the Units listed on The Nasdaq Capital Market. Certain capitalized terms used herein are defined in paragraph 11 hereof.
In order to induce the Company
and the Underwriters to enter into the Underwriting Agreement and to proceed with the Public Offering and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, each of AMCI Sponsor II LLC (the “Sponsor”)
and the undersigned individuals, each of whom is a member of the Company’s board of directors and/or management team (each of the
undersigned individuals, an “Insider” and collectively, the “Insiders”), hereby
agrees with the Company as follows:
1. The
Sponsor and each Insider agrees that if the Company seeks stockholder approval of a proposed Business Combination, then in connection
with such proposed Business Combination, it, he or she shall (i) vote any shares of Common Stock (as defined below) owned by it,
him or her in favor of any proposed Business Combination and (ii) not redeem any shares of Common Stock owned by it, him or her in
connection with such stockholder approval. If the Company seeks to consummate a proposed Business Combination by engaging in a tender
offer, the Sponsor and each Insider agrees that it, he or she will not sell or tender any shares of Common Stock owned by it, him or her
in connection therewith.
2. The
Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within 24 months
from the closing of the Public Offering, or such later period approved by the Company’s stockholders in accordance with the Company’s
amended and restated certificate of incorporation (as it may be amended from time to time, the “Charter”),
the Sponsor and each Insider shall take all reasonable steps to cause the Company to (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the shares
of Class A Common Stock sold as part of the Units in the Public Offering (the “Offering Shares”),
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account (as defined below), including
interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable and up to $100,000 of interest to
pay dissolution expenses), divided by the number of then outstanding Offering Shares, which redemption will completely extinguish all
Public Stockholders’ (as defined below) rights as stockholders (including the right to receive further liquidating distributions,
if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining
stockholders and the Company’s board of directors, liquidate and dissolve, subject in each case to the Company’s obligations
under Delaware law to provide for claims of creditors and other requirements of applicable law. The Sponsor and each Insider agrees to
not propose any amendment to the Charter to modify the substance or timing of the Company’s obligation to redeem 100% of the Offering
Shares if the Company does not complete a Business Combination within the required time period set forth in the Charter or with respect
to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, unless the Company
provides its Public Stockholders with the opportunity to redeem their Offering Shares upon approval of any such amendment at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held
in the Trust Account and not previously released to the Company to pay its taxes, divided by the number of then outstanding Offering Shares.
The Sponsor and each Insider
acknowledges that it, he or she has no right, title, interest or claim of any kind in or to any monies held in the Trust Account or any
other asset of the Company as a result of any liquidation of the Company with respect to the Founder Shares held by it, him or her. The
Sponsor and each Insider hereby further waives, with respect to any shares of Common Stock held by it, him or her, if any, any redemption
rights it, he or she may have in connection with (A) the consummation of a Business Combination, including, without limitation, any
such rights available in the context of a stockholder vote to approve such Business Combination, or (B) a stockholder vote to approve
an amendment to the Charter to modify the substance or timing of the Company’s obligation to redeem 100% of the Offering Shares
if the Company has not consummated a Business Combination within the time period set forth in the Charter or with respect to any other
material provisions relating to stockholders’ rights or pre-initial business combination activity or in the context of a tender
offer made by the Company to purchase Offering Shares (although the Sponsor, the Insiders and their respective affiliates shall be entitled
to redemption and liquidation rights with respect to any Offering Shares it or they hold if the Company fails to consummate a Business
Combination within the time period set forth in the Charter).
3. During
the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, the Sponsor and each Insider
shall not, without the prior written consent of the Representative, (i) sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase
a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission
promulgated thereunder, with respect to, any Units, shares of Common Stock (including, but not limited to, Founder Shares), Warrants or
any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock owned by it, him or her, (ii) enter
into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any
Units, shares of Common Stock (including, but not limited to, Founder Shares), Warrants or any securities convertible into, or exercisable,
or exchangeable for, shares of Common Stock owned by it, him or her, whether any such transaction is to be settled by delivery of such
securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (i) or
(ii).
4. In
the event of the liquidation of the Trust Account upon the failure of the Company to consummate its initial Business Combination within
the time period set forth in the Charter, the Sponsor (the “Indemnitor”) agrees to indemnify and hold harmless
the Company against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all legal
or other expenses reasonably incurred in investigating, preparing or defending against any litigation, whether pending or threatened)
to which the Company may become subject as a result of any claim by (i) any third party for services rendered or products sold to
the Company or (ii) any prospective target business with which the Company has entered into a written letter of intent, confidentiality
or other similar agreement or Business Combination agreement (a “Target”); provided, however, that such
indemnification of the Company by the Indemnitor (x) shall apply only to the extent necessary to ensure that such claims by a third
party or a Target do not reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Offering Share and
(ii) the actual amount per Offering Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less
than $10.00 per Offering Share is then held in the Trust Account due to reductions in the value of the trust assets, less taxes payable,
(y) shall not apply to any claims by a third party or a Target which executed a waiver of any and all rights to the monies held in
the Trust Account (whether or not such waiver is enforceable) and (z) shall not apply to any claims under the Company’s indemnity
of the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. The Indemnitor shall
have the right to defend against any such claim with counsel of its choice reasonably satisfactory to the Company if, within 15 days following
written receipt of notice of the claim to the Indemnitor, the Indemnitor notifies the Company in writing that it shall undertake such
defense.
5. To
the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional 2,250,000 Units within 45
days from the date of the Prospectus (and as further described in the Prospectus), the Sponsor agrees to forfeit, at no cost, a number
of Founder Shares in the aggregate equal to 562,500 multiplied by a fraction, (i) the numerator of which is 2,250,000 minus the number
of Units purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 2,250,000.
The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the Underwriters so that the
Founder Shares will represent an aggregate of 20.0% of the Company’s issued and outstanding shares of Class A Common Stock
after the Public Offering (not including shares of Class A Common Stock underlying the Warrants or Private Placement Warrants (as
defined below)). The Sponsor further agrees that to the extent that the size of the Public Offering is increased or decreased, the Company
will purchase or sell Units or effect a share repurchase or share capitalization, as applicable, immediately prior to the consummation
of the Public Offering in such amount as to maintain the ownership of the initial shareholders prior to the Public Offering at 20.0% of
its issued and outstanding Capital Shares upon the consummation of the Public Offering. In connection with such increase or decrease in
the size of the Public Offering, then (A) the references to 2,250,000 in the numerator and denominator of the formula in the first
sentence of this paragraph shall be changed to a number equal to 15% of the number of Public Shares included in the Units issued in the
Public Offering and (B) the reference to 562,500 in the formula set forth in the first sentence of this paragraph shall be adjusted
to such number of Founder Shares that the Sponsor would have to surrender to the Company in order for the initial shareholders to hold
an aggregate of 20.0% of the Company’s issued and outstanding shares of Class A Common Stock after the Public Offering (not
including shares of Class A Common Stock underlying the Warrants or Private Placement Warrants).
6. The
Sponsor and each Insider hereby agrees and acknowledges that: (i) the Underwriters and the Company would be irreparably injured in
the event of a breach by such Sponsor or an Insider of its, his or her obligations under paragraphs 1, 2, 3, 4, 5, 7(a), and 7(b), as
applicable, of this Letter Agreement (ii) monetary damages may not be an adequate remedy for such breach and (iii) the non-breaching
party shall be entitled to injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the event
of such breach.
7. (a) The
Sponsor and each Insider agrees that it, he or she shall not Transfer any Founder Shares (or any shares of Class A Common Stock issuable
upon conversion thereof) until the earlier of (A) one year after the completion of the Company’s initial Business Combination
and (B) subsequent to the Business Combination, (x) if the closing price of the Class A Common Stock equals or exceeds
$12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days
within any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination or (y) the date
on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results
in all of the Company’s stockholders having the right to exchange their shares of Class A Common Stock for cash, securities
or other property (the “Founder Shares Lock-up Period”).
(b) The
Sponsor and each Insider agrees that it, he or she shall not Transfer any Private Placement Warrants (or any share of Class A Common
Stock issued or issuable upon the exercise of the Private Placement Warrants), until 30 days after the completion of a Business Combination
(the “Private Placement Warrants Lock-up Period”, together with the Founder Shares Lock-up Period, the “Lock-up
Periods”).
(c) Notwithstanding
the provisions set forth in paragraphs 7(a) and (b), Transfers of the Founder Shares, Private Placement Warrants and shares of Class A
Common Stock issued or issuable upon the exercise or conversion of the Private Placement Warrants or the Founder Shares that are held
by the Sponsor, any Insider or any of their permitted transferees (that have complied with this paragraph 7(c)), are permitted (a) to
the Company’s officers or directors, any affiliate or family member of any of the Company’s officers or directors, any affiliate
of the Sponsor or to any members of the Sponsor or any of their affiliates; (b) in the case of an individual, by gift to a member
of such individual’s immediate family or to a trust, the beneficiary of which is a member of such individual’s immediate family,
an affiliate of such individual or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and
distribution upon death of such individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by
private sales or transfers made in connection with any forward purchase agreement or similar arrangement or in connection with the consummation
of an initial Business Combination at prices no greater than the price at which the securities were originally purchased; (f) in
the event of the Company’s liquidation prior to the completion of an initial Business Combination; (g) by virtue of the laws
of the State of Delaware or the Sponsor’s limited liability company agreement upon dissolution of the Sponsor; or (h) in the
event of the Company’s liquidation, merger, capital stock exchange or other similar transaction which results in all of the Company’s
stockholders having the right to exchange their shares of Class A Common Stock for cash, securities or other property subsequent
to the Company’s completion of an initial Business Combination; provided, however, that in the case of clauses (a) through
(e) or (g), these permitted transferees must enter into a written agreement with the Company agreeing to be bound by the transfer
restrictions herein and the other restrictions contained in this Agreement (including provisions relating to voting, the Trust Account
and liquidating distributions).
8. The
Sponsor and each Insider represents and warrants that it, he or she has never been suspended or expelled from membership in any securities
or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked. Each Insider’s
biographical information furnished to the Company (including any such information included in the Prospectus) is true and accurate in
all respects and does not omit any material information with respect to the Insider’s background. The Sponsor and each Insider’s
questionnaire furnished to the Company is true and accurate in all respects. The Sponsor and each Insider represents and warrants that:
it, he or she is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation
to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction; it, he or she has never been
convicted of, or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of
funds of another person, or (iii) pertaining to any dealings in any securities and it, he or she is not currently a defendant in
any such criminal proceeding.
9. Except
as disclosed in the Prospectus, neither the Sponsor nor any officer, nor any affiliate of the Sponsor or any officer, nor any director
of the Company, shall receive from the Company any finder’s fee, reimbursement, consulting fee, non-cash payments, monies in respect
of any repayment of a loan or other compensation prior to, or in connection with any services rendered in order to effectuate, the consummation
of the Company’s initial Business Combination (regardless of the type of transaction that it is), other than the following, none
of which will be made from the proceeds held in the Trust Account prior to the completion of the initial Business Combination: repayment
of a loan and advances up to an aggregate of $300,000 made to the Company by the Sponsor; payments to the Sponsor for certain office space,
secretarial and administrative services as may be reasonably required by the Company of $10,000 per month; reimbursement for any reasonable
out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial Business Combination, and repayment
of loans, if any, and on such terms as to be determined by the Company from time to time, made by the Sponsor or an affiliate of the Sponsor
or any of the Company’s officers or directors to finance transaction costs in connection with an intended initial Business Combination,
provided, that, if the Company does not consummate an initial Business Combination, a portion of the working capital held outside the
Trust Account may be used by the Company to repay such loaned amounts so long as no proceeds from the Trust Account are used for such
repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender.
Such warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period.
10. The
Sponsor and each Insider has full right and power, without violating any agreement to which it is bound (including, without limitation,
any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Letter Agreement and, as applicable,
to serve as an officer and/or director on the board of directors of the Company and hereby consents to being named in the Prospectus as
an officer and/or director of the Company.
