Amprius Technologies(AMPX) - 2022 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This part presents the unaudited condensed financial statements and management's discussion and analysis for Kensington Capital Acquisition Corp. IV Item 1. Condensed Financial Statements This section presents the unaudited condensed financial statements for Kensington Capital Acquisition Corp. IV, including the balance sheets, statements of operations, changes in shareholders' deficit, and cash flows, along with detailed notes explaining the company's organization, significant accounting policies, IPO details, related party transactions, commitments, share structure, warrants, and fair value measurements Condensed Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and shareholders' deficit at specific reporting dates Condensed Balance Sheets | Assets/Liabilities | June 30, 2022 (Unaudited) | December 31, 2021 | |:-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:--------------------------|:------------------| | Total Assets | $232,593,001 | $384,394 | | Cash | $1,966,389 | $77,151 | | Investments held in Trust Account | $230,294,899 | — | | Total Liabilities | $20,744,046 | $418,705 | | Derivative warrant liabilities | $11,310,000 | — | | Deferred underwriting fees | $8,050,000 | — | | Class A ordinary shares subject to possible redemption | $230,194,899 | — | | Total Shareholders' Deficit | $(18,345,944) | $(34,311) | - Total assets significantly increased from $384,394 at December 31, 2021, to $232.6 million at June 30, 2022, primarily due to the proceeds from the Initial Public Offering and Private Placement being placed into the Trust Account[10] - Total liabilities also saw a substantial increase, driven by the recognition of derivative warrant liabilities ($11.31 million) and deferred underwriting fees ($8.05 million) following the IPO[10] Unaudited Condensed Statements of Operations This section outlines the company's financial performance over specific periods, highlighting net income or loss and key revenue and expense drivers Unaudited Condensed Statements of Operations | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Period From March 19, 2021 (Inception) Through June 30, 2021 | |:--------------------------------------------------------------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------------------------------------| | General and administrative expenses | $1,611,750 | $10,102 | $1,706,154 | $35,924 | | Administrative expenses - related party | $60,000 | — | $80,000 | — | | Loss from operations | $(1,671,750) | $(10,102) | $(1,786,154) | $(35,924) | | Change in fair value of derivative warrant liabilities | $4,290,000 | — | $4,680,000 | — | | Income from investments held in Trust Account | $262,416 | — | $294,965 | — | | Offering costs associated with derivative warrant liabilities | $338 | — | $(563,642) | — | | Total other income (expenses) | $4,552,754 | — | $4,411,323 | — | | Net income (loss) | $2,881,004 | $(10,102) | $2,625,169 | $(35,924) | | Basic net income per share, Class A ordinary share | $0.09 | — | $0.11 | — | | Diluted net income per share, Class A ordinary share | $0.09 | — | $0.11 | — | - The company reported a net income of $2.88 million for the three months ended June 30, 2022, a significant improvement from a net loss of $10,102 in the prior-year period, primarily driven by a non-cash gain from the change in fair value of derivative warrant liabilities and income from Trust Account investments[12][128] - For the six months ended June 30, 2022, net income was $2.63 million, compared to a net loss of $35,924 for the inception-to-date period in 2021, reflecting the impact of the IPO and subsequent financial activities[12][130] Unaudited Condensed Statements of Changes in Shareholders' Deficit This section tracks the changes in the company's shareholders' deficit over time, reflecting the impact of net income/loss and equity transactions Unaudited Condensed Statements of Changes in Shareholders' Deficit | Metric | December 31, 2021 | March 31, 2022 (Unaudited) | June 30, 2022 (Unaudited) | |:----------------------------------------------------------------------------------------------------------------------------------------|:------------------|:---------------------------|:--------------------------| | Total Shareholders' Deficit | $(34,311) | $(21,036,711) | $(18,345,944) | | Excess of cash received over fair value of private placement warrants | — | $1,440,000 | $1,440,000 | | Remeasurement of Class A ordinary shares subject to possible redemption amount | — | $(20,722,551)$ | $(20,917,450)$ | | Net income (loss) | $(59,311)$ | $(255,835)$ | $2,881,004 | - The total shareholders' deficit increased significantly from $(34,311) at December 31, 2021, to $(18.35 million) at June 30, 2022, primarily due to the remeasurement of Class A ordinary shares subject to possible redemption[15] - Net income for the three months ended June 30, 2022, partially offset the accumulated deficit[15] Unaudited Condensed Statements of Cash Flows This section details the cash inflows and outflows from operating, investing, and financing activities, showing the overall change in cash Unaudited Condensed Statements of Cash Flows | Cash Flow Activity | Six Months Ended June 30, 2022 | Period From March 19, 2021 (Inception) Through June 30, 2021 | |:--------------------------------------------------------------------------------------------------------------------------------------------|:-------------------------------|:-------------------------------------------------------------| | Net