See accompanying notes to unaudited condensed consolidated financial statements.
See accompanying notes to unaudited condensed consolidated financial statements.
See accompanying notes to unaudited condensed consolidated financial statements.
See accompanying notes to unaudited condensed consolidated financial statements
See accompanying notes to unaudited condensed consolidated financial statements.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
On February 4, 2021 (“Closing Date”), AMCI Acquisition Corp. (“AMCI”), consummated the previously announced business combination (the “Business Combination”) pursuant to that certain merger
agreement (the “Agreement and Plan of Merger”), dated October 12, 2020, by and among AMCI, AMCI Merger Sub Corp., a Delaware corporation and newly formed wholly-owned subsidiary of AMCI (“Merger Sub”), AMCI Sponsor LLC (the “Sponsor”), solely
in the capacity as the representative from and after the effective time of the Business Combination for the stockholders of AMCI (the “Purchaser Representative”), Advent Technologies, Inc., a Delaware corporation (“Legacy Advent”), and
Vasillios Gregoriou, solely in his capacity as the representative from and after the effective time for the Legacy Advent stockholders (the “Seller Representative”), as amended by Amendment No. 1 and Amendment No. 2 to the Agreement and Plan of
Merger, dated as of October 19, 2020 and December 31, 2020, respectively, by and among AMCI, Merger Sub, Sponsor, Legacy Advent, and Seller Representative. In connection with the closing of the Business Combination (the “Closing”), AMCI
acquired 100% of the stock of Legacy Advent (as it existed immediately prior to the Closing) and its subsidiaries.
On the Closing Date, and in connection with the closing of the Business Combination, AMCI changed its name to Advent Technologies Holding, Inc. (the "Company" or "Advent"). Legacy Advent was
deemed the accounting acquirer in the Business Combination based on an analysis of the criteria outlined in Accounting Standards Codification ("ASC") 805. This determination was primarily based on Legacy Advent's stockholders prior to the
Business Combination having a majority of the voting interests in the combined company, Legacy Advent's operations comprising the ongoing operations of the combined company, Legacy Advent's board of directors comprising a majority of the board
of directors of the combined company, and Legacy Advent's senior management comprising the senior management of the combined company. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy Advent
issuing stock for the net assets of AMCI, accompanied by a recapitalization. The net assets of AMCI are stated at historical cost, with no goodwill or other intangible assets recorded.
While AMCI was the legal acquirer in the Business Combination, because Legacy Advent was deemed the accounting acquirer, the historical financial statements of Legacy Advent became the
historical financial statements of the combined company, upon the consummation of the Business Combination. As a result, the unaudited condensed consolidated financial statements included in this report reflect (i) the historical operating
results of Legacy Advent prior to the Business Combination; (ii) the results of the Company (combined results of AMCI and Legacy Advent) following the closing of the Business Combination; (iii) the assets and liabilities of Legacy Advent at
their historical cost; and (iv) Company’s equity structure for all periods presented.
In accordance with guidance applicable to these circumstances, the equity structure has been restated in all comparative periods up to the Closing Date, to reflect the number of shares of the
Company's common stock, $0.0001 par value per share ("Common Stock") issued to Legacy Advent's stockholders in connection with the recapitalization transaction. As such, the shares and corresponding capital amounts and earnings per share
related to Legacy Advent Preferred Stock (“Preferred Series A” and “Preferred Series Seed”) and Legacy Advent common stock prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio established in
the Business Combination Agreement. Activity within the statement of changes in stockholders' equity / (deficit) for the issuances of Legacy Advent's Preferred Stock, were also retroactively converted to Legacy Advent common stock. (Note 3)
On February 18, 2021, the Company, entered into a Membership Interest Purchase Agreement with Bren-Tronics, Inc. (“Seller”) and UltraCell, LLC, a Delaware limited liability
company and a direct wholly-owned subsidiary of Seller (“UltraCell”) (the “Purchase Agreement”). See Note 3 “Business Combination” accompanying the unaudited condensed consolidated financial statements for additional information.