11. As
used herein, (i) “Business Combination” shall mean a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination, involving the Company and one or more businesses;
(ii) “Common Stock” shall mean the Class A common stock and Class B common stock;
(iii) “Founder Shares” shall mean the 4,312,500 shares of Class B common stock issued and
outstanding (up to 562,500 Shares of which are subject to complete or partial forfeiture if the over-allotment option is not
exercised by the Underwriters); (iv) “Initial Stockholders” shall mean the Sponsor and any Insider
that holds Founder Shares; (v) “Private Placement Warrants” shall mean the 3,500,000 Warrants (or
3,725,000 Warrants if the over-allotment option is exercised in full) that the Sponsor has agreed to purchase for an aggregate
purchase price of $3,500,000 (or 3,725,000 if the over-allotment option is exercised in full), or $1.00 per Warrant, in a private
placement that shall occur simultaneously with the consummation of the Public Offering; (vi) “Public
Stockholders” shall mean the holders of securities issued in the Public Offering; (vii) “Trust
Account” shall mean the trust fund into which a portion of the net proceeds of the Public Offering and the sale of the
Private Placement Warrants shall be deposited; (viii) “Transfer” shall mean the (a) sale of,
offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or
agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with
respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act, and the
rules and regulations of the Commission promulgated thereunder with respect to, any security, (b) entry into any swap or
other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security,
whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement
of any intention to effect any transaction specified in clause (a) or (b); and (ix) “Warrants”
shall mean the Private Placement Warrants and public warrants.
12. The
Company will maintain an insurance policy or policies providing directors’ and officers’ liability insurance, and each Director
shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for
any of the Company’s directors or officers.
13. This
Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and
supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they
relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement may not be changed, amended,
modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed
by all parties hereto.
14. No
party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the prior written
consent of the other parties. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate
to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding on the Sponsor and each
Insider and their respective successors, heirs and assigns and permitted transferees.
15. Nothing
in this Letter Agreement shall be construed to confer upon, or give to, any person or corporation other than the parties hereto any right,
remedy or claim under or by reason of this Letter Agreement or of any covenant, condition, stipulation, promise or agreement hereof. All
covenants, conditions, stipulations, promises and agreements contained in this Letter Agreement shall be for the sole and exclusive benefit
of the parties hereto and their successors, heirs, personal representatives and assigns and permitted transferees.
16. This
Letter Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
17. This
Letter Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of this Letter Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Letter Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
18. This
Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York. The parties hereto
(i) all agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this Letter Agreement shall
be brought and enforced in the courts of New York City, in the State of New York, and irrevocably submit to such jurisdiction and venue,
which jurisdiction and venue shall be exclusive and (ii) waive any objection to such exclusive jurisdiction and venue or that such
courts represent an inconvenient forum.
19. Any
notice, consent or request to be given in connection with any of the terms or provisions of this Letter Agreement shall be in writing
and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or
facsimile transmission.
20. This
Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Periods or (ii) the liquidation of the
Company; provided, however, that this Letter Agreement shall earlier terminate in the event that the Public Offering is not consummated
and closed by December 31, 2021; provided further that paragraph 4 of this Letter Agreement shall survive such liquidation.
[Signature Page Follows]
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Sincerely, |
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AMCI SPONSOR II LLC |
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By: |
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Name: |
Nimesh Patel |
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Title: |
Sole Managing Member |
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By: |
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Name: |
Adrian Paterson |
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AMCI Group, LLC Series 35 |
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By: |
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Name: |
Hans Mende |
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Title: |
Authorized Signatory |
| Acknowledged and Agreed: |
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AMCI ACQUISITION CORP. II |
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| By: |
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Name: |
Nimesh Patel |
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Title: |
Chief Executive Officer |
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Exhibit 10.2
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Investment Management
Trust Agreement (this “Agreement”) is made effective as of [●], 2021 by and between AMCI Acquisition
Corp. II, a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company,
a New York corporation (the “Trustee”).
WHEREAS, the Company’s
registration statement on Form S-1, File No. 333-253107 (the “Registration Statement”) and prospectus
(the “Prospectus”) for the initial public offering (the “Offering”) of the Company’s
units (the “Units”), each of which consists of one share of the Company’s Class A common stock, par
value $0.0001 per share (the “Common Stock”), and one-half of one redeemable warrant, has been declared
effective as of the date hereof by the U.S. Securities and Exchange Commission; and
WHEREAS, the Company has entered
into an Underwriting Agreement (the “Underwriting Agreement”) with Evercore Group L.L.C., as representative
(the “Representative”) of the several underwriters (the “Underwriters”) named therein;
and
WHEREAS, as described in the
Prospectus, $150,000,000 of the gross proceeds of the Offering and sale of the Private Placement Warrants (as defined in the Underwriting
Agreement) (or $172,500,000 if the Underwriters’ over-allotment option is exercised in full) will be delivered to the Trustee to
be deposited and held in a segregated trust account located at all times in the United States (the “Trust Account”)
for the benefit of the Company and the holders of the Common Stock included in the Units issued in the Offering as hereinafter provided
(the amount to be delivered to the Trustee (and any interest subsequently earned thereon) is referred to herein as the “Property,”
the stockholders for whose benefit the Trustee shall hold the Property will be referred to as the “Public Stockholders,”
and the Public Stockholders and the Company will be referred to together as the “Beneficiaries”);
WHEREAS, pursuant to the Underwriting
Agreement, a portion of the Property equal to $5,250,000, or $6,037,500 if the Underwriters’ over-allotment option is exercised
in full, is attributable to deferred underwriting discounts and commissions that will be payable by the Company to the Underwriters upon
and concurrently with the consummation of the Business Combination (as defined below) (the “Deferred Discount”);
and
WHEREAS, the Company and the
Trustee desire to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property.
NOW THEREFORE, IT IS
AGREED:
| 1. | Agreements and Covenants of Trustee. The Trustee hereby agrees and covenants to: |
(a) Hold
the Property in trust for the Beneficiaries in accordance with the terms of this Agreement in the Trust Account established by the Trustee
in the United States at J.P. Morgan Chase Bank, N.A. (or at another U.S. chartered commercial bank with consolidated assets of $100 billion
or more) in the United States, maintained by the Trustee and at a brokerage institution selected by the Trustee that is reasonably satisfactory
to the Company;
(b) Manage,
supervise and administer the Trust Account subject to the terms and conditions set forth herein;
(c) In
a timely manner, upon the written instruction of the Company, invest and reinvest the Property solely in United States government securities
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 185 days or less,
or in money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 promulgated
under the Investment Company Act of 1940, as amended (or any successor rule), which invest only in direct U.S. government treasury obligations,
as determined by the Company; it being understood that the Trust Account will earn no interest while account funds are uninvested awaiting
the Company’s instructions hereunder and the Trustee may earn bank credits or other consideration;
(d) Collect
and receive, when due, all interest or other income arising from the Property, which shall become part of the “Property,”
as such term is used herein;
(e) Promptly
notify the Company and the Representative of all communications received by the Trustee with respect to any Property requiring action
by the Company;
(f) Supply
any necessary information or documents as may be requested by the Company (or its authorized agents) in connection with the Company’s
preparation of the tax returns relating to assets held in the Trust Account;
(g) Participate
in any plan or proceeding for protecting or enforcing any right or interest arising from the Property if, as and when instructed by the
Company to do so;
(h) Render
to the Company monthly written statements of the activities of, and amounts in, the Trust Account reflecting all receipts and disbursements
of the Trust Account;
(i) Commence
liquidation of the Trust Account only after and promptly after (x) receipt of, and only in accordance with, the terms of a letter
from the Company (“Termination Letter”) in a form substantially similar to that attached hereto as either Exhibit A
or Exhibit B, as applicable, signed on behalf of the Company by its Chief Executive Officer, Chief Financial Officer, President,
Executive Vice President, Vice President, Secretary or Chairman of the board of directors of the Company (the “Board”)
or other authorized officer of the Company, and, in the case of Exhibit A, acknowledged and agreed to by the Representative, and
complete the liquidation of the Trust Account and distribute the Property in the Trust Account, including interest earned on the funds
held in the Trust Account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), only
as directed in the Termination Letter and the other documents referred to therein, or (y) upon the date which is, the later of (1) 24
months after the closing of the Offering and (2) such later date as may be approved by the Company’s stockholders in accordance
with the Company’s amended and restated certificate of incorporation if a Termination Letter has not been received by the Trustee
prior to such date, in which case the Trust Account shall be liquidated in accordance with the procedures set forth in the Termination
Letter attached as Exhibit B and the Property in the Trust Account, including interest earned on the funds held in the Trust
Account and not previously released to the Company to pay its taxes (less up to $100,000 of interest to pay dissolution expenses), shall
be distributed to the Public Stockholders of record as of such date;
(j) Upon
written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto as Exhibit C
(a “Tax Payment Withdrawal Instruction”), withdraw from the Trust Account and distribute to the Company
the amount of interest earned on the Property requested by the Company to cover any tax obligation owed by the Company as a result of
assets of the Company or interest or other income earned on the Property, which amount shall be delivered directly to the Company by electronic
funds transfer or other method of prompt payment, and the Company shall forward such payment to the relevant taxing authority, so long
as there is no reduction in the principal amount per share initially deposited in the Trust Account; provided, however,
that to the extent there is not sufficient cash in the Trust Account to pay such tax obligation, the Trustee shall liquidate such assets
held in the Trust Account as shall be designated by the Company in writing to make such distribution (it being acknowledged and agreed
that any such amount in excess of interest income earned on the Property shall not be payable from the Trust Account). The written request
of the Company referenced above shall constitute presumptive evidence that the Company is entitled to said funds, and the Trustee shall
have no responsibility to look beyond said request;
(k) Upon
written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto as Exhibit D
(a “Stockholder Redemption Withdrawal Instruction”), the Trustee shall distribute on behalf of the Company
the amount requested by the Company to be used to redeem shares of Common Stock from Public Stockholders properly submitted in connection
with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation to modify the
substance or timing of the Company’s obligation to redeem 100% of shares of Common Stock included in the Units sold in the Offering
(the ‘“public shares”) if the Company has not consummated an initial Business Combination within
such time as is described in the Company’s amended and restated certificate of incorporation or with respect to any other material
provisions relating to stockholders’ rights or pre-initial Business Combination activity. The written request of the Company referenced
above shall constitute presumptive evidence that the Company is entitled to distribute said funds, and the Trustee shall have no responsibility
to look beyond said request; and
(l) Not
make any withdrawals or distributions from the Trust Account other than pursuant to Sections 1(i), 1(j) or 1(k) above.
| 2. | Agreements and Covenants of the Company. The Company hereby agrees and covenants to: |
(a) Give
all instructions to the Trustee hereunder in writing, signed by the Company’s Chairman of the Board, Chief Executive Officer, Chief
Financial Officer, President, Executive Vice President, Vice President or Secretary. In addition, except with respect to its duties under
Sections 1(i), 1(j) and 1(k) hereof, the Trustee shall be entitled to rely on, and shall be protected in
relying on, any verbal or telephonic advice or instruction which it, in good faith and with reasonable care, believes to be given by any
one of the persons authorized above to give written instructions, provided that the Company shall promptly confirm such instructions in
writing;
(b) Subject
to Section 4 hereof, hold the Trustee harmless and indemnify the Trustee from and against any and all expenses, including
reasonable counsel fees and disbursements, or losses suffered by the Trustee in connection with any action taken by it hereunder and in
connection with any action, suit or other proceeding brought against the Trustee involving any claim, or in connection with any claim
or demand, which in any way arises out of or relates to this Agreement, the services of the Trustee hereunder, or the Property or any
interest earned on the Property, except for expenses and losses resulting from the Trustee’s gross negligence, fraud or willful
misconduct. Promptly after the receipt by the Trustee of notice of demand or claim or the commencement of any action, suit or proceeding,
pursuant to which the Trustee intends to seek indemnification under this Section 2(b), it shall notify the Company in writing
of such claim (hereinafter referred to as the “Indemnified Claim”). The Trustee shall have the right
to conduct and manage the defense against such Indemnified Claim; provided that the Trustee shall obtain the consent of the Company
with respect to the selection of counsel, which consent shall not be unreasonably withheld. The Trustee may not agree to settle any Indemnified
Claim without the prior written consent of the Company, which such consent shall not be unreasonably withheld. The Company may participate
in such action with its own counsel;
(c) Pay
the Trustee the fees set forth on Schedule A hereto, including an initial acceptance fee, annual administration fee, and transaction
processing fee which fees shall be subject to modification by the parties from time to time. It is expressly understood that the Property
shall not be used to pay such fees unless and until it is distributed to the Company pursuant to Sections 1(i) through 1(j) hereof.
The Company shall pay the Trustee the initial acceptance fee and the first annual administration fee at the consummation of the Offering.
