References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to AltC Acquisition Corp. References to our "management" or our
"management team" refer to our officers and directors, and references to the
"Sponsor" refer to AltC Sponsor LLC. The following discussion and analysis of
the Company's financial condition and results of operations should be read in
conjunction with the financial statements and the notes thereto contained
elsewhere in this Quarterly Report. Certain information contained in the
discussion and analysis set forth below includes forward-looking statements that
involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act
that are not historical facts and involve risks and uncertainties that could
cause actual results to differ materially from those expected and projected. All
statements, other than statements of historical fact included in this Form 10-Q
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
completion of the Proposed Business Combination (as defined below), the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"expect," "believe," "anticipate," "intend," "estimate," "seek" and variations
and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future
performance, but reflect management's current beliefs, based on information
currently available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and results
discussed in the forward-looking statements, including that the conditions of
the Proposed Business Combination are not satisfied. For information identifying
important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements, please refer to the Risk
Factors section of the Company's Annual Report on Form 10-K as filed with the
U.S. Securities and Exchange Commission (the "SEC"). The Company's securities
filings can be accessed on the EDGAR section of the SEC's website at
www.sec.gov. Except as expressly required by applicable securities law, the
Company disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information, future events
or otherwise.
Overview
We are a blank check company incorporated in Delaware on February 1, 2021 for
the purpose of effecting a merger, stock exchange, asset acquisition, stock
purchase, reorganization or similar Business Combination with one or more
businesses. We intend to effectuate our Business Combination using cash derived
from the proceeds of the Initial Public Offering and the sale of the Private
Placement Shares, our shares, debt or a combination of cash, shares and debt.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a Business
Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from February 1, 2021 (inception) through September 30, 2022
were organizational activities, those necessary to prepare for the Initial
Public Offering, described below, and subsequent to the Initial Public Offering,
identifying a target company for our Business Combination. We do not expect to
generate any operating revenues until after the completion of our Business
Combination. We generate non-operating income in the form of interest income on
marketable securities held in the Trust Account. We incur expenses as a result
of being a public company (for legal, financial reporting, accounting and
auditing compliance), as well as for due diligence expenses.
For the three months ended September 30, 2022, we had a net income of
$1,474,130, which consists of interest earned on marketable securities held in
the Trust Account of $2,354,571 and an unrealized gain on marketable securities
held in our Trust Account of $56,746, offset by a provision for income taxes of
$534,571 and operating costs of $402,616.
For the nine months ended September 30, 2022, we had a net income of $1,140,255,
which consists of interest earned on marketable securities held in the Trust
Account of $ 3,184,242, offset by operating costs of $1,362,475, a provision for
income taxes of $626,686 and unrealized loss on marketable securities held in
our Trust Account of $54,826.
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For the three months ended September 30, 2021, we had net loss of $535,181,
which consists of unrealized loss on marketable securities held in Trust Account
of $7,051 and formation and operating costs of $569,025, offset by interest
earned on marketable securities held in Trust Account of $40,895.
For the period from February 1, 2021 (inception) through September 30, 2021, we
had net loss of $536,181, which consists of unrealized loss on marketable
securities held in Trust Account of $7,051 and formation and operating costs of
$570,025, offset by interest earned on marketable securities held in Trust
Account of $40,895.
Liquidity, Capital Resources and Going Concern
On July 12, 2021, we completed the Initial Public Offering of 50,000,000 Public
Shares, which includes the full exercise by the underwriters of their
over-allotment option in the amount of 5,000,000 Public Shares, at $10.00 per
Public Share, generating gross proceeds of $500,000,000. Simultaneously with the
closing of the Initial Public Offering, we completed the sale of 1,450,000
Private Placement Shares at a price of $10.00 per Private Placement Share in a
private placement to the Sponsor, generating gross proceeds of $14,500,000.
Following the Initial Public Offering, the exercise of the over-allotment option
and the sale of the Private Placement Shares, a total of $500,000,000 was placed
in the Trust Account. We incurred $26,652,125 of transaction costs, consisting
of $8,580,000 of underwriting fees, which is net of $1,420,000 reimbursed fees
from the underwriters, $17,500,000 of deferred underwriting fees and $572,125 of
other offering costs. In addition, $5,285,860 of cash was held outside of the
Trust Account and is available for working capital purposes.
For the nine months ended September 30, 2022, cash used in operating activities
was $747,869. The net income of $1,140,255 was affected by interest earned on
marketable securities held in the Trust Account $3,184,242 and unrealized gain
on marketable securities held in our Trust Account of $54,826. Changes in
operating assets and liabilities provided $1,241,292 of cash for operating
activities.
For the period from February 1, 2021 (inception) through September 30, 2021,
cash used in operating activities was $1,775,680. Net loss of $536,181 was
affected by interest earned on marketable securities held in Trust Account
$40,895 and unrealized loss on marketable securities held in Trust Account
$7,051. Changes in operating assets and liabilities used $1,374,070 of cash for
operating activities.