cash used in operating activities | $(977,067)$ | — | | Net cash used in investing activities | $(230,000,000)$ | — | | Net cash provided by financing activities | $232,866,305 | — | | Net change in cash | $1,889,238 | — | | Cash - end of the period | $1,966,389 | — | - For the six months ended June 30, 2022, the company experienced significant cash flows from financing activities ($232.87 million) due to the IPO and private placement, which were largely offset by cash used in investing activities ($230 million) for deposits into the Trust Account[20] - Net cash used in operating activities was $(977,067) for the six months ended June 30, 2022[20] Notes to Unaudited Condensed Financial Statements This section provides detailed explanations and disclosures supporting the condensed financial statements, clarifying accounting policies and significant events Note 1. Description of Organization, Business Operations and Liquidation This note describes the company's formation, IPO, use of proceeds, business combination timeline, and status as an emerging growth company - Kensington Capital Acquisition Corp. IV was incorporated on March 19, 2021, as a Cayman Islands exempted company, formed for the purpose of effecting a business combination[22] - The company consummated its Initial Public Offering (IPO) on March 4, 2022, selling 23,000,000 units at $10.00 per unit, generating gross proceeds of $230.0 million[24] - Simultaneously with the IPO, a private placement of 16,000,000 warrants at $0.50 each generated $8.0 million[25] - $230.0 million of net proceeds from the IPO and private placement were placed in a Trust Account, to be invested in U.S. government securities or money market funds[27] - The company must complete a business combination within 24 months (by March 4, 2024) or it will liquidate and redeem public shares[35] - As an 'emerging growth company' under the JOBS Act, the company has elected to delay adoption of new or revised financial accounting standards[38][39] - As of June 30, 2022, the company had approximately $2.0 million in cash and $1.0 million in working capital, with $200,000 outstanding under a Working Capital Loan from a related party[43][44] - On May 11, 2022, the company entered into a business combination agreement with Amprius Technologies, Inc. (the 'Proposed Transactions')[48] Note 2. Summary of Significant Accounting Policies This note outlines the key accounting principles and methods used in preparing the financial statements, including fair value measurements and warrant accounting - The unaudited condensed financial statements are prepared in conformity with GAAP for interim financial information and SEC regulations[49] - Investments held in the Trust Account are classified as trading securities or money market funds and recognized at fair value, with gains/losses included in income[55] - Fair value measurements follow a three-tier hierarchy (Level 1, 2, 3), prioritizing observable inputs[57] - Derivative warrant liabilities (Class 1 and Private Placement Warrants) are recognized at fair value and adjusted each reporting period, with changes in fair value recognized in earnings[59][60] - Offering costs associated with derivative warrant liabilities are expensed as incurred, while those for Public Shares are charged to temporary equity[64] - Class A ordinary shares subject to possible redemption are classified outside of permanent equity (temporary equity) and adjusted to redemption value at each reporting period[65] - The company is a Cayman Islands entity and is not subject to income taxation by the Government of the Cayman Islands[71] - Net income (loss) per ordinary share is calculated by dividing net income by weighted average shares outstanding, with Class A and Class B shares sharing pro rata[72] Note 3. Initial Public Offering This note details the terms and proceeds of the company's IPO, including the structure of units and warrants - The IPO on March 4, 2022, involved 23,000,000 units at $10.00 each, generating $230.0 million gross proceeds and incurring $13.3 million in offering costs, including $8.1 million in deferred underwriting fees[77] - Each unit consists of one Class A ordinary share, one Class 1 Warrant, and one Class 2 Warrant, with warrants exercisable at $11.50 per share 30 days after a business combination[78] - Class 1 Warrants began separate trading on April 22, 2022, while Class 2 Warrants remain attached to Class A ordinary shares until the business combination[79] Note 4. Related Party Transactions This note discloses transactions and agreements with related parties, including the Sponsor and affiliates, and their financial impact - The Sponsor paid $25,000 for offering costs in exchange for 9,857,142 Class B ordinary shares (Founder Shares), which represent 30.0% of outstanding ordinary shares after the IPO[82] - The Sponsor purchased 16,000,000 Private Placement Warrants at $0.50 each, generating $8.0 million, with proceeds added to the Trust Account[84] - The Sponsor provided a promissory note for up to $300,000, of which $200,000 was drawn and converted into a Working Capital Loan on March 4, 2022[85] - Working Capital Loans may be converted into warrants identical to Private Placement Warrants at $0.50 per warrant[86] - A service agreement with DEHC LLC (an affiliate of the CFO) entails monthly fees of $20,000 for 18 months, with $60,000 and $80,000 incurred for the three and six months ended June 30, 2022, respectively[88] Note 5. Commitments and Contingencies This note outlines the company's