The Company shall not be responsible for any other fees or charges of the Trustee except as set forth in this Section 2(c),
Schedule A and as may be provided in Section 2(b) hereof;
(d) In
connection with any vote of the Company’s stockholders regarding a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination involving the Company and one or more businesses (the “Business Combination”),
provide to the Trustee an affidavit or certificate of the inspector of elections for the stockholder meeting verifying the vote of such
stockholders regarding such Business Combination;
(e) Provide
the Representative with a copy of any Termination Letter(s) and/or any other correspondence that is sent to the Trustee with respect
to any proposed withdrawal from the Trust Account promptly after it issues the same;
(f) Unless
otherwise agreed between the Company and the Representative, ensure that any Instruction Letter (as defined in Exhibit A)
delivered in connection with a Termination Letter in the form of Exhibit A expressly provides that the Deferred Discount is
paid directly to the account or accounts directed by the Representative on behalf of the Underwriters prior to any transfer of the funds
held in the Trust Account to the Company or any other person;
(g) Instruct
the Trustee to make only those distributions that are permitted under this Agreement, and refrain from instructing the Trustee to make
any distributions that are not permitted under this Agreement; and
(h) Within
four (4) business days after the Underwriters exercise the over-allotment option (or any unexercised portion thereof) or such over-allotment
option expires, provide the Trustee with a notice in writing of the total amount of the Deferred Discount.
| 3. | Limitations of Liability. The Trustee shall have no responsibility or liability to: |
(a) Imply
obligations, perform duties, inquire or otherwise be subject to the provisions of any agreement or document other than this Agreement
and that which is expressly set forth herein;
(b) Take
any action with respect to the Property, other than as directed in Section 1 hereof, and the Trustee shall have no liability
to any third party except for liability arising out of the Trustee’s gross negligence, fraud or willful misconduct;
(c) Institute
any proceeding for the collection of any principal and income arising from, or institute, appear in or defend any proceeding of any kind
with respect to, any of the Property unless and until it shall have received instructions from the Company given as provided herein to
do so and the Company shall have advanced or guaranteed to it funds sufficient to pay any expenses incident thereto;
(d) Refund
any depreciation in principal of any Property;
(e) Assume
that the authority of any person designated by the Company to give instructions hereunder shall not be continuing unless provided otherwise
in such designation, or unless the Company shall have delivered a written revocation of such authority to the Trustee;
(f) The
other parties hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in
good faith and in the Trustee’s best judgment, except for the Trustee’s gross negligence, fraud or willful misconduct. The
Trustee may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel
(including counsel chosen by the Trustee, which counsel may be the Company’s counsel), statement, instrument, report or other paper
or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability
of any information therein contained) which the Trustee believes, in good faith and with reasonable care, to be genuine and to be signed
or presented by the proper person or persons. The Trustee shall not be bound by any notice or demand, or any waiver, modification, termination
or rescission of this Agreement or any of the terms hereof, unless evidenced by a written instrument delivered to the Trustee, signed
by the proper party or parties and, if the duties or rights of the Trustee are affected, unless it shall give its prior written consent
thereto;
(g) Verify
the accuracy of the information contained in the Registration Statement;
(h) Provide
any assurance that any Business Combination entered into by the Company or any other action taken by the Company is as contemplated by
the Registration Statement;
(i) File
information returns with respect to the Trust Account with any local, state or federal taxing authority or provide periodic written statements
to the Company documenting the taxes payable by the Company, if any, relating to any interest income earned on the Property;
(j) Prepare,
execute and file tax reports, income or other tax returns and pay any taxes with respect to any income generated by, and activities relating
to, the Trust Account, regardless of whether such tax is payable by the Trust Account or the Company, including, but not limited to, tax
obligations, except pursuant to Section 1(j) hereof; or
(k) Verify
calculations, qualify or otherwise approve the Company’s written requests for distributions pursuant to Sections 1(i), 1(j) or
1(k) hereof.
4. Trust
Account Waiver. The Trustee has no right of set-off or any right, title, interest or claim of any kind (“Claim”)
to, or to any monies in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account that it
may have now or in the future. In the event the Trustee has any Claim against the Company under this Agreement, including, without limitation,
under Section 2(b) or Section 2(c) hereof, the Trustee shall pursue such Claim solely against the Company
and its assets outside the Trust Account and not against the Property or any monies in the Trust Account.
5. Successor
Trustee. If the Trustee gives written notice to the Company that it desires to resign under this Agreement, the Company shall use
its reasonable efforts to locate a successor trustee, pending which the Trustee shall continue to act in accordance with this Agreement.
At such time that the Company notifies the Trustee that a successor trustee has been appointed and has agreed to become subject to the
terms of this Agreement, the Trustee shall transfer the management of the Trust Account to the successor trustee, including but not limited
to the transfer of copies of the reports and statements relating to the Trust Account, whereupon the Trustee’s rights and obligations
under this Agreement shall cease; provided, however, that in the event that the Company does not locate a successor trustee
within ninety (90) days of receipt of the resignation notice from the Trustee, the Trustee may submit an application to have the Property
deposited with any court in the State of New York or with the United States District Court for the Southern District of New York and upon
such deposit, the Trustee shall be immune from any liability whatsoever; or
6. Termination.
This Agreement shall terminate at such time that the Trustee has completed the liquidation of the Trust Account and its obligations in
accordance with the provisions of Section 1(i) hereof and distributed the Property in accordance with the provisions
of the Termination Letter, this Agreement shall terminate except with respect to Section 2(b).
7.
Miscellaneous.
(a) The
Company and the Trustee each acknowledge that the Trustee will follow the security procedures set forth below with respect to funds transferred
from the Trust Account. The Company and the Trustee will each restrict access to confidential information relating to such security procedures
to authorized persons. Each party must notify the other party immediately if it has reason to believe unauthorized persons may have obtained
access to such confidential information, or of any change in its authorized personnel. In executing funds transfers, the Trustee shall
rely upon all information supplied to it by the Company, including, account names, account numbers, and all other identifying information
relating to a Beneficiary, Beneficiary’s bank or intermediary bank. Except for any liability arising out of the Trustee’s
gross negligence, fraud or willful misconduct, the Trustee shall not be liable for any loss, liability or expense resulting from any error
in the information or transmission of the funds.
(b) This
Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute
one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or electronic transmission shall constitute
valid and sufficient delivery thereof.
(c) This
Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter hereof. Subject to
Section 7(d) hereof, this Agreement or any provision hereof may only be changed, amended or modified (other than to
correct a typographical error) by a writing signed by each of the parties hereto.
(d) This
Agreement or any provision hereof may only be changed, amended or modified pursuant to Section 7(c) hereof with the Consent
of the Stockholders. For purposes of this Section 7(d), the “Consent of the Stockholders” means receipt by the
Trustee of a certificate from the inspector of elections of the stockholder meeting certifying that the Company’s stockholders of
record as of a record date established in accordance with Section 213(a) of the Delaware General Corporation Law, as amended
(“DGCL”) (or any successor rule), who hold sixty-five percent (65%) or more of all then outstanding shares of the Common Stock
and Class B common stock, par value $0.0001 per share, of the Company voting together as a single class, have voted in favor of such
change, amendment or modification. No such amendment will affect any Public Stockholder who has otherwise indicated his election to redeem
his shares of Common Stock in connection with a stockholder vote sought to amend this Agreement to modify the substance or timing of the
Company’s obligation to redeem 100% of the Common Stock if the Company does not complete its initial Business Combination within
the time frame specified in the Company’s amended and restated certificate of incorporation. Except for any liability arising out
of the Trustee’s gross negligence, fraud or willful misconduct, the Trustee may rely conclusively on the certification from the
inspector or elections referenced above and shall be relieved of all liability to any party for executing the proposed amendment in reliance
thereon.
(e) The
parties hereto consent to the jurisdiction and venue of any state or federal court located in the City of New York, State of New York,
for purposes of resolving any disputes hereunder. AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING TO THIS AGREEMENT,
EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY.
(f) Any
notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing and shall
be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or by electronic
mail:
if to the Trustee, to:
Continental Stock Transfer &
Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf & Celeste
Gonzalez
Email: fwolf@continentalstock.com
Email: cgonzalez@continentalstock.com
if to the Company, to:
AMCI Acquisition Corp. II
600 Steamboat Road
Greenwich, CT 06830
Attn: Nimesh Patel
in each case, with copies to:
White & Case LLP
1221 Avenue of the Americas
New York, New York 10020
Attn: Elliott M. Smith
Email: elliott.smith@whitecase.com
and
Evercore Group L.L.C.
55 East 52nd Street, 35th Floor
New York, New York 10055
Attn.: Neil Shah
Email: Neil.Shah@evercore.com
and
Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, NY 10019
Attn.: Andrew J. Pitts and Nicholas A.
Dorsey
Email: APitts@cravath.com and NDorsey@cravath.com
(g) Each
of the Company and the Trustee hereby represents that it has the full right and power and has been duly authorized to enter into this
Agreement and to perform its respective obligations as contemplated hereunder. The Trustee acknowledges and agrees that it shall not make
any claims or proceed against the Trust Account, including by way of set-off, and shall not be entitled to any funds in the Trust Account
under any circumstance.
(h) This
Agreement is the joint product of the Trustee and the Company and each provision hereof has been subject to the mutual consultation, negotiation
and agreement of such parties and shall not be construed for or against any party hereto.
(i) Each
of the Company and the Trustee hereby acknowledges and agrees that the Representative on behalf of the Underwriters are third- party beneficiaries
of this Agreement.
(j) Except
as specified herein, no party to this Agreement may assign its rights or delegate its obligations hereunder to any other person or entity.
[Signature Page Follows]
IN
WITNESS WHEREOF, the parties have duly executed this Investment Management Trust Agreement as of the date first written above.
| | CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Trustee |
| | | |
| | | |
| By: | |
| | | Name: |
| | | Title: |
| | AMCI ACQUISITION CORP. II |
| | | |
| | | |
| By: | |
| | | Name: Nimesh Patel |
| | | Title: Chief Executive Officer |
[Signature Page to Investment Management Trust Agreement]
SCHEDULE A
| Fee Item | |
Time and method of payment | |
Amount | |
| Initial set-up fee. | |
Initial closing of Offering by wire transfer. | |
$ | 3,500.00 | |
| Trustee administration fee | |
Payable annually. First year fee payable, at initial closing of Offering by wire transfer, thereafter by wire transfer or check. | |
$ | 10,000.00 | |
| Transaction processing fee for disbursements to Company under Sections 1 and 2 | |
Billed to Company following disbursement made to Company under Section 1 and 2 | |
$ | 250.00 | |
| Paying Agent services as required pursuant to Section 1(i) and 1(k) | |
Billed to Company upon delivery of service pursuant to Section 1(i) and 1(k) | |
| Prevailing rates | |
EXHIBIT A
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf & Celeste Gonzalez
Re: Trust Account –
Termination Letter
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(i) of
the Investment Management Trust Agreement between AMCI Acquisition Corp. II (the “Company”) and Continental
Stock Transfer & Trust Company (“Trustee”), dated as of , 2021 (the “Trust Agreement”),
this is to advise you that the Company has entered into an agreement with (the “Target Business”) to consummate
a business combination with Target Business (the “Business Combination”) on or about [insert date]. The
Company shall notify you at least seventy-two (72) hours in advance of the actual date (or such shorter period as you may agree) of the
consummation of the Business Combination (the “Consummation Date”). Capitalized terms used but not defined
herein shall have the meanings set forth in the Trust Agreement.
In accordance with the terms
of the Trust Agreement, we hereby authorize you to commence to liquidate all of the assets of the Trust Account and to transfer the proceeds
to a segregated account held by you on behalf of the Beneficiaries to the effect that, on the Consummation Date, all of the funds held
in the Trust Operating Account at [JPMorgan Chase Bank, N.A.] will be immediately available for transfer to the account or accounts that
the Company shall direct on the Consummation Date (including as directed to it by the Representative on behalf of the Underwriters (with
respect to the Deferred Discount)).
On the Consummation Date (i) counsel
for the Company shall deliver to you written notification that the Business Combination has been consummated, or will be consummated concurrently
with your transfer of funds to the accounts as directed by the Company (the “Notification”), and (ii) the
Company shall deliver to you (a) a certificate by the Chief Executive Officer or Chief Financial Officer, which verifies that the
Business Combination has been approved by a vote of the Company’s stockholders, if a vote is held and (b) a joint written instruction
signed by the Company and the Representative with respect to the transfer of the funds held in the Trust Account, including payment of
amounts owed to public stockholders who have properly exercised their redemption rights and payment of the Deferred Discount directly
to the account or accounts directed by the Representative from the Trust Account (the “Instruction Letter”).
You are hereby directed and authorized to transfer the funds held in the Trust Account immediately upon your receipt of the Notification
and the Instruction Letter, in accordance with the terms of the Instruction Letter. In the event that certain deposits held in the Trust
Account may not be liquidated by the Consummation Date without penalty, you will notify the Company in writing of the same and the Company
shall direct you as to whether such funds should remain in the Trust Account and be distributed after the Consummation Date to the Company.
Upon the distribution of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the
Trust Account, your obligations under the Trust Agreement shall be terminated.