(b)
|
Unaudited Condensed Consolidated Financial Statements
|
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and pursuant to the
regulations of the U.S. Securities and Exchange Commission (“SEC”). The unaudited financial information reflects, in the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair
statement of the Company's financial position, results of operations and cash flows for the periods indicated. The results reported for the interim period presented are not necessarily indicative of results that may be expected for the full
year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's audited consolidated financial statements as of and
for the year ended December 31, 2020 included in the Current Report on Form 8-K filed with the SEC on February 9, 2021 (the “Original Form 8-K”), as amended by Amendment No. 1 to Form 8-K, filed with the SEC on February 9, 2021 (“Amendment No.
1”), as further amended by Amendment No. 2 to Form 8-K, filed with the SEC on March 26, 2021 (“Amendment No. 2”) and as further amended by Amendment No 3 to Form 8-K, filed with the SEC on May 20, 2021 (“Amendment No. 3,” and, the Original Form
8-K, as so amended by Amendment No. 1, Amendment No. 2 and Amendment No. 3, the “Super Form 8-K”).
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated.
Certain prior period balances have been reclassified to conform to the current period presentation in the unaudited condensed consolidated financial statements and the accompanying notes.
Share and per share amounts are presented on a post-conversion basis for all periods presented, unless otherwise specified.
(c) Going Concern
The unaudited condensed consolidated financial statements have been prepared by management in accordance with GAAP, assuming that the Company will continue as a going concern, which
contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Accordingly, these financial statements do not include any adjustments that may result in the event the Company is
unable to continue as a going concern.
Beginning in March 2020, the COVID-19 pandemic and the measures imposed to contain this pandemic have disrupted and are expected to continue to impact the Company’s business. The magnitude of
the impact of the COVID-19 pandemic on the Company’s productivity, results of operations and financial position, and its disruption to the Company’s business (fuel cells sales timeline, realization of income from grants received) will depend in
part, on the length and severity of these restrictions and on the Company’s ability to conduct business in the ordinary course.
As of the date of this Quarterly Report on Form 10-Q, the Company’s existing cash resources are sufficient to support planned operations for the next 12 months. As a result, management
believes that the Company's existing financial resources are sufficient to continue operating activities for at least one year past the issuance date of the unaudited condensed consolidated financial statements.
2.
|
Summary of Significant Accounting Policies:
|
There have been no significant changes from the significant accounting policies disclosed in Note 2 of the “Notes to Consolidated Financial Statements” included in the Super Form 8-K.
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”). As an emerging
growth company (“EGC”), the JOBS Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies. The Company elected to use this
extended transition period under the JOBS Act until such time the Company is no longer considered to be an EGC. The Company applied the following new accounting policies:
(a)
|
Business acquisitions, Goodwill and Intangible Assets
|
The Company allocates the fair value of purchase consideration transferred in a business acquisition to the tangible assets acquired, liabilities assumed, and intangible assets acquired based
on their estimated fair values. The excess of the fair value of purchase consideration transferred over the fair values of these identifiable assets and liabilities is recorded as goodwill. In case the fair value of purchase consideration
transferred is below fair values of these identifiable assets and liabilities, the Company recognizes a gain from a bargain purchase. Such valuations require management to make significant estimates and assumptions, especially with respect to
intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired licenses, trade names, in process research and development ("R&D"), useful lives and
discount rates, patents, customer clientele, customer contracts and know-how. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result,
actual results may differ from estimates. During the measurement period, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement
period, any subsequent adjustments are recorded in the consolidated statement of operations.
For significant acquisitions, the Company obtains independent appraisals and valuations of the intangible (and certain tangible) assets acquired and certain assumed obligations. The Company
analyzes each acquisition individually and all acquisitions within each reporting period in aggregate to determine if those are material acquisitions in the context of ASC 805-10-50.