contractual obligations, including registration rights and deferred underwriting commissions - Holders of Founder Shares, Private Placement Warrants, and warrants from Working Capital Loans are entitled to registration rights, with the company bearing associated expenses[90] - Underwriters received a $4.6 million discount at IPO closing and are due $8.1 million in deferred underwriting commissions upon completion of a business combination, subject to forfeiture based on redemptions[91] Note 6. Redeemable Class A Ordinary Shares and Shareholders' Deficit This note describes the company's share capital structure, focusing on the redeemable nature of Class A ordinary shares and their impact on equity - The company is authorized to issue 1,000,000 preference shares (none outstanding), 100,000,000 Class A ordinary shares (23,000,000 outstanding and subject to redemption), and 10,000,000 Class B ordinary shares (9,857,142 outstanding)[92][93] - Class A ordinary shares are classified as temporary equity due to their redemption feature[92] - Class B ordinary shares have special voting rights prior to a business combination (electing directors) and convert to Class A shares on a one-for-one basis upon business combination, subject to adjustment[94][95] Note 7. Warrants This note provides details on the various types of warrants issued, their exercisability, redemption terms, and transfer restrictions - As of June 30, 2022, there are 46,000,000 Public Warrants (23M Class 1, 23M Class 2) and 16,000,000 Private Placement Warrants outstanding[96] - Public Warrants become exercisable 30 days after a business combination at $11.50 per share, provided a registration statement is effective[97][99] - Private Placement Warrants are non-redeemable, exercisable on a cashless basis, and have transfer restrictions[100] - The company may redeem outstanding warrants for $0.01 per warrant if Class A ordinary share price equals or exceeds $18.00 for 20 trading days within a 30-day period[100] Note 8. Fair Value Measurements This note explains the methodologies and inputs used to determine the fair value of financial instruments, particularly investments and derivative warrant liabilities Fair Value Measurements | Description | Level 1 (Quoted Prices in Active Markets) | Level 2 (Significant Observable Other Inputs) | Level 3 (Significant Other Unobservable Inputs) | |:--------------------------------------------------|:------------------------------------------|:----------------------------------------------|:------------------------------------------------| | Investments held in Trust Account-U.S. Treasury | $230,291,764 | — | — | | Derivative warrant liabilities-Class 1 Warrants | $6,670,000 | — | — | | Derivative warrant liabilities-Private Placement Warrants | — | — | $4,640,000 | - Investments in U.S. government securities are Level 1 assets. Class 1 Warrants were transferred from Level 3 to Level 1 in April 2022 due to separate listing and trading[105][106] - Private Placement Warrants are valued using a Black-Scholes option pricing model (Level 3 inputs), while Class 1 Warrants were initially valued using a Monte Carlo simulation model[106][107] - The fair value of derivative warrant liabilities decreased from $15.6 million at March 31, 2022, to $4.64 million at June 30, 2022, after transferring Class 1 Warrants to Level 1 and further changes in fair value[112] Note 9. Subsequent Events This note confirms the evaluation of events occurring after the reporting period and their impact on the financial statements - The company evaluated subsequent events up to the financial statement issuance date and identified no events requiring adjustment or disclosure[113] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. This section provides management's perspective on the company's financial condition and operational results, reiterating its status as a blank check company, details of its IPO and private placement, liquidity, and the financial performance for the reported periods. It also discusses critical accounting policies and the company's status as an emerging growth company under the JOBS Act Cautionary Note Regarding Forward-Looking Statements This note advises that the report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ - The report includes forward-looking statements subject to known and unknown risks, uncertainties, and assumptions that may cause actual results to differ materially[116] Overview This section provides a high-level summary of the company's purpose as a blank check company, its IPO, and the timeline for a business combination - Kensington Capital Acquisition Corp. IV is a blank check company incorporated on March 19, 2021, for the purpose of a business combination[117] - The company completed its IPO on March 4, 2022, raising $230.0 million gross proceeds, and a private placement raising $8.0 million, with $230.0 million placed in a Trust Account[119][120][121] - The company has until March 4, 2024, to complete a business combination, after which it will liquidate and redeem public shares[123] Liquidity and Capital Resources This section discusses the company's cash position, sources of liquidity, and management's assessment of its ability to meet financial obligations - As of June 30, 2022, the company had approximately $2.0 million in cash and $1.0 million in working capital[124] - Liquidity needs are met by net proceeds from the IPO and private placement held outside the Trust Account, and potentially Working Capital Loans from the Sponsor or affiliates[125] - Management believes