In the event that the Business
Combination is not consummated on the Consummation Date described in the notice thereof and we have not notified you on or before the
original Consummation Date of a new Consummation Date, then upon receipt by the Trustee of written instructions from the Company, the
funds held in the Trust Account shall be reinvested as provided in Section 1(c) of the Trust Agreement on the business
day immediately following the Consummation Date as set forth in such notice as soon thereafter as possible.
| | Very truly yours, |
| | |
| | AMCI Acquisition Corp. II |
| | | |
| | | |
| By: | |
| | | Name: |
| | | Title: |
| Agreed and acknowledged by: |
|
| |
|
| Evercore Group L.L.C. |
|
| | |
|
| | |
|
| By: | |
|
| | Name: |
|
| | Title: |
|
EXHIBIT B
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf & Celeste Gonzalez
Re: Trust Account –
Termination Letter
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(i) of
the Investment Management Trust Agreement between AMCI Acquisition Corp. II (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of , 2021 (the “Trust Agreement”),
this is to advise you that the Company has been unable to effect a business combination with a Target Business (the “Business
Combination”) within the time frame specified in the Company’s Amended and Restated Certificate of Incorporation,
as described in the Company’s Prospectus relating to the Offering. Capitalized terms used but not defined herein shall have the
meanings set forth in the Trust Agreement.
In accordance with the terms
of the Trust Agreement, we hereby authorize you to liquidate all of the assets in the Trust Operating Account and to transfer the total
proceeds into a segregated account held by you on behalf of the Beneficiaries to await distribution to the Public Stockholders. The Company
has selected1 as the effective date for the purpose of determining when the Public Stockholders will be entitled to receive
their share of the liquidation proceeds. You agree to be the Paying Agent of record and, in your separate capacity as Paying Agent, agree
to distribute said funds directly to the Company’s Public Stockholders in accordance with the terms of the Trust Agreement and the
Amended and Restated Certificate of Incorporation of the Company. Upon the distribution of all the funds, net of any payments necessary
for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement shall be terminated,
except to the extent otherwise provided in Section 1(i) of the Trust Agreement.
| | Very truly yours, |
| | |
| | AMCI Acquisition Corp. II |
| | | |
| | | |
| By: | |
| | | Name: |
| | | Title: |
cc: Evercore Group L.L.C.
| 1 | 24 months from the closing of the Offering or such later date
as may be approved by the Company’s stockholders in accordance with the Company’s amended and restated certificate of incorporation. |
EXHIBIT C
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf & Celeste Gonzalez
Re: Trust Account –
Tax Payment Withdrawal Instruction
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(j) of
the Investment Management Trust Agreement between AMCI Acquisition Corp. II (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of , 2021 (the “Trust Agreement”),
the Company hereby requests that you deliver to the Company $ of the interest income earned on the Property as of the date hereof. Capitalized
terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
The Company needs such funds
to pay for the tax obligations as set forth on the attached tax return or tax statement. In accordance with the terms of the Trust Agreement,
you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the Company’s
operating account at:
[WIRE INSTRUCTION INFORMATION]
| | Very truly yours, |
| | |
| | AMCI Acquisition Corp. II |
| | | |
| | | |
| By: | |
| | | Name: |
| | | Title: |
cc: Evercore Group L.L.C.
EXHIBIT D
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf & Celeste Gonzalez
Re: Trust Account –
Stockholder Redemption Withdrawal Instruction
Dear Mr. Wolf and Gonzalez:
Pursuant to Section 1(k) of
the Investment Management Trust Agreement between AMCI Acquisition Corp. II (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of , 2021 (the “Trust Agreement”),
the Company hereby requests that you deliver to the redeeming Public Stockholders of the Company $ of the principal and interest income
earned on the Property as of the date hereof to a segregated account held by you on behalf of the Beneficiaries. Capitalized terms used
but not defined herein shall have the meanings set forth in the Trust Agreement.
The Company needs such funds
to pay its Public Stockholders who have properly elected to have their shares of Common Stock redeemed by the Company in connection with
a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation to modify the substance
or timing of the Company’s obligation to redeem 100% of public shares of Common Stock if the Company has not consummated an initial
Business Combination within such time as is described in the Company’s amended and restated certificate of incorporation or with
respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity. As such,
you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to a segregated
account held by you on behalf of the Beneficiaries.
| | Very truly yours, |
| | |
| | AMCI Acquisition Corp. II |
| | | |
| | | |
| By: | |
| | | Name: |
| | | Title: |
cc: Evercore Group L.L.C.
Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of [●], 2021, is made and entered into by and
among AMCI Acquisition Corp. II, a Delaware corporation (the “Company”), AMCI Sponsor II LLC, a Delaware
limited liability company (the “Sponsor”) and the undersigned parties listed on the signature page hereto
under “Holders” (each such party, together with the Sponsor and any person or entity who hereafter becomes a party to this
Agreement pursuant to Section 5.2 of this Agreement, a “Holder” and collectively the “Holders”).
RECITALS
WHEREAS,
the Company has 4,312,500 shares of Class B common stock, par value $0.0001 per share (the “Founder Shares”),
issued and outstanding, up to 562,500 of which will be forfeited to the Company for no consideration depending on the extent to which
the underwriters of the Company’s initial public offering exercise their over-allotment option;
WHEREAS,
the Founder Shares are convertible into shares of the Company’s Class A common stock, par value $0.0001 per share (the “Common
Stock”), on the terms and conditions provided in the Company’s amended and restated certificate of incorporation;
WHEREAS,
on [●], 2021, the Company and the Sponsor entered into that certain Private Placement Warrants Purchase Agreement (the
“Private Placement Warrants Purchase Agreement”), pursuant to which the Sponsor agreed to purchase 3,500,000
private placement warrants (or up to 3,725,000 warrants to the extent that the over-allotment option in connection with the Company’s
initial public offering is exercised) (the “Private Placement Warrants”) in a private placement transaction
occurring simultaneously with the closing of the Company’s initial public offering;
WHEREAS,
in order to finance the Company’s transaction costs in connection with its search for and consummation of an initial Business Combination
(as defined below), the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may loan to the
Company funds as the Company may require, of which up to $1,500,000 of such loans may be convertible into private placement-equivalent
warrants (“Working Capital Warrants”) at a price of $1.00 per warrant at the option of the lender; and
WHEREAS,
the Company and the Holders desire to enter into this Agreement, pursuant to which the Company shall grant the Holders certain registration
rights with respect to certain securities of the Company, as set forth in this Agreement.
NOW,
THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
Article I
DEFINITIONS
Section 1.1 Definitions.
The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth
below:
“Adverse
Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith
judgment of the Chief Executive Officer or principal financial officer of the Company, after consultation with counsel to the Company,
(i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement
or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were
made) not misleading, (ii) would not be required to be made at such time if the Registration Statement were not being filed, and
(iii) the Company has a bona fide business purpose for not making such information public.
“Agreement”
shall have the meaning given in the Preamble.
“Board”
shall mean the Board of Directors of the Company.
“Business
Combination” shall mean any merger, capital stock exchange, asset acquisition, stock purchase, reorganization or
other similar business combination with one or more businesses, involving the Company.
“Commission”
shall mean the Securities and Exchange Commission.
“Common
Stock” shall have the meaning given in the Recitals hereto.
“Company”
shall have the meaning given in the Preamble.
“Demand
Registration” shall have the meaning given in subsection 2.1.1.
“Demanding
Holder” shall have the meaning given in subsection 2.1.1.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Form S-1”
shall have the meaning given in subsection 2.1.1.
“Form S-3”
shall have the meaning given in subsection 2.3.
“Founder Shares”
shall have the meaning given in the Recitals hereto and shall be deemed to include the shares of Common Stock issuable upon conversion
thereof.
“Founder
Shares Lock-up Period” shall mean, with respect to the Founder Shares, the period ending on the earlier of (A) one
year after the completion of the Company’s initial Business Combination and (B) subsequent to the Business Combination, (x) if
the closing price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s
initial Business Combination or (y) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization
or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of Common
Stock for cash, securities or other property.
“Holders”
shall have the meaning given in the Preamble.
“Insider
Letter” shall mean that certain letter agreement, dated as of [●], 2021, by and among the Company,
the Sponsor and each of the Company’s officers, directors and director nominees.
“Maximum
Number of Securities” shall have the meaning given in subsection 2.1.4.
“Misstatement”
shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration
Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the light of the circumstances
under which they were made) not misleading.
“Permitted
Transferees” shall mean any person or entity to whom a Holder of Registrable Securities is permitted to transfer
such Registrable Securities prior to the expiration of the Founder Shares Lock-up Period, Private Placement Lock-up Period or any other
lock-up period, as the case may be, under the Insider Letter, the Private Placement Warrants Purchase Agreement, this Agreement and any
other applicable agreement between such Holder and the Company, and to any transferee thereafter.
“Piggyback
Registration” shall have the meaning given in subsection 2.2.1.
“Private
Placement Lock-up Period” shall mean, with respect to Private Placement Warrants that are held by the initial purchasers
of such Private Placement Warrants or their Permitted Transferees, the Private Placement Warrants and shares of Common Stock issuable
upon the exercise or conversion of the Private Placement Warrants, and that are held by the initial purchasers of the Private Placement
Warrants or their Permitted Transferees, the period ending 30 days after the completion of the Company’s initial Business Combination.
“Private
Placement Warrants” shall have the meaning given in the Recitals hereto.
“Private
Placement Warrants Purchase Agreement” shall have the meaning given in the Recitals hereto.
“Pro
Rata” shall have the meaning given in subsection 2.1.4.
“Prospectus”
shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended
by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable
Security” shall mean (a) the Founder Shares and the shares of Common Stock issued or issuable upon the conversion
of the Founder Shares, (b) the Private Placement Warrants (including any shares of Common Stock issued or issuable upon the exercise
of the Private Placement Warrants), (c) any outstanding shares of Common Stock or any other equity security (including the shares
of Common Stock issued or issuable upon the exercise of any other equity security) of the Company held by a Holder as of the date of
this Agreement or acquired by a Holder prior to the consummation of the Business Combination, (d) any equity securities (including
the shares of Common Stock issued or issuable upon the exercise of any such equity security) of the Company issuable upon conversion
of any working capital loans in an amount up to $1,500,000 made to the Company by a Holder (including the Working Capital Warrants and
shares of Common Stock issued or issuable upon the exercise of the Working Capital Warrants) and (e) any other equity security of
the Company issued or issuable with respect to any such share of Common Stock by way of a stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or reorganization; provided, however, that, as to
any particular Registrable Security, such securities shall cease to be Registrable Securities when: (A) a Registration Statement
with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been
sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (B) such securities shall have been
otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered
by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such
securities shall have ceased to be outstanding; (D) such securities may be sold without registration pursuant to Rule 144 promulgated
under the Securities Act (or any successor rule promulgated thereafter by the Commission) (but with no volume or other restrictions
or limitations); or (E) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution
or other public securities transaction.
“Registration”
shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements
of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming
effective.
“Registration
Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:
(a) all
registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.)
and any securities exchange on which the Common Stock is then listed;
(b) fees
and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters
in connection with blue sky qualifications of Registrable Securities);
(c) printing,
messenger, telephone and delivery expenses;
(d) reasonable
fees and disbursements of counsel for the Company;
(e) reasonable
fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such
Registration; and
(f) reasonable
fees and expenses of one (1) legal counsel selected by the majority-in-interest of the Demanding Holders initiating a Demand Registration
to be registered for offer and sale in the applicable Registration.
“Registration
Statement” shall mean any registration statement that covers the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments)
and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Requesting
Holder” shall have the meaning given in subsection 2.1.1.
“Securities
Act” shall mean the Securities Act of 1933, as amended from time to time.
“Sponsor”
shall have the meaning given in the Recitals hereto.
“Underwriter”
shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part
of such dealer’s market-making activities.
“Underwritten
Registration” or “Underwritten Offering” shall mean a Registration in which securities
of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
“Working
Capital Warrants” shall have the meaning given in the Recitals hereto.
Article II
REGISTRATIONS
Section 2.1 Demand
Registration.
2.1.1 Request
for Registration. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, at any time and from time to
time on or after the date the Company consummates the Business Combination, the Holders of at least fifteen percent (15%) of the then-outstanding
number of Registrable Securities (the “Demanding Holders”) may make a written demand for Registration of all
or part of their Registrable Securities, which written demand shall describe the amount and type of securities to be included in such
Registration and the intended method(s) of distribution thereof (such written demand a “Demand Registration”).
