Fundraising and Financial Position - The company raised a total of $300 million from its Initial Public Offering (IPO) by selling 30 million units at $10.00 per unit[19]. - An additional $45 million was generated from the sale of 4.5 million Over-Allotment Units at the same price during the over-allotment option exercise[21]. - The total amount held in the trust account after the IPO and over-allotment was approximately $345 million, including underwriters' deferred discounts[21]. - The company has up to $332.925 million available for a business combination after paying $12.075 million in deferred underwriting commissions[38]. - The anticipated cash amount in the trust account is approximately $10.00 per public share, which will be available for redemption by public stockholders[59]. - The company expects to have access to approximately $600,000 from the Initial Public Offering proceeds to cover potential claims and estimated liquidation costs of around $100,000[84]. - As of December 31, 2022, approximately $106,393 was available outside the trust account to fund working capital requirements[152]. - The company has up to $345,600,000 available from the Initial Public Offering and the sale of Private Placement Warrants to complete its business combination and pay related fees and expenses[198]. - $12,075,000 of the proceeds is allocated for payment of deferred underwriting commissions[198]. Business Combination Strategy - The company aims to focus on infrastructure and related sectors for its initial business combination, leveraging the significant investment trends in this area, which saw fundraising increase from $45 billion in 2007 to $98 billion in 2019 globally[24]. - The company intends to acquire businesses that exhibit positive top-line growth and have defensible business models with sustainable competitive advantages[26]. - The acquisition strategy will utilize the proprietary deal-sourcing capabilities of Apollo Global Management, aiming to build a focused business with multiple competitive advantages[25]. - The company plans to pursue targets in sectors such as telecommunications, transportation, waste management, and renewable energy, which are essential to society[25]. - The company intends to structure the initial business combination to acquire at least 50% of the outstanding voting securities of the target[44]. - The company may pursue Affiliated Joint Acquisition opportunities with Apollo Funds, which could involve co-investment in target businesses[102]. Regulatory and Compliance Considerations - The NYSE rules require that the initial business combination must have a fair market value equal to at least 80% of the net assets held in the trust account[29]. - The company is classified as an "emerging growth company" and can take advantage of certain exemptions from reporting requirements[35]. - The company must file annual, quarterly, and current reports with the SEC, ensuring transparency in financial reporting[113]. - The company must evaluate internal control procedures as required by the Sarbanes-Oxley Act, which may increase costs and time for acquisitions[115]. - The amended and restated certificate of incorporation requires a 65% approval from common stockholders for certain amendments, while other provisions require a 90% majority for director appointments[92]. Redemption Rights and Stockholder Approval - Public stockholders can redeem their shares of Class A common stock at a per-share price equal to the aggregate amount in the trust account divided by the number of outstanding public shares[59]. - A public stockholder is restricted from seeking redemption rights for more than 15% of the shares sold in the Initial Public Offering, referred to as "Excess Shares"[67]. - If stockholder approval is sought, a majority of the outstanding shares must vote in favor of the business combination for it to be approved, requiring at least 12,937,501 votes from the 34,500,000 public shares[63]. - The company intends to conduct redemptions with a stockholder vote unless not required by law, in which case it may use tender offer rules[61]. - The company will provide public stockholders with proxy materials and redemption rights if stockholder approval is sought[63]. Risks and Challenges - The company has not generated any revenue to date and is classified as a "shell company" as it has no operations other than searching for a business combination[17]. - The company may need to obtain additional financing to complete the initial business combination if the required cash exceeds the available funds[42]. - The company has not yet secured third-party financing for the business combination, and there is no assurance it will be available[38]. - The company may face bankruptcy risks, which could deplete the trust account and affect the ability to return $10.00 per share to public stockholders[90]. - The company may face challenges in negotiating business combinations due to the completion window requirement, which could limit due diligence time[133]. - The company may not be able to diversify its operations, making it solely dependent on the performance of a single business or a limited number of products[201]. - The company may face risks associated with combining with financially unstable businesses or those lacking an established record of revenue or earnings[185]. - The ability to complete a business combination may be complicated by economic downturns, geopolitical tensions, or increased capital costs[187]. Management and Conflicts of Interest - Certain management team members have fiduciary duties to Apollo Funds, which may lead to conflicts of interest in presenting business opportunities[97]. - Apollo and its affiliates may compete for acquisition opportunities, potentially limiting the company's options for suitable business combinations[98]. - Officers and directors are not required to commit full time to the company, leading to potential conflicts in time allocation among various business activities[103]. - The company may attempt to complete multiple business combinations simultaneously, which could increase costs and risks, negatively impacting operations and profitability[202]. Liquidation and Trust Account Concerns - If the initial business combination is not completed, the company will redeem public shares at a per-share price equal to the aggregate amount in the trust account, minus up to $100,000 for dissolution expenses[79]. - The company will not redeem public shares if it would cause net tangible assets to fall below $5,000,001, avoiding SEC's "penny stock" rules[60]. - If the trust account balance falls below $10.00 per public share due to creditor claims, the actual redemption amount may be less than $10.00[82]. - The company has not reserved funds for indemnification obligations related to claims against the trust account, raising concerns about the sponsor's ability to satisfy such obligations[84]. - If third parties bring claims against the company, the proceeds held in the trust account could be reduced, affecting the per-share redemption amount[162]. - Any distributions received by stockholders could be viewed as a "preferential transfer" or "fraudulent conveyance" in the event of bankruptcy, exposing the company to claims[168].
Acropolis Infrastructure Acquisition (ACRO) - 2022 Q4 - Annual Report