AUSTERLITZ ACQUISITION CORPORATION II References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" 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 Quarterly Report
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding 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. 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
for the year ended
Overview
We are a blank check company incorporated on
The registration statement for our IPO was declared effective onFebruary 25, 2021 . OnMarch 2, 2021 , we completed our IPO of 138,000,000 Units sold to the public, including the issuance of 18,000,000 Units as a result of the underwriter's exercise in full of its over-allotment option, at the price of$10.00 per Unit, generating gross proceeds of$1,380,000,000 . Each Unit consists of one Class A ordinary share of the Company and one-fourth of one redeemable warrant. Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at an exercise price of$11.50 per share, subject to adjustment. Simultaneously with the closing of our IPO, we completed the sale toCannae Holdings, LLC of an aggregate of 19,733,333 Private Placement Warrants at a price of$1.50 per Private Placement Warrant, generating gross proceeds of approximately$29,600,000 . Each Private Placement Warrant is exercisable for one Class A ordinary share at a price of$11.50 per share, subject to adjustment. The proceeds from the Private Placement were added to the net proceeds from the IPO held in the Trust Account.
Following our IPO, the full exercise of the over-allotment option and the
Private Placement, a total of
The Company's management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete its initial Business Combination with one or more target businesses that together have a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding any deferred underwriting commissions held in the Trust Account) at the time the Company signs a definitive agreement in connection with a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended.
17--------------------------------------------------------------------------------
Table of Contents
We expect to continue to incur significant costs in the pursuit of our initial Business Combination. We cannot assure you that our plans to complete a Business Combination will be successful.
The
COVID-19
pandemic has caused difficult market and economic conditions globally since its outbreak in 2020, and the full impact of the COVID-19 pandemic continues to evolve. The impact of the COVID-19 outbreak on our results of operations, financial position and cash flows will depend on future developments, including resurgences and variants of the virus that causes COVID-19, as well as efforts to reduce its spread, such as travel bans and other restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy continue to be impacted for an extended period, our ability to complete our initial Business Combination may be materially adversely affected due to significant governmental measures to contain the COVID-19 pandemic or treat its impact, including travel restrictions, the shutdown of businesses and quarantines, among others, which may limit our ability to have meetings with potential investors or affect the ability of a potential target company's personnel, vendors and service providers to negotiate and consummate our initial Business Combination in a timely manner.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities, those necessary to prepare for our IPO and, after completing our IPO, identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after completion of a Business Combination. We may 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 expenses as we conduct due diligence on prospective Business Combination candidates. Additionally, we recognize non-cash gains and losses related to changes in recurring fair value measurements of our Warrant liabilities at each reporting period. For the six months endedJune 30, 2022 , we had net income of$46,994,189 , which consists of$521,477 in general and administrative expenses, offset by non-cash gains of$47,515,666 related to changes in the fair value of the warrants and forward purchase agreement. For the period fromJanuary 5, 2021 (Inception) throughJune 30, 2021 , we had net income of$13,977,484 , which consisted of$250,144 in general and administrative costs,$5,000 of formation costs,$3,181,372 related to transaction costs allocated to derivative warrant liabilities, offset by non-cash gains of$17,414,000 related to changes in the fair value of the warrants and forward purchase agreement, For the three months endedJune 30, 2022 , we had net income of$24,229,735 , which consists of$257,931 in general and administrative costs, offset by non-cash gains of$24,229,735 related to changes in the fair value of the warrants and forward purchase agreement. For the three months endedJune 30, 2021 , we had net income of$25,124,705 , which consisted of$181,294 in general and administrative expenses and non-cash gains of$25,305,999 related to changes in the fair value of the warrants and forward purchase agreement.