The Company shall, within ten (10) days of the Company’s receipt of the Demand Registration, notify, in writing, all other
Holders of Registrable Securities of such demand, and each Holder of Registrable Securities who thereafter wishes to include all or a
portion of such Holder’s Registrable Securities in a Registration pursuant to a Demand Registration (each such Holder that includes
all or a portion of such Holder’s Registrable Securities in such Registration, a “Requesting Holder”)
shall so notify the Company, in writing, within five (5) days after the receipt by the Holder of the notice from the Company. Upon
receipt by the Company of any such written notification from a Requesting Holder(s) to the Company, such Requesting Holder(s) shall
be entitled to have their Registrable Securities included in a Registration pursuant to a Demand Registration and the Company shall effect,
as soon thereafter as practicable, but not more than forty five (45) days immediately after the Company’s receipt of the Demand
Registration, the Registration of all Registrable Securities requested by the Demanding Holders and Requesting Holders pursuant to such
Demand Registration. Under no circumstances shall the Company be obligated to effect more than an aggregate of three (3) Registrations
pursuant to a Demand Registration under this subsection 2.1.1 with respect to any or all Registrable Securities; provided,
however, that a Registration shall not be counted for such purposes unless a Form S-1 or any similar long-form registration
statement that may be available at such time (“Form S-1”) has become effective and all of the Registrable
Securities requested by the Requesting Holders to be registered on behalf of the Requesting Holders in such Form S-1 Registration
have been sold, in accordance with Section 3.1 of this Agreement.
2.1.2 Effective
Registration. Notwithstanding the provisions of subsection 2.1.1 above or any other part of this Agreement, a Registration
pursuant to a Demand Registration shall not count as a Registration unless and until (i) the Registration Statement filed with the
Commission with respect to a Registration pursuant to a Demand Registration has been declared effective by the Commission and (ii) the
Company has complied with all of its obligations under this Agreement with respect thereto; provided, further, that if,
after such Registration Statement has been declared effective, an offering of Registrable Securities in a Registration pursuant to a
Demand Registration is subsequently interfered with by any stop order or injunction of the Commission, federal or state court or any
other governmental agency the Registration Statement with respect to such Registration shall be deemed not to have been declared effective,
unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-
interest of the Demanding Holders initiating such Demand Registration thereafter affirmatively elect to continue with such Registration
and accordingly notify the Company in writing, but in no event later than five (5) days, of such election; and provided,
further, that the Company shall not be obligated or required to file another Registration Statement until the Registration Statement
that has been previously filed with respect to a Registration pursuant to a Demand Registration becomes effective or is subsequently
terminated.
2.1.3 Underwritten
Offering. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, if a majority-in-interest of the
Demanding Holders so advise the Company as part of their Demand Registration that the offering of the Registrable Securities pursuant
to such Demand Registration shall be in the form of an Underwritten Offering, then the right of such Demanding Holder or Requesting Holder
(if any) to include its Registrable Securities in such Registration shall be conditioned upon such Holder’s participation in such
Underwritten Offering and the inclusion of such Holder’s Registrable Securities in such Underwritten Offering to the extent provided
herein. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection
2.1.3 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering
by the majority-in-interest of the Demanding Holders initiating the Demand Registration.
2.1.4 Reduction
of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Registration pursuant to a Demand Registration,
in good faith, advises the Company, the Demanding Holders and the Requesting Holders (if any) in writing that the dollar amount or number
of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other
Common Stock or other equity securities that the Company desires to sell and the Common Stock, if any, as to which a Registration has
been requested pursuant to separate written contractual piggy-back registration rights held by any other stockholders who desire to sell,
exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely
affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum
dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”),
then the Company shall include in such Underwritten Offering, as follows: (i) first, the Registrable Securities of the Demanding
Holders and the Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities that each Demanding Holder
and Requesting Holder (if any) has requested be included in such Underwritten Registration and the aggregate number of Registrable Securities
that the Demanding Holders and Requesting Holders have requested be included in such Underwritten Registration (such proportion is referred
to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Securities; (ii) second,
to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of
Holders (Pro Rata, based on the respective number of Registrable Securities that each Holder has so requested) exercising their rights
to register their Registrable Securities pursuant to subsection 2.2.1 hereof, without exceeding the Maximum Number of Securities;
and (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and
(ii), the Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number
of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses
(i), (ii) and (iii), the Common Stock or other equity securities of other persons or entities that the Company is obligated to register
in a Registration pursuant to separate written contractual arrangements with such persons and that can be sold without exceeding the
Maximum Number of Securities.
2.1.5 Demand
Registration Withdrawal. A majority-in-interest of the Demanding Holders initiating a Demand Registration or a majority-in- interest
of the Requesting Holders (if any), pursuant to a Registration under subsection 2.1.1 shall have the right to withdraw from a
Registration pursuant to such Demand Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter
or Underwriters (if any) of their intention to withdraw from such Registration prior to the effectiveness of the Registration Statement
filed with the Commission with respect to the Registration of their Registrable Securities pursuant to such Demand Registration. Notwithstanding
anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with
a Registration pursuant to a Demand Registration prior to its withdrawal under this subsection 2.1.5.
Section 2.2 Piggyback
Registration.
2.2.1 Piggyback
Rights. If, at any time on or after the date the Company consummates a Business Combination, the Company proposes to file a Registration
Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or
exchangeable for, or convertible into equity securities, for its own account or for the account of stockholders of the Company (or by
the Company and by the stockholders of the Company including, without limitation, pursuant to Section 2.1 hereof), other
than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange
offer or offering of securities solely to the Company’s existing stockholders, (iii) for an offering of debt that is convertible
into equity securities of the Company or (iv) for a dividend reinvestment plan, then the Company shall give written notice of such
proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) days before the
anticipated filing date of such Registration Statement, which notice shall (A) describe the amount and type of securities to be
included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters,
if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to register the sale of
such number of Registrable Securities as such Holders may request in writing within five (5) days after receipt of such written
notice (such Registration a “Piggyback Registration”). The Company shall, in good faith, cause such
Registrable Securities to be included in such Piggyback Registration and shall use its best efforts to cause the managing Underwriter
or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this subsection
2.2.1 to be included in a Piggyback Registration on the same terms and conditions as any similar securities of the Company included
in such Registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of
distribution thereof. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this
subsection 2.2.1 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten
Offering by the Company.
2.2.2 Reduction
of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Registration that is to be a Piggyback
Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration
in writing that the dollar amount or number of the shares of Common Stock that the Company desires to sell, taken together with (i) the
shares of Common Stock, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with
persons or entities other than the Holders of Registrable Securities hereunder (ii) the Registrable Securities as to which registration
has been requested pursuant to Section 2.2 hereof, and (iii) the shares of Common Stock, if any, as to which Registration
has been requested pursuant to separate written contractual piggy-back registration rights of other stockholders of the Company, exceeds
the Maximum Number of Securities, then:
(a) If
the Registration is undertaken for the Company’s account, the Company shall include in any such Registration (A) first, the
Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities;
(B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable
Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof (pro
rata based on the respective number of Registrable Securities that such Holder has requested be included in such Registration), which
can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities
has not been reached under the foregoing clauses (A) and (B), the Common Stock, if any, as to which Registration has been requested
pursuant to written contractual piggy-back registration rights of other stockholders of the Company, which can be sold without exceeding
the Maximum Number of Securities;
(b) If
the Registration is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company shall
include in any such Registration (A) first, the Common Stock or other equity securities, if any, of such requesting persons or entities,
other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (B) second,
to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of
Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1, pro rata based on the number
of Registrable Securities that each Holder has requested be included in such Registration and the aggregate number of Registrable Securities
that the Holders have requested to be included in such Registration, which can be sold without exceeding the Maximum Number of Securities;
(C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B),
the Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number
of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses
(A), (B) and (C), the Common Stock or other equity securities for the account of other persons or entities that the Company is obligated
to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding
the Maximum Number of Securities.
2.2.3 Piggyback
Registration Withdrawal. Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration for
any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its
intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement filed with the Commission
with respect to such Piggyback Registration. The Company (whether on its own good faith determination or as the result of a request for
withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission
in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything
to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback
Registration prior to its withdrawal under this subsection 2.2.3.
2.2.4 Unlimited
Piggyback Registration Rights. For purposes of clarity, any Registration effected pursuant to Section 2.2 hereof shall
not be counted as a Registration pursuant to a Demand Registration effected under Section 2.1 hereof.
Section 2.3 Registrations
on Form S-3. The Holders of Registrable Securities may at any time, and from time to time, request in writing that the Company,
pursuant to Rule 415 under the Securities Act (or any successor rule promulgated thereafter by the Commission), register the
resale of any or all of their Registrable Securities on Form S-3 or any similar short form registration statement that may be available
at such time (“Form S-3”); provided, however, that the Company shall not be obligated
to effect such request through an Underwritten Offering. Within five (5) days of the Company’s receipt of a written request
from a Holder or Holders of Registrable Securities for a Registration on Form S-3, the Company shall promptly give written notice
of the proposed Registration on Form S-3 to all other Holders of Registrable Securities, and each Holder of Registrable Securities
who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in such Registration on Form S-3
shall so notify the Company, in writing, within ten (10) days after the receipt by the Holder of the notice from the Company. As
soon as practicable thereafter, but not more than twelve (12) days after the Company’s initial receipt of such written request
for a Registration on Form S-3, the Company shall register all or such portion of such Holder’s Registrable Securities as
are specified in such written request, together with all or such portion of Registrable Securities of any other Holder or Holders joining
in such request as are specified in the written notification given by such Holder or Holders; provided, however, that the
Company shall not be obligated to effect any such Registration pursuant to Section 2.3 hereof if (i) a Form S-3
is not available for such offering; or (ii) the Holders of Registrable Securities, together with the Holders of any other equity
securities of the Company entitled to inclusion in such Registration, propose to sell the Registrable Securities and such other equity
securities (if any) at any aggregate price to the public of less than $10,000,000.
Section 2.4 Restrictions
on Registration Rights. If (A) during the period starting with the date sixty (60) days prior to the Company’s good faith
estimate of the date of the filing of, and ending on a date one hundred and twenty (120) days after the effective date of, a Company
initiated Registration and provided that the Company has delivered written notice to the Holders prior to receipt of a Demand Registration
pursuant to subsection 2.1.1 and it continues to actively employ, in good faith, all reasonable efforts to cause the applicable
Registration Statement to become effective; (B) the Holders have requested an Underwritten Registration and the Company and the
Holders are unable to obtain the commitment of underwriters to firmly underwrite the offer; or (C) in the good faith judgment of
the Board such Registration would be seriously detrimental to the Company and the Board concludes as a result that it is essential to
defer the filing of such Registration Statement at such time, then in each case the Company shall furnish to such Holders a certificate
signed by the Chairman of the Board stating that in the good faith judgment of the Board it would be seriously detrimental to the Company
for such Registration Statement to be filed in the near future and that it is therefore essential to defer the filing of such Registration
Statement. In such event, the Company shall have the right to defer such filing for a period of not more than thirty (30) days; provided,
however, that the Company shall not defer its obligation in this manner more than once in any 12-month period.
Article III
COMPANY PROCEDURES
Section 3.1 General
Procedures. If at any time on or after the date the Company consummates a Business Combination the Company is required to effect
the Registration of Registrable Securities, the Company shall use its best efforts to effect such Registration to permit the sale of
such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall, as
expeditiously as possible:
3.1.1 prepare
and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use its
reasonable best efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities
covered by such Registration Statement have been sold;
3.1.2 prepare
and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the
Prospectus, as may be requested by the Holders or any Underwriter of Registrable Securities or as may be required by the rules, regulations
or instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder
to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance
with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;
3.1.3 prior
to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters,
if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies of such
Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including
all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including
each preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable Securities included in such
Registration or the legal counsel for any such Holders may request in order to facilitate the disposition of the Registrable Securities
owned by such Holders;
3.1.4 prior
to any public offering of Registrable Securities, use its best efforts to (i) register or qualify the Registrable Securities covered
by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the
Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request
and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered
with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and
do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such
Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however,
that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required
to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it
is not then otherwise so subject;
3.1.5 cause
all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities issued
by the Company are then listed;
3.1.6 provide
a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date
of such Registration Statement;
3.1.7 advise
each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any
stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding
for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if
such stop order should be issued;
3.1.8 at
least five (5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration
Statement furnish a copy thereof to each seller of such Registrable Securities and its counsel, including, without limitation, providing
copies promptly upon receipt of any comment letters received with respect to any such Registration Statement or Prospectus;
3.1.9 notify
the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act,
of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes
a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;
3.1.10 permit
a representative of the Holders (such representative to be selected by a majority of the participating Holders), the Underwriters, if
any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s own expense,
in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information
reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided,
however, that such representatives or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory
to the Company, prior to the release or disclosure of any such information; and provided further, the Company may not include
the name of any Holder or Underwriter or any information regarding any Holder or Underwriter in any Registration Statement or Prospectus,
any amendment or supplement to such Registration Statement or Prospectus, any document that is to be incorporated by reference into such
Registration Statement or Prospectus, or any response to any comment letter, without the prior written consent of such Holder or Underwriter
and providing each such Holder or Underwriter a reasonable amount of time to review and comment on such applicable document, which comments
the Company shall include unless contrary to applicable law;
3.1.11 obtain
a “cold comfort” letter from the Company’s independent registered public accountants in the event of an Underwritten
Registration which the participating Holders may rely on, in customary form and covering such matters of the type customarily covered
by “cold comfort” letters as the managing Underwriter may reasonably request, and reasonably satisfactory to a majority-in-interest
of the participating Holders;
3.1.12 on
the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion, dated such date, of counsel
representing the Company for the purposes of such Registration, addressed to the Holders, the placement agent or sales agent, if any,
and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being
given as the Holders, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions
and negative assurance letters, and reasonably satisfactory to a majority in interest of the participating Holders;
3.1.13 in
the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary
form, with the managing Underwriter of such offering;
3.1.14 make
available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12)
months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement
which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor
rule promulgated thereafter by the Commission);
3.1.15 if
the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $25,000,000, use its reasonable
efforts to make available senior executives of the Company to participate in customary “road show” presentations that may
be reasonably requested by the Underwriter in any Underwritten Offering; and
3.1.16 otherwise,
in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection
with such Registration.
