Advent(ADN) - 2019 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Financial Statements The unaudited condensed financial statements as of June 30, 2019, provide a snapshot of the company's financial position and performance Condensed Balance Sheet Data (as of June 30, 2019) | Metric | June 30, 2019 (Unaudited) | December 31, 2018 | | :--- | :--- | :--- | | Cash and cash equivalents held in Trust Account | $223,336,547 | $221,060,045 | | Total Assets | $224,065,917 | $222,076,149 | | Total Liabilities | $8,322,174 | $7,965,591 | | Common stock subject to possible redemption | $210,743,740 | $209,110,550 | | Total Stockholders' Equity | $5,000,003 | $5,000,008 | Condensed Statement of Operations Data | Period | Other Income (Dividends & Interest) | Loss from Operations | Net Income | | :--- | :--- | :--- | :--- | | Three Months Ended June 30, 2019 | $1,270,690 | $(153,620) | $842,931 | | Six Months Ended June 30, 2019 | $2,531,081 | $(394,757) | $1,633,185 | Condensed Statement of Cash Flows (Six Months Ended June 30, 2019) | Cash Flow Activity | Amount | | :--- | :--- | | Net cash used in operating activities | $(501,571) | | Net cash provided by investing activities | $254,579 | | Net cash provided by financing activities | $0 | | Net Change in Cash | $(246,992) | Notes to Condensed Financial Statements Detailed disclosures support the financial statements, outlining accounting policies, IPO details, and stockholders' equity structure Note 1 - Organization and Business Operations AMCI Acquisition Corp operates as a blank-check company focused on the natural resource sectors with a May 2020 deadline for a business combination - The Company is a special purpose acquisition company (SPAC) intending to focus its search for a business combination on companies in the global natural resource infrastructure, value chain, and logistics-related sectors[20] - The Company consummated its Initial Public Offering in November 2018, raising gross proceeds of $200 million from 20 million units, with an additional $20.5 million from an over-allotment option[21][23] - The Company has until May 20, 2020 (the "Combination Period") to complete a Business Combination, or it will be required to cease operations, redeem public shares, and dissolve[30] Note 2 - Summary of Significant Accounting Policies Key accounting policies include using the extended transition period for new standards and classifying redeemable common stock as temporary equity - The Company is an "emerging growth company" under the JOBS Act and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[37][38] - Common stock subject to possible redemption is classified as temporary equity outside of the stockholders' equity section, as redemption is outside the Company's control[43] - Net loss per share is calculated using the two-class method, excluding shares subject to possible redemption from the basic calculation as they only participate in Trust Account earnings[44] Note 3 & 4 – Initial Public Offering and Private Placement Warrants The company sold over 22 million units in its IPO and concurrently sold over 5.9 million non-redeemable warrants to its Sponsor - The Company sold 22,052,077 units at $10.00 per unit in its IPO, with each unit including one Class A common stock and one redeemable warrant to purchase a share at $11.50[56] - Simultaneously with the IPO, the Sponsor purchased an aggregate of 5,910,416 Private Placement Warrants at $1.00 each, which will expire worthless if a Business Combination is not completed[57] Note 5 - Related Party Transactions The Sponsor purchased founder shares for $25,000, provides administrative services for a monthly fee, and may offer convertible working capital loans - The Sponsor purchased 5,750,000 Class B Founder Shares for an aggregate price of $25,000[59] - The Company pays an affiliate of the Sponsor $10,000 per month for office space and administrative support, totaling $60,000 for the six months ended June 30, 2019[62] - The Sponsor may provide Working Capital Loans, of which up to $1,500,000 may be convertible into warrants at $1.00 per warrant[64] Note 6 – Commitments The company has granted registration rights to certain security holders and has deferred fee payments contingent on a business combination - Holders of Founder Shares and Private Placement Warrants are entitled to registration rights for the resale of their securities after a Business Combination[65] - The Company has deferred payments to a legal firm and a transfer agent totaling $25,708 as of June 30, 2019, which are contingent upon the consummation of a Business Combination[67] Note 7 - Stockholders' Equity The company's equity structure includes