Liquidity and Capital Resources
As of
As of
In order to fund working capital deficiencies or finance transaction costs in
connection with our initial Business Combination, our Sponsor or an affiliate of
our Sponsor or certain of our officers and directors may, but are not obligated
to, loan us funds as may be required. If we complete our initial Business
Combination, we would repay such loaned amounts. In the event that our initial
Business Combination does not close, we may use a portion of the working capital
held outside the Trust Account to repay such loaned amounts but no proceeds from
our Trust Account would be used for such repayment. Up to
18--------------------------------------------------------------------------------
Table of Contents
We currently expect that financial support of our Sponsor will be sufficient to operate our business through the earlier of a Business Combination orMarch 2, 2023 , the date of our mandatory liquidation should we fail to consummate a Business Combination. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating our initial Business Combination are more than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial Business Combination. If we are unable to complete our initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
For the six months ended
For the period fromJanuary 5, 2021 (Inception) throughJune 30, 2021 , cash used by operating activities$1,092,071 . Net income of$13,977,484 was affected by$3,181,372 in transaction costs allocated to derivative warrant liabilities,$18,289,000 of non-cash gains in the fair value of derivative warrant liabilities,$875,000 related to loss change in fair value of forward purchase liability,$5,000 related to formation and operating expenses paid through issuance of Class B and C ordinary shares, and changes in operating assets and liabilities, which used$841,927 of cash from operating activities.
The Company had no cash flow from investing or financing activities in the six
months ended
For the six months ended
See discussion under the header "Liquidity and Going Concern Consideration" in Note 1 to our unaudited condensed financial statements included in Item 1 of Part I of this Quarterly Report for discussion of management's consideration of the Company's ability to continue as a going concern.
Off-Balance
Sheet Financing Arrangements
We had no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as ofJune 30, 2022 orDecember 31, 2021 . We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities. 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
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay an
affiliate of our sponsor a monthly fee up to
The Company will provide its shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The shareholders will be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account (initially$10.00 per share), calculated as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. There will be no redemption rights upon the completion of a Business Combination with respect to the Company's warrants. The Class A ordinary shares are recorded at redemption value and classified as temporary equity, in accordance with Accounting Standards Codification ("ASC") Topic 480, Distinguishing Liabilities from Equity ("ASC 480"). 19
--------------------------------------------------------------------------------
Table of Contents
Critical Accounting Estimates
The preparation of condensed financial statements and related disclosures in
conformity with accounting principles generally accepted in
Warrant and Forward Purchase Liabilities
The Company accounts for the Warrants and Forward Purchase Agreement ("FPA") as
either equity-classified or liability-classified instruments based on an
assessment of the specific terms of the Warrants and FPA and the applicable
authoritative guidance in ASC 480 and ASC Topic 815,
Derivatives and Hedging
("ASC 815"). The assessment considers whether the Warrants and FPA are
freestanding financial instruments pursuant to ASC 480, meet the definition of a
liability pursuant to ASC 480, and meet all of the requirements for equity
classification under ASC 815, including whether the Warrants and FPA are indexed
to the Company's own ordinary shares and whether the warrant holders could
potentially require "net cash settlement" in a circumstance outside of the
Company's control, among other conditions for equity classification. This
assessment, which requires the use of professional judgment, is conducted at the
time of issuance of the Warrants and execution of the FPA and as of each
subsequent quarterly period end date while the Warrants and FPA are outstanding.
For issued or modified instruments such as warrants and forward purchases of
equity that meet all of the criteria for equity classification, such instruments
are required to be recorded as a component of additional
paid-in
capital at the time of issuance. For issued or modified instruments that do not
meet all the criteria for equity classification, such instruments are required
to be recorded as liabilities at their initial fair value on the date of
issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of liability-classified instruments are recognized as a
non-cash
gain or loss on the unaudited condensed statements of operations.
The Company accounts for the Warrants and
See Note 8 to our unaudited condensed financial statements included in Item 1 of
Part I of this Quarterly Report for further discussion of the pertinent items of
the Warrants and Note 9 for further discussion of the methodology used to
determine the fair value of the Company's liabilities for the Warrants and
Class A Ordinary Shares Subject to Possible Redemption
We account for our Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC 480. Class A ordinary shares subject to mandatory redemption are classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature 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) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders' equity. Our Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, the Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders' equity section of our condensed balance sheets.
Net Income (Loss) per Ordinary Share
The Company has three classes of shares, one for each of its Class A, Class B, and Class C ordinary shares. Income and losses are shared pro rata between the three classes of shares. Net income per ordinary share is computed by dividing net income by the weighted average number of ordinary shares outstanding during the period. We apply the two-class method in calculating earnings per share. Refer to Note 2 to our unaudited condensed financial statements included in Item 1 of Part I of this Quarterly Report for further discussion of the calculation of our net income per share.
Recently Issued Accounting Pronouncements
Refer to Note 2 to our unaudited condensed financial statements included in Item 8 of this Quarterly Report for discussion of management's consideration of recently issued accounting pronouncements.
© Edgar Online, source