Section 3.2 Registration
Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the
Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions
and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,”
all reasonable fees and expenses of any legal counsel representing the Holders.
Section 3.3 Requirements
for Participation in Underwritten Offerings. No person may participate in any Underwritten Offering for equity securities of the
Company pursuant to a Registration initiated by the Company hereunder unless such person (i) agrees to sell such person’s
securities on the basis provided in any underwriting arrangements approved by the Company and (ii) completes and executes all customary
questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be
reasonably required under the terms of such underwriting arrangements.
Section 3.4 Suspension
of Sales; Adverse Disclosure. Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains
a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until he, she or it has received
copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that the Company hereby covenants to
prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until he, she or it is advised
in writing by the Company that the use of the Prospectus may be resumed. If the filing, initial effectiveness or continued use of a Registration
Statement in respect of any Registration at any time would require the Company to make an Adverse Disclosure or would require the inclusion
in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control,
the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend
use of, such Registration Statement for the shortest period of time, but in no event more than thirty (30) days, determined in good faith
by the Company to be necessary for such purpose. In the event the Company exercises its rights under the preceding sentence, the Holders
agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration
in connection with any sale or offer to sell Registrable Securities. The Company shall immediately notify the Holders of the expiration
of any period during which it exercised its rights under this Section 3.4.
Section 3.5 Reporting
Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company
under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period)
all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of
the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings. The Company further covenants
that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such
Holder to sell shares of Common Stock held by such Holder without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission),
including providing any legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder a written certification
of a duly authorized officer as to whether it has complied with such requirements.
Article IV
INDEMNIFICATION AND CONTRIBUTION
Section 4.1 Indemnification.
4.1.1 The
Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers and directors and each
person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses
(including attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement,
Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused
by or contained in any information furnished in writing to the Company by such Holder expressly for use therein. The Company shall indemnify
the Underwriters, their officers and directors and each person who controls such Underwriters (within the meaning of the Securities Act)
to the same extent as provided in the foregoing with respect to the indemnification of the Holder.
4.1.2 In
connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to
the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration
Statement or Prospectus and, to the extent permitted by law, shall indemnify the Company, its directors and officers and agents and each
person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses
(including without limitation reasonable attorneys’ fees) resulting from any untrue statement of material fact contained in the
Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission of a material
fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use therein;
provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable
Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds
received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities
shall indemnify the Underwriters, their officers, directors and each person who controls such Underwriters (within the meaning of the
Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the Company.
4.1.3 Any
person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification
hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s
reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit
such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense
is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its
consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume
the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (plus local counsel) for all parties
indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict
of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying
party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot
be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such
settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect to such claim or litigation.
4.1.4 The
indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer
of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions
as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s
indemnification is unavailable for any reason.
4.1.5 If
the indemnification provided under Section 4.1 hereof from the indemnifying party is unavailable or insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying
party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result
of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party
and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information
supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative
intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the
liability of any Holder under this subsection 4.1.5 shall be limited to the amount of the net proceeds received by such Holder
in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities
referred to above shall be deemed to include, subject to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3
above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined
by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to
in this subsection 4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of
such fraudulent misrepresentation.
Article V
MISCELLANEOUS
Section 5.1 Notices.
Any notice or communication under this Agreement must be in writing and given by (i) deposit in the United States mail, addressed
to the party to be notified, postage prepaid and registered or certified with return receipt requested, (ii) delivery in person
or by courier service providing evidence of delivery, or (iii) transmission by hand delivery, electronic mail, telecopy, telegram
or facsimile. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently
given, served, sent, and received, in the case of mailed notices, on the third business day following the date on which it is mailed
and, in the case of notices delivered by courier service, hand delivery, electronic mail, telecopy, telegram or facsimile, at such time
as it is delivered to the addressee (with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused
by the addressee upon presentation. Any notice or communication under this Agreement must be addressed, if to the Company, to: 600 Steamboat
Road, Greenwich, CT 06830, and, if to any Holder, at such Holder’s address or contact information as set forth in the Company’s
books and records. Any party may change its address for notice at any time and from time to time by written notice to the other parties
hereto, and such change of address shall become effective thirty (30) days after delivery of such notice as provided in this Section 5.1.
Section 5.2 Assignment;
No Third Party Beneficiaries.
5.2.1 This
Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or
in part.
5.2.2 Prior
to the expiration of the Founder Shares Lock-up Period or the Private Placement Lock-up Period, as the case may be, no Holder may assign
or delegate such Holder’s rights, duties or obligations under this Agreement, in whole or in part, except in connection with a
transfer of Registrable Securities by such Holder to a Permitted Transferee but only if such Permitted Transferee agrees to become bound
by the transfer restrictions set forth in this Agreement.
5.2.3 This
Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and
the permitted assigns of the Holders, which shall include Permitted Transferees.
5.2.4 This
Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this
Agreement and Section 5.2 hereof.
5.2.5 No
assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company
unless and until the Company shall have received (i) written notice of such assignment as provided in Section 5.1 hereof
and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions
of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment
made other than as provided in this Section 5.2 shall be null and void.
Section 5.3 Counterparts.
This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original,
and all of which together shall constitute the same instrument, but only one of which need be produced.
Section 5.4 Governing
Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY
AGREE THAT (I) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO AGREEMENTS
AMONG NEW YORK RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN NEW YORK AND (II) THE VENUE FOR ANY ACTION TAKEN WITH
RESPECT TO THIS AGREEMENT SHALL BE ANY STATE OR FEDERAL COURT IN NEW YORK COUNTY IN THE STATE OF NEW YORK.
Section 5.5 Amendments
and Modifications. Upon the written consent of the Company and the Holders of at least a majority in interest of the Registrable
Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be
waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding
the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder, solely in his, her or its capacity as a holder
of the shares of capital stock of the Company, in a manner that is materially different from the other Holders (in such capacity) shall
require the consent of the Holder so affected. No course of dealing between any Holder or the Company and any other party hereto or any
failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a
waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement
by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.
Section 5.6 Other
Registration Rights. The Company represents and warrants that no person, other than a Holder of Registrable Securities, has any right
to require the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration
filed by the Company for the sale of securities for its own account or for the account of any other person. Further, the Company represents
and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions and
in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.
Section 5.7 Term.
This Agreement shall terminate upon the earlier of (i) the tenth anniversary of the date of this Agreement or (ii) the date
as of which (A) all of the Registrable Securities have been sold pursuant to a Registration Statement (but in no event prior to
the applicable period referred to in Section 4(a) (3) of the Securities Act and Rule 174 thereunder (or any successor
rule promulgated thereafter by the Commission)) or (B) the Holders of all Registrable Securities are permitted to sell the
Registrable Securities without registration pursuant to Rule 144 (or any similar provision) under the Securities Act with no volume
or other restrictions or limitations. The provisions of Section 3.5 and Article IV shall survive any termination.
[Signature Page Follows]
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
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COMPANY: |
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AMCI ACQUISITION CORP. II, a Delaware corporation |
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By: |
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Name: Nimesh Patel |
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Title: Chief Executive Officer |
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HOLDERS: |
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AMCI SPONSOR II LLC |
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By: |
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Name: Nimesh Patel |
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Title: Sole Managing Member |
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By: |
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Name: Nimesh Patel |
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By: |
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Name: Brian Beem |
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By: |
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Name: Patrick Murphy |
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By: |
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Name: Hans Mende |
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By: |
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Name: Kate Burson |
[Signature
Page to Registration Rights Agreement]
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By: |
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Name: Mark Pinho |
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By: |
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Name: Walker Woodson |
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By: |
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Name: Jill Watz |
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AMCI Group, LLC Series 35 |
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By: |
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Name: Hans Mende |
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Title: Authorized Signatory |
[Signature Page to Registration Rights Agreement]
Exhibit 10.4
PRIVATE PLACEMENT WARRANTS PURCHASE AGREEMENT
THIS PRIVATE PLACEMENT WARRANTS
PURCHASE AGREEMENT, dated as of [●], 2021 (as it may from time to time be amended and including all exhibits referenced
herein, this “Agreement”), is entered into by and among AMCI Acquisition Corp. II, a Delaware corporation (the “Company”),
and AMCI Sponsor II LLC, a Delaware limited liability company (the “Purchaser”).
WHEREAS, the Company
intends to consummate an initial public offering of the Company’s units (the “Public Offering”), each unit
consisting of one share of the Company’s Class A common stock, par value $0.0001 per share (each, a
“Share”), and one-half of one redeemable warrant. Each whole warrant entitles the holder to purchase one Share at
an exercise price of $11.50 per Share. The Purchaser has agreed to purchase an aggregate of 3,500,000 warrants (or 3,725,000
warrants in the aggregate to the extent the over-allotment option in connection with the Public Offering is exercised) (the
“Private Placement Warrants”), each Private Placement Warrant entitling the holder to purchase one Share at an
exercise price of $11.50 per Share.
NOW THEREFORE, in consideration
of the mutual promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:
AGREEMENT
Section 1 Authorization,
Purchase and Sale; Terms of the Private Placement Warrants.
A. Authorization
of the Private Placement Warrants. The Company has duly authorized the issuance and sale of the Private Placement Warrants to the
Purchaser.
B. Purchase
and Sale of the Private Placement Warrants.
On the date of the consummation
of the Public Offering or on such earlier time and date as may be mutually agreed by the Purchaser and the Company (the “Initial
Closing Date”), the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company, an aggregate
of 3,500,000 Private Placement Warrants at a price of $1.00 per warrant for an aggregate purchase price of $3,500,000 (the “Purchase
Price”), which shall be paid by wire transfer of immediately available funds to the Company in accordance with the Company’s
wiring instructions at least one business day prior to the Initial Closing Date. On the Initial Closing Date, the Company, shall either,
at its option, deliver certificates evidencing the Private Placement Warrants purchased by the Purchaser on such date duly registered
in the Purchaser’s name to the Purchaser, or effect such delivery in book-entry form. On the date of the consummation of the closing
of the over-allotment option in connection with the Public Offering or on such earlier time and date as may be mutually agreed by the
Purchaser and the Company (each such date, an “Over-allotment Closing Date,” and each Over-allotment Closing Date (if
any) and the Initial Closing Date being sometimes referred to herein as a “Closing Date”), the Company shall issue
and sell to the Purchaser, and the Purchaser shall purchase from the Company, up to an aggregate of 225,000 Private Placement Warrants,
in the same proportion as the amount of the over-allotment option that is exercised, at a price of $1.00 per warrant for an aggregate
purchase price of up to $225,000 (if the over-allotment option in connection with the Public Offering is exercised in full) (the “Over-allotment
Purchase Price”), which shall be paid by wire transfer of immediately available funds to the Company in accordance with the
Company’s wiring instructions, at least one business day prior to the Over-allotment Closing Date. On the Over-allotment Closing
Date, upon the payment by the Purchaser of the Over-allotment Purchase Price payable by them by wire transfer of immediately available
funds to the Company, the Company shall either, at its option, deliver certificates evidencing the Private Placement Warrants purchased
by the Purchaser on such date duly registered in the Purchaser’s name to the Purchaser, or effect such delivery in book-entry form.