The estimated fair values and useful lives of identified intangible assets are based on many factors, including estimates and assumptions of future operating performance and cash flows of
the acquired business, estimates of cost avoidance, the nature of the business acquired, the specific characteristics of the identified intangible assets and our historical experience and that of the acquired business. The estimates and
assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including product demand, market conditions, regulations affecting the business model of our operations,
technological developments, economic conditions and competition.
We conduct a goodwill impairment analysis annually in the fourth fiscal quarter, as of October 1, and as necessary if changes in facts and circumstances indicate that the fair value of our
reporting units may be less than their carrying amounts. When indicators of impairment do not exist and certain accounting criteria are met, we are able to evaluate goodwill impairment using a qualitative approach. When necessary, our
quantitative goodwill impairment test consists of two steps. The first step requires that we compare the estimated fair value of our reporting units to the carrying value of the reporting unit’s net assets, including goodwill. If the fair
value of the reporting unit is greater than the carrying value of its net assets, goodwill is not considered to be impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value of its net
assets, we would be required to complete the second step of the test by analyzing the fair value of its goodwill. If the carrying value of the goodwill exceeds its fair value, an impairment charge is recorded. Currently, we identify one
reporting unit.
The Company may issue or assume common stock warrants with debt, equity or as a standalone financing instruments that are recorded as either liabilities or equity in accordance with the
respective accounting guidance. Warrants recorded as equity are recorded at their relative fair value or fair value determined at the issuance date and remeasurement is not required. Warrants recorded as liabilities are recorded at their fair
value, within warrant liability on the consolidated balance sheets, and remeasured on each reporting date with changes recorded in revaluation of warrant liability on the Company's consolidated statements of operations.
(c)
|
Fair Value of Financial Instruments
|
As a result of the Business Combination, the Company assumed a warrant liability (the "Warrant Liability") related to previously issued 3,940,278 warrants, each exercisable to purchase one
share of common stock at an exercise price of $11.50 per share, originally sold to AMCI Sponsor LLC (the “Sponsor”) in a private placement consummated in connection with AMCI’s Initial Public Offering (the “Private Placement Warrants”) and the
400,000 warrants, each exercisable to purchase one share of common stock at an exercise price of $11.50 per share, converted from the Sponsor’s non-interest bearing loan to the Company of $400,000 in connection with the closing of the Business
Combination (the “Working Capital Warrants”) (Note 10). The Private Placement Warrants and the Working Capital Warrants have substantially the same terms as the 22,052,077 warrants, each exercisable to purchase one share of common stock at an
exercise price of $11.50 per share, issued by AMCI in its Initial Public Offering (the “Public Warrants”). The Warrant Liability was remeasured to its fair value at each reporting period and upon settlement. The change in fair value was
recognized in revaluation of warrant liability on the consolidated statements of operations. The change in fair value of the Warrant Liability was as follows:
|
|
Warrant Liability
|
|
Estimated fair value at February 4, 2021
|
|
|
33,116,321
|
|
Change in estimated fair value
|
|
|
(9,765,625
|
)
|
Estimated fair value at March 31, 2021
|
|
|
23,350,695
|
|
The estimated fair value of the Private Placement Warrants and the Working Capital Warrants (each as defined below) is determined using Level 3 inputs by using the Black-Scholes model. The
application of the Black-Scholes model requires the use of a number of inputs and significant assumptions including volatility. Significant judgment is required in determining the expected volatility of our common stock. Due to the limited
history of trading of our common stock, we determined expected volatility based on a peer group of publicly traded companies.
The following table provides quantitative information regarding Level 3 fair value measurements inputs as their measurement dates:
Stock price
|
|
|
13.39
|
|
Exercise price (strike price)
|
|
|
11.50
|
|
Remaining term (in years)
|
|
|
4.84
|
|
Volatility
|
|
|
40
|
%
|
Risk-free interest rate
|
|
|
0.63
|
%
|
The Company performs routine procedures such as comparing prices obtained from independent source to ensure that appropriate fair values are recorded.
(d)
|
Earnings / (Loss) Per Share
|
Earnings / (Loss) Per Share is computed by dividing earnings / (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings / (loss) per share
reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted at the beginning of the periods presented, or issuance date, if later. The treasury stock method is used to
compute the dilutive effect of warrants.