Class A and Class B common shares, with specific conversion and redemption features for its warrants - As of June 30, 2019, there were 1,186,360 shares of Class A common stock and 5,513,019 shares of Class B common stock issued and outstanding (excluding shares subject to redemption)[69] - Class B common stock will automatically convert into Class A common stock on a one-for-one basis at the time of a Business Combination, subject to anti-dilution adjustments[70] - Public Warrants may be redeemed by the Company for $0.01 per warrant if the Class A common stock price equals or exceeds $18.00 per share for any 20 trading days within a 30-day period[74] Note 8 - Fair Value Measurements Assets held in the Trust Account are classified as Level 1 fair value measurements based on quoted prices in active markets - Assets held in the Trust Account are measured at fair value and are classified as Level 1, based on quoted prices in active markets for identical assets[82][83] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses the company's limited operational history, with income derived from trust account interest and sufficient liquidity for its search period Results of Operations The company generated no operating revenue, with net income for the first half of 2019 driven by interest income from its trust account Net Income Summary | Period | Net Income/(Loss) | Key Components | | :--- | :--- | :--- | | Three Months Ended June 30, 2019 | $842,931 | $1.27M interest income, offset by operating costs and taxes | | Six Months Ended June 30, 2019 | $1,633,185 | $2.53M interest income, offset by operating costs and taxes | | Inception (June 18, 2018) to June 30, 2018 | $(2,600) | Operating costs | Liquidity and Capital Resources The company's liquidity is sourced from cash held outside the trust and potential sponsor loans, deemed sufficient through May 20, 2020 - As of June 30, 2019, the Company had $639,287 in cash held outside the trust account and working capital of $698,473[99] - The Sponsor may provide working capital loans up to $1,500,000 to fund transaction costs, which may be convertible into warrants[100] - Management believes the Company has sufficient liquidity to meet its anticipated obligations through May 20, 2020[101][102] Critical Accounting Policies Critical accounting policies involve the classification of redeemable common stock as temporary equity and the use of the two-class method for EPS - Common stock subject to possible redemption is classified as temporary equity because the redemption features are outside of the Company's control[107] - Net loss per common share is computed using the two-class method, excluding shares subject to redemption from the basic loss per share calculation[108] Quantitative and Qualitative Disclosures about Market Risk The company has no material market or interest rate risk as its trust account funds are invested in short-term U.S. government treasury obligations - The Company's funds held in the trust account are invested in money market funds holding U.S. government treasury obligations, resulting in no material exposure to interest rate risk[109] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2019, with no material changes in internal controls - Management concluded that as of June 30, 2019, the Company's disclosure controls and procedures were effective[111] - There were no material changes in the Company's internal control over financial reporting during the quarter ended June 30, 2019[112] PART II – OTHER INFORMATION Legal Proceedings and Risk Factors The company reports no legal proceedings and no material changes to its previously disclosed risk factors - The Company has no legal proceedings to report[113] - There have been no material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K[113] Unregistered Sales of Equity Securities and Use of Proceeds Proceeds from the IPO and private warrant placement were primarily deposited into a trust account after deducting underwriting fees and offering costs - Simultaneously with the IPO, the Company sold 5,910,416 Private Placement Warrants to the Sponsor at $1.00 each, which was an unregistered sale exempt under Section 4(a)(2) of the Securities Act[115] - Of the gross proceeds from the IPO and private placement, $220,520,770 was placed in a trust account, while the company paid $4,410,416 in underwriting fees and $524,623 in other costs[117] Other Items The company reports no defaults on senior securities, no mine safety disclosures, and no other material information for the period - The Company reports no defaults upon senior securities, no mine safety disclosures, and no other material information under Item 5[117]