As of September 30, 2022, we had marketable securities held in the Trust Account
of $503,254,886 (including approximately $3,254,886 of interest income)
consisting of U.S. Treasury Bills with a maturity of 185 days or less. Interest
income on the balance in the Trust Account may be used by us to pay taxes.
Through September 30, 2022, we have not withdrawn any interest earned from the
Trust Account.
We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account (less
deferred underwriting commissions and income taxes payable), to complete our
Business Combination. To the extent that our capital stock or debt is used, in
whole or in part, as consideration to complete our 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.
As of September 30, 2022, we had cash of $2,589,181. We intend to use the funds
held outside the Trust Account primarily to 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.
In order to finance transaction costs in connection with a Business Combination,
the Sponsor, an affiliate of the Sponsor, or the Company's officers and
directors may, but are not obligated to, loan the Company funds as may be
required ("Working Capital Loans"). If the Company completes a Business
Combination, the Company would repay the Working Capital Loans out of the
proceeds of the Trust Account released to the Company. In the event that a
Business Combination does not close, the Company may use a portion of proceeds
held outside the Trust Account to repay the Working Capital Loans but no
proceeds held in the Trust Account would be used to repay the Working Capital
Loans. Except for the foregoing, the terms of such Working Capital Loans, if
any, have not been determined and no written agreements exist with respect to
such loans. The Working Capital Loans would either be repaid upon consummation
of a Business Combination, without interest, or, at the lender's discretion, up
to $1,500,000 of such Working Capital Loans may be
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convertible into shares of the post-business combination entity at a price of
$10.00 per share. These shares would be identical to the Private Placement
Shares.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business, undertaking in-depth due diligence
and negotiating a 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 Business Combination. Moreover, we may need to obtain additional
financing either to complete our Business Combination or because we become
obligated to redeem a significant number of our Public Shares upon consummation
of our Business Combination, in which case we may issue additional securities or
incur debt in connection with such Business Combination.
In connection with the Company's assessment of going concern considerations in
accordance with ASC Subtopic 205-40, Presentation of Financial Statements- Going
Concern, the Company has until July 12, 2023 (or by October 12, 2023, if the
Company has an executed letter of intent, agreement in principle or definitive
agreement for a Business Combination by July 12, 2023) to consummate a Business
Combination. It is uncertain that the Company will be able to consummate a
Business Combination by this time. If a Business Combination is not consummated
by this date and an extension not obtained by the Sponsor, there will be a
mandatory liquidation and subsequent dissolution of the Company. Management has
determined that the potential mandatory liquidation and subsequent dissolution
raises substantial doubt about the Company's ability to continue as a going
concern. No adjustments have been made to the carrying amounts of assets or
liabilities should the Company be required to liquidate after July 12, 2023 (or
by October 12, 2023, if the Company has an executed letter of intent, agreement
in principle or definitive agreement for a Business Combination by July 12,
2023). The Company intends to complete a Business Combination before the
mandatory liquidation date.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of September 30, 2022. We do not participate
in transactions that create relationships with unconsolidated entities or
financial partnerships, often referred to as variable interest entities, which
would have been established for the purpose of facilitating off-balance sheet
arrangements. We have not entered into any off-balance sheet financing
arrangements, established any special purpose entities, guaranteed any debt or
commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
The Company agreed, commencing on July 8, 2021 through the earlier of the
Company's consummation of a Business Combination and its liquidation, to pay an
affiliate of the Sponsor a total of $30,000 per month for office space,
administrative and support services.
The underwriters are entitled to a deferred fee of $0.35 per Public Share, or
$17,500,000 in the aggregate. The deferred fee will become payable to the
underwriter from the amounts held in the Trust Account solely in the event that
the Company completes a Business Combination, subject to the terms of the
underwriting agreement.
Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have identified the following critical accounting policies.
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible conversion in
accordance with the guidance in Accounting Standards Codification ("ASC") Topic
480 "Distinguishing Liabilities from Equity." Shares of Class A common stock
subject to mandatory redemption is classified as a liability instrument and
measured at fair value. Conditionally redeemable common stock (including common
stock that features redemption rights that are either within the control of the
holder or subject to redemption upon the occurrence of uncertain events not
solely within our control) is classified as temporary equity. At all other
times, common stock is classified as stockholders' equity. Our Class A common
stock features certain redemption rights that are considered to be outside of
our control and
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subject to occurrence of uncertain future events. Accordingly, Class A common
stock subject to possible redemption is presented at redemption value as
temporary equity, outside of the stockholders' deficit section of our condensed
balance sheets.
Net Income (Loss) Per Common Share
Net income (loss) per common share is computed by dividing net income (loss) by
the weighted average number of common shares outstanding during the period.
Remeasurement associated with the redeemable shares of Class A common stock is
excluded from earnings per share as the redemption value approximates fair
value.
Recent Accounting Standards
The Company's management does not believe that any recently issued, but not yet
effective, accounting standards, if currently adopted, would have a material
effect on our condensed financial statements.
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