(e)
|
Recent Accounting pronouncements
|
Recently issued accounting pronouncements not yet adopted
In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease
assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In July 2018, ASU 2018-10, Codification Improvements to Topic 842, Leases, was issued to provide more detailed guidance and additional
clarification for implementing ASU 2016-02. Furthermore, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides an optional transition method in addition to the existing modified retrospective
transition method by allowing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Additionally, ASU 2019-01, Codification Improvements to Topic 842, Leases and ASU 2020-02, Amendments to SEC
Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842), provided additional clarifications for implementing ASU 2016.02.
The new lease standard was originally effective for the private entities on January 1, 2021, with early adoption permitted. Following the issuance of ASU 2020-05, Effective Dates for Certain Entities (Topic 842), the effective date of Leases
was deferred for private entities (the “all other” category) to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early application continues to be permitted which means
that an entity may choose to implement Leases before those deferred effective dates. The Company is currently evaluating the effect of the adoption of this guidance on the consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments, which, amends the requirement on the
measurement and recognition of expected credit losses for financial assets held. Furthermore, amendments, ASU 2019-10 and ASU 2019-11 provided additional clarification for implementing ASU 2016-13. ASU 2016-13 is effective for the Company
beginning January 1, 2023, with early adoption permitted. The Company is currently in the process of evaluating the effect of this guidance on the consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for
income taxes. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. ASU 2019-12 is effective for the Company beginning January 1,
2022, with early adoption permitted. The Company is currently evaluating the effects of this guidance on the Company's financial statements.
(a)
|
AMCI Acquisition Corp.
|
As detailed in Note 1 on February 4, 2021, the Company and AMCI consummated the Business Combination pursuant to the terms of the merger agreement, with Advent Legacy surviving the merger as a wholly-owned
subsidiary of AMCI. Immediately prior to the closing of the Business Combination, all shares of outstanding preferred stock Series A and preferred stock Series Seed of Legacy Advent were automatically converted into shares of the Legacy
Advent's common stock. Upon the consummation of the Business Combination, each share of Legacy Advent common stock issued and outstanding was canceled and converted into the right to receive the amount of shares as determined based on the
merger consideration of $250 million minus the estimated consolidated indebtedness of Legacy Advent and its subsidiaries as of the consummation of the Business Combination, net of their estimated consolidated cash and cash equivalents (“Closing
Net Indebtedness”) divided by $10.00. The Closing Net Indebtedness was based solely on estimates determined shortly prior to the closing and was not subject to any post-closing true-up or adjustment.
Upon the closing of the Business Combination, AMCI's certificate of incorporation was amended and restated to, among other things, authorize the issuance of 111,000,000 shares, of which 110,000,000 shares are
shares of common stock, par value $0.0001 per share and 1,000,000 shares are shares of undesignated preferred stock, par value $0.0001 per share.
In connection with the execution of the Business Combination Agreement, AMCI entered into separate subscription agreements (each, a "Subscription Agreement") with a number of investors (each a "Subscriber"),
pursuant to which the Subscribers agreed to purchase, and AMCI agreed to sell to the Subscribers, an aggregate of 6,500,000 shares of common stock (the "PIPE Shares"), for a purchase price of $10.00 per share and an aggregate purchase price of
$65.0 million, in a private placement pursuant to the subscription agreements (the "PIPE"). The PIPE investment closed simultaneously with the consummation of the Business Combination.
The Business Combination is accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, AMCI was treated as the "acquired" company for financial reporting purposes. See
Note 1 "Basis of Presentation" in the accompanying unaudited condensed consolidated financial statements for further details. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy Advent issuing
stock for the net assets of AMCI, accompanied by a recapitalization. The net assets of AMCI are stated at historical cost, with no goodwill or other intangible assets recorded.