C. Terms
of the Private Placement Warrants.
(i) The
Private Placement Warrants shall have their terms set forth in a Warrant Agreement to be entered into by the Company and a warrant agent,
in connection with the Public Offering (a “Warrant Agreement”).
(ii) At
or prior to the time of the Initial Closing Date, the Company and the Purchaser shall enter into a registration rights agreement (the
“Registration Rights Agreement”) pursuant to which the Company will grant certain registration rights to the Purchaser
relating to the Private Placement Warrants and the Shares underlying the Private Placement Warrants.
Section 2 Representations
and Warranties of the Company. As a material inducement to the Purchaser to enter into this Agreement and purchase the Private Placement
Warrants, the Company hereby represents and warrants to the Purchaser (which representations and warranties shall survive each Closing
Date) that:
A. Organization
and Corporate Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State
of Delaware and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably be expected to
have a material adverse effect on the financial condition, operating results or assets of the Company. The Company possesses all requisite
corporate power and authority necessary to carry out the transactions contemplated by this Agreement and the Warrant Agreement.
B. Authorization;
No Breach.
(i) The
execution, delivery and performance of this Agreement and the Private Placement Warrants have been duly authorized and approved by the
Company as of each Closing Date. This Agreement constitutes a valid and binding obligation of the Company, enforceable in accordance with
its terms. Upon each issuance of Private Placement Warrants in accordance with, and payment pursuant to, the terms of the Warrant Agreement
and this Agreement, the Private Placement Warrants will constitute valid and binding obligations of the Company, enforceable in accordance
with their terms.
(ii) The
execution and delivery by the Company of this Agreement and the Private Placement Warrants, the issuance and sale of the Private Placement
Warrants, the issuance of the Shares upon exercise of the Private Placement Warrants and the fulfillment of, and compliance with, the
respective terms hereof and thereof by the Company, do not and will not as of each Closing Date (a) conflict with or result in a
breach of the terms, conditions or provisions of, (b) constitute a default under, (c) result in the creation of any lien, security
interest, charge or encumbrance upon the Company’s capital stock or assets under, (d) result in a violation of, or (e) require
any authorization, consent, approval, exemption, action, notice, declaration or filing, in each case, by or to any court or administrative
or governmental body or agency pursuant to the certificate of incorporation or the bylaws of the Company (in effect on the date hereof
or as may be amended prior to completion of the contemplated Public Offering), or any material law, statute, rule or regulation to
which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject, except for any filings required
after the date hereof under federal or state securities laws.
C. Title
to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, the Placement
Warrants will be duly and validly issued and the Shares issuable upon exercise of the Private Placement Warrants will be duly and validly
issued, fully paid and nonassessable. On the date of issuance of the Placement Warrants, the Shares issuable upon exercise of the Placement
Warrants shall have been reserved for issuance. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant
Agreement, each Purchaser will have good title to the Private Placement Warrants and the Shares issuable upon exercise of such Private
Placement Warrants, free and clear of all liens, claims and encumbrances of any kind, other than (i) transfer restrictions hereunder
and under the other agreements contemplated hereby, (ii) transfer restrictions under federal and state securities laws, and (iii) liens,
claims or encumbrances imposed due to the actions of either Purchaser.
D. Governmental
Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is required
in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by the Company of any
other transactions contemplated hereby.
Section 3 Representations
and Warranties of the Purchaser. As a material inducement to the Company to enter into this Agreement and issue and sell the Private
Placement Warrants to the Purchaser, the Purchaser hereby, severally and not jointly, represents and warrants to the Company (which representations
and warranties shall survive each Closing Date) that:
A. Organization
and Requisite Authority. The Purchaser possesses all requisite power and authority necessary to carry out the transactions contemplated
by this Agreement.
B. Authorization;
No Breach.
(i) This
Agreement constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’
rights and to general equitable principles (whether considered in a proceeding in equity or law).
(ii) The
execution and delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchaser
does not and shall not as of each Closing Date conflict with or result in a breach by the Purchaser of the terms, conditions or provisions
of any agreement, instrument, order, judgment or decree to which the Purchaser is subject that would materially impact its ability to
perform its obligations hereunder.
C. Investment
Representations.
(i) The
Purchaser is acquiring the Private Placement Warrants and, upon exercise of the Private Placement Warrants, the Shares issuable upon such
exercise (collectively, the “Securities”), for the Purchaser’s own account, for investment purposes only and
not with a view towards, or for resale in connection with, any public sale or distribution thereof.
(ii) The
Purchaser is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation D of the Securities
Act of 1933, as amended (the “Securities Act”), and the Purchaser has not experienced a disqualifying event as enumerated
pursuant to Rule 506(d) of Regulation D under the Securities Act.
(iii) The
Purchaser understands that the Securities are being offered and will be sold to it in reliance on specific exemptions from the registration
requirements of the United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and
the Purchaser’s compliance with, the representations and warranties of the Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire such Securities.
(iv) The
Purchaser did not decide to enter into this Agreement as a result of any general solicitation or general advertising within the meaning
of Rule 502(c) under the Securities Act.
(v) The
Purchaser has been furnished with all materials relating to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities which have been requested by the Purchaser. The Purchaser has been afforded the opportunity to
ask questions of the executive officers and directors of the Company. The Purchaser understands that its investment in the Securities
involves a high degree of risk and it has sought such accounting, legal and tax advice as it has considered necessary to make an informed
investment decision with respect to the acquisition of the Securities.
(vi) The
Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made
any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities by the Purchaser
nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(vii) The
Purchaser understands that: (a) the Securities have not been and are not being registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered thereunder or (2) sold
in reliance on an exemption therefrom; and (b) except as specifically set forth in the Registration Rights Agreement, neither the
Company nor any other person is under any obligation to register the Securities under the Securities Act or any state securities laws
or to comply with the terms and conditions of any exemption thereunder. While the Purchaser understands that Rule 144 under the Securities
Act is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies)
or issuers that have been at any time previously a shell company, the Purchaser understands that Rule 144 includes an exception to
this prohibition if the following conditions are met: (i) the issuer of the securities that was formerly a shell company has ceased
to be a shell company; (ii) the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”); (iii) the issuer of the securities has filed
all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that
the issuer was required to file such reports and materials), other than Form 8-K reports; and (iv) at least one year has elapsed
from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not
a shell company.
(viii) The
Purchaser has knowledge and experience in financial and business matters, understands the high degree of risk associated with investments
in the securities of companies in the development stage such as the Company, is capable of evaluating the merits and risks of an investment
in the Securities and is able to bear the economic risk of an investment in the Securities in the amount contemplated hereunder for an
indefinite period of time. The Purchaser has adequate means of providing for its current financial needs and contingencies and will have
no current or anticipated future needs for liquidity which would be jeopardized by the investment in the Securities. The Purchaser can
afford a complete loss of its investment in the Securities.
Section 4 Conditions
of the Purchaser’s Obligations. The obligations of the Purchaser to purchase and pay for the Private Placement Warrants are
subject to the fulfillment, on or before each Closing Date, of each of the following conditions:
A. Representations
and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct at and as
of such Closing Date as though then made.
B. Performance.
The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before such Closing Date.
C. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement
or the Warrant Agreement.
D. Warrant
Agreement and Registration Rights Agreement. The Company shall have entered into the Warrant Agreement and the Registration Rights
Agreement, each on terms satisfactory to the Purchaser.
E. Corporate
Consents. The Company shall have obtained the consent of its Board of Directors authorizing the execution, delivery and performance
of this Agreement and the Warrant Agreement and the issuance and sale of the Private Placement Warrants hereunder.
Section 5 Conditions
of the Company’s Obligations. The obligations of the Company to the Purchaser under this Agreement are subject to the fulfillment,
on or before each Closing Date, of each of the following conditions:
A. Representations
and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct at and
as of such Closing Date as though then made.
B. Performance.
The Purchaser shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by the Purchaser on or before such Closing Date.
C. Corporate
Consents. The Company shall have obtained the consent of its Board of Directors authorizing the execution, delivery and performance
of this Agreement and the Warrant Agreement and the issuance and sale of the Private Placement Warrants hereunder.
D. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement
or the Warrant Agreement.
E. Warrant
Agreement. The Company shall have entered into the Warrant Agreement on terms satisfactory to the Company.
Section 6 Termination.
This Agreement may be terminated at any time after December 31, 2021 upon the election by either the Company or the Purchaser
upon written notice to the other party if the closing of the Public Offering does not occur prior to such date.
Section 7 Survival
of Representations and Warranties. All of the representations and warranties contained herein shall survive each Closing Date.
Section 8 Definitions.
Terms used but not otherwise defined in this Agreement shall have the meaning assigned to such terms in the registration statement
on Form S-1 the Company plans to file with the U.S. Securities and Exchange Commission under the Securities Act.
Section 9 Miscellaneous.
A. Successors
and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether so expressed
or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this Agreement without the prior
written consent of the other party hereto, other than assignments by the Purchaser to its affiliates (including, without limitation,
one or more of its members).
B. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
C. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than
one party, but all such counterparts taken together shall constitute one and the same agreement. In the event that any signature is delivered
by facsimile transmission or by e-mail delivery of a “pdf” format data file, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile
or “.pdf” signature page were an original thereof.
D. Descriptive
Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive
part of this Agreement. The use of the word “including” in this Agreement shall be by way of example rather than by limitation.
E. Governing
Law. This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed
in accordance with the internal laws of the State of New York.
F. Amendments.
This Agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed by
all parties hereto.
[Signature Page Follows]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the date first set forth above.
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COMPANY: |
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AMCI ACQUISITION CORP. II, a Delaware corporation |
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By: |
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Name: Nimesh Patel
Title: Chief Executive Officer |
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PURCHASER: |
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AMCI SPONSOR II LLC, a Delaware limited liability company |
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By: |
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Name: Nimesh Patel
Title: Sole Managing Member |
[Signature Page to Private Placement Warrants
Purchase Agreement]
Exhibit 10.9
June 3, 2021
[INVESTOR]
[ADDRESS]
Ladies and Gentlemen:
This letter agreement (“Agreement”)
sets forth the terms of the agreement between certain holders of shares of Class B common stock, par value $0.0001 per share (the
“Founder Shares”), of AMCI Acquisition Corp. II, a Delaware corporation (the “SPAC”), forth on Exhibit A
hereto (collectively, the “Founders”) and the undersigned (“Investor”). The SPAC is a blank check
company whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar
business combination with one or more businesses (a “Business Combination”). The SPAC intends to consummate an initial
public offering (“IPO”) of units, each consisting of one share of Class A common stock of the SPAC and one-half
of one warrant, with each whole warrant exercisable to purchase one share of Class A common stock of the SPAC.
1. Investor
hereby expresses an interest (the “Expression of Interest”) to purchase 9.9% of the number of such units sold in the
IPO (excluding any units sold by virtue of the underwriters’ exercise of their over-allotment option) (the “Purchased Public
Units”).In connection with the Expression of Interest, the Founders agree, severally and not jointly, to sell and transfer to
Investor the amount of Founder Shares set forth next to such Founders name on Exhibit A hereto (the “Transfer Shares”).
The consummation of the sale of the Founder Shares will occur upon the closing of the Business Combination for the same per-share price
that such Founders initially paid for the Founder Shares. Notwithstanding the foregoing, in the event Investor submits an order to purchase
less than 9.9% of the units sold in the IPO (excluding any units sold by virtue of the underwriters’ exercise of their over-allotment
option), then the number of Founder Shares that Investor shall have a right to purchase upon consummation of the Business Combination
shall be reduced to zero (0). In addition, if on the date of the vote by the SPAC’s stockholders to approve the Business Combination, Investor
elects to redeem any portion of the shares of Class A common stock (or otherwise at any time prior to the liquidation of the SPAC
if a Business Combination is not timely consummated), then the number of Founder Shares that Investor shall have the right to purchase
from the Founders shall be reduced to a number equal to the product of (a) the Transfer Shares multiplied by (b) the quotient
of (i) (x) the number of shares of Class A common stock underlying Purchased Public Units purchased by Investor in the
IPO less (y) the number of shares of Class A common stock so redeemed by the Investor, divided by (ii) the number of shares
of Class A common stock underlying Purchased Public Units purchased by Investor in the IPO. By way of example, and without limiting
the foregoing, if Investor elects to redeem 50% of the total number of shares of Class A common stock underlying its Purchased Public
Units, then the number of Founder Shares that Investor shall have the right to purchase from the Founders shall be reduced, on a pro rata
basis among the Founders, to 50% of the number of Founder Shares initially subject to Investor’s purchase right under this Agreement.