the company has sufficient working capital and borrowing capacity for at least one year or until a business combination is consummated[126] Results of Operations This section analyzes the company's financial performance, focusing on key drivers of net income or loss for the reported periods Results of Operations | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Period From March 19, 2021 (Inception) Through June 30, 2021 | |:--------------------------------------------------------------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------------------------------------| | Net income (loss) | $2,881,004 | $(10,102) | $2,625,169 | $(35,924) | | Change in fair value of derivative warrant liabilities | $4,290,000 | — | $4,680,000 | — | | Income from investments held in Trust Account | $262,416 | — | $294,965 | — | | General and administrative expenses | $1,611,750 | $10,102 | $1,706,154 | $35,924 | - The company reported a net income of approximately $2.9 million for the three months ended June 30, 2022, primarily due to a non-cash gain from derivative warrant liabilities and Trust Account income[128] - For the six months ended June 30, 2022, net income was approximately $2.6 million, driven by similar factors[130] Contractual Obligations This section details the company's significant contractual commitments, including deferred underwriting fees and service agreements - The company has registration rights agreements for Founder Shares, Private Placement Warrants, and warrants from Working Capital Loans[131] - Deferred underwriting commissions of $8.1 million are payable upon completion of a business combination[132] - A service agreement requires monthly payments of $20,000 to an affiliate of the CFO for 18 months[133] Critical Accounting Policies and Estimates This section highlights the accounting policies requiring significant judgment and estimation, such as derivative financial instruments and redeemable shares - Critical accounting policies include the valuation of derivative financial instruments (warrants), working capital loans, offering costs, and Class A ordinary shares subject to possible redemption[136][138][140][141] - Derivative warrant liabilities are measured at fair value using Monte Carlo simulation or Black-Scholes option pricing models, with changes recognized in earnings[137] - Class A ordinary shares subject to redemption are classified as temporary equity and adjusted to redemption value at each reporting period[141][143] Off-Balance Sheet Arrangements This section confirms the absence of any off-balance sheet arrangements that could materially impact the company's financial position - As of June 30, 2022, the company did not have any off-balance sheet arrangements[147] JOBS Act This section explains the company's status as an emerging growth company under the JOBS Act and its election regarding accounting standards adoption - As an 'emerging growth company' under the JOBS Act, the company has elected to delay the adoption of new or revised accounting standards to align with private company effective dates[148] - The company is evaluating other reduced reporting requirements provided by the JOBS Act, such as exemptions from auditor's attestation reports on internal controls and certain executive compensation disclosures[149] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Kensington Capital Acquisition Corp. IV is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[151] Item 4. Controls and Procedures This section confirms the effectiveness of the company's disclosure controls and procedures as of June 30, 2022, and states that there have been no material changes in internal control over financial reporting during the most recently completed fiscal quarter - The company's disclosure controls and procedures were effective as of June 30, 2022[153] - There have been no material changes in internal control over financial reporting during the most recently completed fiscal quarter[153] PART II. OTHER INFORMATION This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits Item 1. Legal Proceedings The company reported no legal proceedings - There are no legal proceedings to report[154] Item 1A. Risk Factors The company stated that there have been no material changes to the risk factors previously disclosed in its final prospectus - No material changes to the risk factors disclosed in the final prospectus relating to the Initial Public Offering[154] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds - There were no unregistered sales of equity securities or use of proceeds to report[154] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - There were no defaults upon senior securities to report[156] Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[156] Item 5. Other Information The company reported no other information - There is no other information to report[156] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including the Business Combination Agreement, Sponsor Support Agreement, Stockholder Support Agreement, and various certifications - Key exhibits include the Business Combination Agreement, Sponsor Support Agreement, and Stockholder Support Agreement, all dated May 11, 2022[157] - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 are also included[157] SIGNATURE This section contains the official signature and date of the report's filing by the principal executive officer - The report was signed on August 12, 2022, by Justin Mirro, Chief Executive Officer (Principal Executive Officer) of Kensington Capital Acquisition Corp. IV[160]