The following table reconciles the elements of the Business Combination to the consolidated statement of cash flows and the consolidated statement of changes in equity for the three month
ended March 31, 2021:
|
|
Recapitalization
|
|
Cash- AMCI’s trust and cash (net of redemptions)
|
|
$
|
93,310,599
|
|
Cash – PIPE plus interest
|
|
|
65,000,118
|
|
Less transaction costs and advisory fees paid
|
|
|
(17,617,601
|
)
|
Less non-cash warrant liability assumed
|
|
|
(33,116,321
|
)
|
Net Business Combination and PIPE financing
|
|
$
|
107,576,795
|
|
The number of shares of common stock issued immediately following the consummation of the Business Combination:
|
|
Recapitalization
|
|
Class A Common A stock of AMCI, outstanding prior to Business Combination
|
|
|
9,061,136
|
|
Less Redemption of AMCI shares
|
|
|
(1,606
|
)
|
Class B Common Stock of AMCI, outstanding prior to Business Combination
|
|
|
5,513,019
|
|
Shares issued in PIPE
|
|
|
6,500,000
|
|
Business Combination and PIPE financing shares
|
|
|
21,072,549
|
|
Legacy Advent Shares
|
|
|
25,033,398
|
|
Total shares of Common Stock immediately after Business Combination
|
|
|
46,105,947
|
|
On February 18, 2021 (the “acquisition date”), pursuant to the terms and conditions of the Purchase Agreement, the Company acquired 100% of the issued and outstanding membership units of
UltraCell from Bren-Tronics, Inc. The results of UltraCell’s operations have been included in the unaudited condensed consolidated financial statements since the acquisition date.
UltraCell is an entity specialized in lightweight fuel cells for the portable power market with mature products and cutting-edge technology.
The acquisition consideration transferred totaled $6.0 million, of which $4.0 million was cash and $2 million was the fair value of the contingent consideration. The contingent consideration arrangement
required the Company to pay $2 million of additional cash to UltraCell’s former holders of membership interests, if UltraCell entered into certain customer arrangements for sales of products prior to June 30, 2021. On April 16, 2021
Advent paid the additional consideration based on UltraCell achieving completion of the terms of the contingent consideration.
The estimated fair values of the assets acquired and liabilities assumed at the acquisition date was $5.5 million, resulting in the recognition of provisional goodwill of $0.5 million. The
Company is in the process of obtaining third-party valuations of certain intangible assets; thus, the provisional measurements of intangible assets and goodwill are subject to change.
The provisional value of $5 million of intangibles relates to trademarks, patents, customer relationships, customer contracts and know-how. Those intangibles mainly relate to definite-live
intangible assets with estimated useful lives that vary between 3-10 years, with the exception of contract backlogs which are amortized over the remaining period of the contracts assumed based on income approach. During the period from
acquisition and up to March 31, 2021, the Company has recognized in the condensed consolidated statement of operations amortization for those intangibles of $0.2 million.
4.
|
Related party disclosures:
|
The amounts included in the accompanying consolidated balance sheets and consolidated statements of operations are as follows:
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
Due to related parties
|
|
Unpaid
compensation
cost
|
|
|
Unpaid
compensation cost
|
|
Vassilios Gregoriou
|
|
$
|
-
|
|
|
$
|
613,971
|
|
Christos Kaskavelis
|
|
|
-
|
|
|
|
75,160
|
|
Emory Sayre De Castro
|
|
|
-
|
|
|
|
425,528
|
|
Total
|
|
$
|
-
|
|
|
$
|
1,114,659
|
|
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
Due from related parties
|
|
Prepayment
|
|
|
Prepayment
|
|
Charalampos Antoniou
|
|
$
|
-
|
|
|
$
|
67,781
|
|
Total
|
|
$
|
-
|
|
|
$
|
67,781
|
|
The outstanding balances as of December 31, 2020 due to/from Company’s executives and officers relating to unpaid compensation and prepaid services have been settled during the first quarter
of 2021.
The Company executives, Vassilis Gregoriou, Christos Kaskavelis, Emory Sayre De Castro, James Coffey and William Hunter, each received a signing bonus and transaction bonus upon the consummation of the merger
in an aggregate amount of $5.6 million, which is included in administrative and selling expenses in the statement of operations for the first quarter of 2021.