2. Investor
acknowledges that the proceeds of the IPO and the sale of the private placement warrants, as described in the SPAC’s registration
statement, initially filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 12, 2021,
as subsequently amended on March 15, 2021 and April 5, 2021, in connection with the IPO (the “Registration Statement”)
shall be deposited by the SPAC into the trust account (“Trust Account”) established by the SPAC for the benefit of
its public stockholders, as described in the Registration Statement. Investor further acknowledges that it has no right, title, interest
or claim of any kind in or to any monies held in the Trust Account (“Claim”) or any other asset of the SPAC as a result
of any liquidation of the SPAC other than with respect to shares of Class A common stock purchased by Investor in the IPO or in the
open market and hereby waives any Claim it may have in the future against the SPAC and will not seek recourse against the Trust Account
for any reason whatsoever (except in respect of any shares of Class A common stock of the SPAC purchased directly by Investor in
the IPO or in the open market).
3. Investor
and SPAC acknowledge that as of the date hereof, the total number of units expected to be sold in the IPO is 15,000,000. Investor acknowledges
that, if in the course of the IPO, the SPAC decides that, due to market conditions at that time, it is necessary to reduce the proposed
IPO offering size, Investor’s allocation of Founder Shares as described in this Agreement shall be reduced proportionately.
SPAC and Founders acknowledge that, if in the course of the IPO, the SPAC decides to increase the proposed IPO offering size, Investor’s
allocation of Founder Shares as described in this Agreement shall be increased proportionately.
4. Investor
acknowledges that the SPAC and the Founders may deem it necessary in order to facilitate a Business Combination for the Founders to forfeit,
transfer, exchange or amend the terms of all or any portion of the Founder Shares or to enter into any other arrangements with respect
to the Founder Shares to facilitate the consummation of such Business Combination, including voting in favor of any amendment to the terms
of the Founder Shares (a “Change in Investment”). The Founders shall have sole discretion to enter into any such agreement
or arrangement involving a Change in Investment, to vote in favor of any proposal involving a Change in Investment or to otherwise facilitate
or take any action to affect or permit any Change in Investment without the consent of Investor. Any such Change in Investment shall apply
pro rata to the Founder Shares held by the Founders and Investor based on the relative number of Founder Shares to be held by each on
the date of the closing of the transactions contemplated by this Agreement; provided, that in each case Investor has been given notice
at least two (2) business days prior to any proposed Change in Investment. Investor agrees to take all steps and execute all such
agreements as may be necessary or reasonably requested by the Founders to effectuate such Change in Investment on the same terms as applicable
to the Founders. If the Founders or any of their affiliates enter into any agreement that gives such persons the right, on an absolute
or contingent basis, to restore the value or original terms of any Founder Shares that were the subject of any such Change in Investment,
or to receive any other consideration, then Investor shall be provided the same rights on a pro rata basis.
5. Investor
acknowledges and agrees that, upon receipt of the Founder Shares, it will execute agreements in form and balance typical for transactions
of this nature necessary to effectuate the foregoing agreements and obligations, including but not limited to (i) a registration
rights agreement and (ii) the letter agreement, containing customary voting, lock-up and waiver of rights provisions for such offerings,
entered into in connection with the IPO.
6. Investor hereby represents and warrants that, as applicable:
(a) it
has been advised that the Founder Shares have not been registered under the Securities Act of 1933, as amended (the “Securities
Act”);
(b) it
acknowledges that there exists no public market for the Founder Shares, that no such public market may develop in the future, the Founder
Shares, when sold or issued, will be “restricted securities” and as a result, Investor acknowledges that the Founder
Shares may be required to be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from such
registration is available. Investor is aware of the provisions of Rule 144 promulgated under the Securities Act which permit resales
of securities purchased in a private placement subject to certain limitations and to the satisfaction of certain conditions provided for
thereunder, including, among other things, the existence of a public market for the securities, the availability of certain current public
information about the company issuing the securities, the resale occurring not less than six months after a party has purchased and paid
for the security to be sold, the sale being effected through a “broker’s transaction” or in transactions directly with
a “market maker” and the number of securities being sold during any three-month period not exceeding specified limitations.
Investor further acknowledges that the Founder Shares will be subject to certain lock-up restrictions, as described in the Registration
Statement, and may only be transferred pursuant to the terms of such lock-up. Investor also acknowledges that Rule 144 is not available
for the resale of securities initially issued by shell companies or issuers that have been at any time previously a shell company and
that Rule 144 will provide an exception to this prohibition only if (i) the SPAC has then ceased to be a shell company; (ii) the
SPAC is then subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”); (iii) the SPAC has then filed all Exchange Act reports and material required to be filed,
as applicable, during the preceding 12 months (or such shorter period that the SPAC was required to file such reports and materials),
other than Form 8-K reports; and (iv) at least one year has elapsed from the time that the SPAC filed current Form 10-type
information with the SEC reflecting its status as an entity that is not a shell company;
(c) it will be acquiring the Founder Shares for its own account for investment purposes only;
(d) it
has no present intention of selling or otherwise disposing of the Founder Shares in violation of the securities laws of the United States;
(e) it
is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act;
(f) it
will, upon request, provide Founders to the completed an IRS Form W-9 or Form W-8BEN (or similar form), as applicable;
(g) it
has had both the opportunity to ask questions and receive answers from the officers and directors of the SPAC and all persons acting on
its behalf concerning the terms and conditions of the offer made hereunder;
(h) it
is familiar with the proposed business, management, financial condition and affairs of the SPAC;
(i) it
has full power, authority and legal capacity to execute and deliver this Agreement and any documents contemplated herein or needed to
consummate the transactions contemplated in this Agreement;
(j) this
Agreement constitutes its respective legal, valid and binding obligation, and is enforceable against it; and
(k) Investor
is not, and is not acting as, an agent, representative, intermediary or nominee for any person identified on the list of blocked persons
maintained by the Office of Foreign Assets Control of the U.S. Treasury Department; and Investor has complied with all applicable U.S.
laws, regulations, directives and executive orders relating to anti-money laundering.
7.
SPAC and Founders hereby represent and warrant that there
are no other agreements between SPAC, Founders, and an investor to purchase Founder Shares in connection with such investor’s
participation in the IPO, other than agreements which do not contain any terms materially more favorable to such investors than the
terms contained within this Agreement.
8. Miscellaneous.
(a) Notices.
Any notice or other document required or permitted to be given or delivered to the parties hereto shall be in writing and sent: (i) by
registered or certified mail with return receipt requested (postage prepaid) or (ii) by a recognized overnight delivery service (with
charges prepaid).
If to the Founders, at:
c/o AMCI Acquisition Corp.
II
600 Steamboat Road
Greenwich, Connecticut 06830
Attention: Nimesh Patel
With a copy, which shall not
constitute notice, to:
White & Case LLP
1221 Avenue of the Americas,
45th Floor
New York, New York 10020
Attention: Elliott Smith
Email: Elliott.Smith@whitecase.com
If to Investor at:
[●]
With a copy, which shall not
constitute notice, to:
[●]
(b) Entire
Agreement. This Agreement, together with any other documents, instruments and writings that are delivered pursuant hereto or referenced
herein, represents the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior
understandings, agreements or representations by or among the parties hereto, written or oral, to the extent they relate in any way to
the subject matter hereof of the transactions contemplated hereby. This Agreement may be terminated, modified, waived or amended only
by a writing executed and delivered by all parties hereto. No right or obligation of a party shall be assigned or otherwise transferred
without prior notice to and the written consent of the other party. Any assignment or transfer in violation of the foregoing shall be
null and void.
(c) Counterparts;
Execution. This Agreement may be executed in any number of counterparts and by the different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument.
This Agreement may be executed by facsimile transmission, PDF, electronic signature or other similar electronic means with the same force
and effect as if such signature page were an original thereof.
(d) Law
Governing this Agreement. This Agreement, the entire relationship of the parties hereto, and any litigation between the parties (whether
grounded in contract, tort, statute, law or equity) shall be governed by, construed in accordance with, and interpreted pursuant to the
laws of the State of New York, without giving effect to its choice of law principles.
(e) Successors.
All of the terms, agreements, covenants, representations, warranties, and conditions of this Agreement are binding upon, and inure to
the benefit of and are enforceable by, the parties hereto and their respective successors. Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
(f) WAIVER
OF JURY TRIAL. EACH PARTY HERETO (INCLUDING ITS AFFILIATES, AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES) HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(g) Specific
Enforcement; Consent to Jurisdiction. The Founders and Investor acknowledge and agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties hereto shall be entitled to seek an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to
which any of them may be entitled by law or equity. The parties hereby irrevocably and unconditionally (i) submit to the jurisdiction
of the state courts of New York and the United States District Court for the Southern District of New York for the purpose of any suit,
action or other proceeding arising out of or based upon this Agreement, (ii) agree not to commence any suit, action or other proceeding
arising out of or based upon this Agreement except in state courts of New York or the United States District Court for the Southern District
of New York, and (iii) waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or
proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.
(h) Drafting.
This Agreement shall not be construed for or against a party based upon authorship.
(i) Assignment.
Investor may assign its rights and obligations under this Agreement to any of its affiliates that agrees to be bound by the terms of this
Agreement.
(j) Captions;
Certain Definitions. The captions of the various sections and paragraphs of this Agreement have been inserted only for the purposes
of convenience; such captions are not a part of this Agreement and shall not be deemed in any manner to modify, explain, enlarge or restrict
any of the provisions of this Agreement. As used in this Agreement the term “person” shall mean and include an individual,
a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization or any other legal
entity and a government or any department or agency thereof.
(k) Severability.
In the event that any term or provision of this Agreement shall be finally determined to be superseded, invalid, illegal or otherwise
unenforceable pursuant to applicable law by an authority having jurisdiction and venue, that determination shall not impair or otherwise
affect the validity, legality or enforceability: (i) by or before that authority of the remaining terms and provisions of this Agreement,
which shall be enforced as if the unenforceable term or provision were deleted, or (ii) by or before any other authority of any of
the terms and provisions of this Agreement.
(l) Expenses.
Each of the Founders and Investor will bear its own costs and expenses incurred in connection with the preparation, execution and performance
of this Agreement and the consummation of the transactions contemplated hereby, including all fees and expenses of agents, representatives,
financial advisors, legal counsel and accountants. The SPAC shall be responsible for the fees of its transfer agent, stamp taxes and all
of The Depository Trust Company’s fees associated with the issuance of the Founder Shares and the securities issuable upon conversion
or exercise of the Founder Shares.
(m) Confidentiality.
Except as may be required by law, regulation or applicable stock exchange listing requirements, unless and until the transactions contemplated
hereby and the terms hereof are publicly announced or otherwise publicly disclosed by the SPAC, the parties hereto shall keep confidential
and shall not publicly disclose the existence or terms of this Agreement. Notwithstanding the foregoing, Investor shall be permitted
to disclose any information to its affiliates and its and their respective directors, officers, employees, advisors, director or indirect
owners, agents and representatives, in each case so long as such person or entity has been advised of the confidentiality obligations
hereunder; provided that Investor shall be liable for any breach of such confidentiality obligations by any such person or entity.
(n) Survival
of Representations and Warranties. All of the representations and warranties contained herein shall survive the consummation of the
transactions contemplated by this Agreement.
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Very truly yours, |
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INVESTOR |
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[______________] |
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By: |
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Name: |
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Title: |
Accepted and Agreed:
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AMCI Group, LLC Series 35 |
| By: |
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| | | Name: Hans Mende |
| | | Title: Authorized Signatory |
EXHIBIT A
| Founder | |
Founder shares subject to
Investor’s right to purchase | |
| Nimesh Patel | |
| 17,165 | |
| Brian Beem | |
| 17,165 | |
| Patrick Murphy | |
| 10,065 | |
| AMCI Group LLC, Series 35 | |
| 29,855 | |
| TOTAL SHARES | |
| 74,250 | |
Exhibit 23.1
Independent
Registered Public Accounting Firm’s Consent
We consent to the inclusion in this Registration
Statement of AMCI Acquisition Corp. II (the “Company”) on Amendment No. 3 to Form S-1 [File No. 333-253107] of our report
dated February 12, 2021, except for Notes 1, 2, 5 and 8, as to which the date is June 14, 2021, which includes an explanatory paragraph
as to the Company’s ability to continue as a going concern, with respect to our audit of the financial statements of AMCI Acquisition
Corp. II as of January 29, 2021 and for the period from January 28, 2021 (inception) through January 29, 2021, which report appears in
the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts”
in such Prospectus.
/s/ Marcum llp
Marcum llp
West Palm Beach, FL
June 14, 2021