Inventories consist of the following:
|
|
March
31, 2021
|
|
|
December
31, 2020
|
|
Raw materials and supplies
|
|
$
|
812,744
|
|
|
$
|
107,939
|
|
Total
|
|
$
|
812,744
|
|
|
$
|
107,939
|
|
6.
|
Prepaid expenses and Other current assets:
|
Prepaid expenses and Other current assets are analyzed as follows:
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
VAT receivable
|
|
$
|
287,523
|
|
|
$
|
259,831
|
|
Grants receivable
|
|
|
91,182
|
|
|
|
95,064
|
|
Other current assets
|
|
|
891,168
|
|
|
|
140,126
|
|
Prepaid Expenses
|
|
|
2,851,681
|
|
|
|
1,724
|
|
Total
|
|
$
|
4,121,554
|
|
|
$
|
496,745
|
|
Prepaid expenses as of March 31, 2021 mainly include prepayments to insurers for director’s and officer’s insurance services.
Other current assets as of March 31, 2021 include amounts provided as guarantees for leases (Note 15) and prepayments to suppliers.
7.
|
Property and equipment, net:
|
During the three-month period ended March 31, 2021, $77,112 additions to property and equipment concern machinery, office and other equipment and the remaining additions to the account relate to property and
equipment acquired from UltraCell (Note 3). There are no collaterals or other commitments on the Company’s property and equipment.
8.
|
Trade and other payables:
|
|
|
December 31,
|
|
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
Trade payables and other payables
|
|
$
|
1,462,789
|
|
|
$
|
881,394
|
|
Total
|
|
$
|
1,462,789
|
|
|
$
|
881,394
|
|
Trade payables include balances of suppliers and consulting service providers.
9.
|
Other current liabilities:
|
Other current liabilities of the Company are analyzed as follows:
|
|
March 31,2021
|
|
|
December 31, 2020
|
|
Accrued expenses for legal and consulting fees
|
|
$
|
837,606
|
|
|
$
|
814,965
|
|
Other accruals and short-term payables
|
|
|
118,510
|
|
|
|
89,414
|
|
Contingent Consideration
|
|
|
2,000,000
|
|
|
|
-
|
|
Total
|
|
$
|
2,956,116
|
|
|
$
|
904,379
|
|
10.
|
Private Placement Warrants and Working Capital Warrants:
|
In connection with the Business Combination, the Company has assumed 3,940,278 Private Placement Warrants issued upon AMCI’s Initial Public Offering. In addition, upon the closing of the
Business Combination, the working capital loan provided by AMCI’s Sponsor to AMCI was converted into 400,000 Working Capital Warrants, which were also assumed. The terms of the Working Capital Warrants are the same as those of the Private
Placement Warrants.
As of March 31, 2021, the Company had 4,340,278 Private Placement Warrants and Working Capital Warrants outstanding. Each Private Placement Warrant and Working Capital Warrant entitles the
registered holder to purchase one share of Common Stock at a price of $11.50 per share, subject to adjustment, at any time commencing 30 days after the completion of the Business Combination. The Public Warrants will expire five years after the
completion of a Business Combination or earlier upon redemption or liquidation.
The Private Placement Warrants and Working Capital Warrants are identical to the Public Warrants, except that the Private Placement Warrants and Working Capital Warrants and the common stock
issuable upon the exercise of those warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants and
Working Capital Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If those warrants are held by someone other than the initial purchasers or
their permitted transferees, they will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. As of March 31, 2021, Private Placement Warrants and Working Capital Warrants are held by its initial
purchasers.
According to the provisions of the Private Placement Warrants and Working Capital Warrants warrant agreements, the exercise price and number of shares of common stock issuable upon exercise of those warrants may
be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. Private Placement Warrants and Working Capital Warrants are classified as liabilities in accordance
with the Company’s evaluation of the provisions of ASC 815- 40-15, which provides that a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and that
event is not an input to the fair value of the warrant with a fixed exercise price and fixed number of underlying shares.
11.
|
Stockholders’ Equity / (Deficit):
|
Shares Authorized
As of March 31, 2021, the Company had authorized a total of 111,000,000 shares for issuance with 110,000,000 shares designated as common stock, par value $0.0001 per share and 1,000,000
shares designated as preferred stock, par value $0.0001 per share.
Public Warrants
In connection with the Business Combination, the Company has assumed Public Warrants issued upon AMCI’s Initial Public Offering.
As of March 31, 2021, the Company had 22,052,077 Public Warrants outstanding. Each Public Warrant entitles the registered holder to purchase one share of Common Stock at a price of $11.50 per
share, subject to adjustment, at any time commencing 30 days after the completion of the Business Combination. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
Once the warrants become exercisable, the Company may redeem the Public Warrants:
–in whole and not in part;
–at a price of $0.01 per warrant;
–upon not less than 30 days’ prior written notice of redemption;
–if, and only if, the reported last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company
sends the notice of redemption to the warrant holders; and
–if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants.
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as
described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization,
reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. In addition, the warrant agreement provides that in case of a tender offer or exchange that
involves 50% or more of the Company’s stockholders, the Public Warrants may be settled in cash, equity securities or other assets depending on the kind and amount received per share by the holders of the common stock in such consolidation or
merger that affirmatively make such election.
Public Warrants are classified in equity in accordance with the Company’s evaluation of the provisions of ASC 480 and ASC 815. The Company analyzed the terms of the Public Warrants and
concluded that there are no terms that provide that the warrant is not indexed to the issuer’s common stock. The Company also analyzed the tender offer provision discussed above, and considering that upon the Closing of the Business Combination
the Company has a single class of common shares, concluded that the exception discussed in ASC 815-40-25 applies, and thus equity classification is not precluded.
Revenue, net is analyzed as follows:
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Three months period ended
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March, 31 2021
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March, 31,2020
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Sales of goods
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$
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1,489,292
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$
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100,266
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Total revenue from contracts with customers
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$
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1,489,292
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$
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100,266
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As at March 31, 2021 and December 31, 2020 contract assets were $ 745,513 and $85,930, respectively. Also, the Company has recognized contract liabilities of $44,185 and $167,761 has at March 31, 2021 and December 31, 2020, respectively.
13.
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Fair value measurement:
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The carrying amounts reflected in the consolidated balance sheets of cash and cash equivalents, accounts receivables, net, other current assets, trade and other payables, due from/to related parties, other
current liabilities, income tax payable and convertible promissory notes, approximate their respective fair values due to the short maturity of these instruments.
To calculate the interim tax provision, at the end of each interim period the Company estimates the annual effective tax rate and applies that to its ordinary quarterly earnings. The effect of changes in the
enacted tax laws or rates is recognized in the interim period in which the change occurs. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and judgments including, but not limited to,
the expected operating income for the year, projections of the proportion of income earned and taxed in foreign jurisdictions, permanent differences between book and tax amounts, and the likelihood of recovering deferred tax assets generated in
the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained, or the tax environment changes.
15.
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Commitments and contingencies:
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The Company is subject to legal and regulatory actions that arise from time to time in the ordinary course of business. The assessment as to whether a loss is probable or reasonably possible, and as to whether
such loss or a range of such loss is estimable, often involves significant judgment about future events.
On December 17, 2020, a purported shareholder class action complaint was filed by Dillon Frey against AMCI in the Supreme Court of the State of New York, County of New York, alleging that the proposed Business
Combination with Advent is both procedurally and substantively unfair and seeking to maintain the action as a class action and enjoin the Business Combination, among other things, without stating a specific amount of damages. The complaint does
not provide detail as to how the proposed Business Combination is unfair, either procedurally or substantively, and we believe it has no merit. On February 10, 2021, a notice of voluntary discontinuance of the complaint was filed in the Supreme
Court of the State of New York, County of New York.