References in this Annual Report to "we," "us" or the "Company" refer to AltC
Acquisition Corp. References to our "management" or our "management team" refer
to our officers and directors, and references to the Sponsor refer to AltC
Sponsor LLC. The following discussion and analysis of the Company's financial
condition and results of operations should be read in conjunction with the
financial statements and the notes thereto contained elsewhere in this Annual
Report. Certain information contained in the discussion and analysis set forth
below includes forward-looking statements that involve risks and uncertainties.
Our actual results may differ materially from those anticipated in these
forward-looking statements as a result of many factors, including those set
forth under "Special Note Regarding Forward-Looking Statements," "Item 1A. Risk
Factors" and elsewhere in this Annual Report.
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Overview
We are a blank check company incorporated in Delaware on February 1, 2021 for
the purpose of effecting a merger, stock exchange, asset acquisition, stock
purchase, reorganization or similar Business Combination with one or more
businesses. We intend to effectuate our Business Combination using cash derived
from the proceeds of the Initial Public Offering and the sale of the Private
Placement Shares, our shares, debt or a combination of cash, shares and debt.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a Business
Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from February 1, 2021 (inception) through December 31, 2022
were organizational activities, those necessary to prepare for the Initial
Public Offering, described below, and subsequent to the Initial Public Offering,
identifying a target company for our Business Combination. We do not expect to
generate any operating revenues until after the completion of our Business
Combination. We 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 for due diligence expenses.
For the year ended December 31, 2022, we had a net income of $3,925,770, which
consisted of interest earned on marketable securities held in Trust Account of
$7,277,660 and unrealized gain on marketable securities held in Trust Account of
$68,050, offset by operational costs of $1,809,484 and a provision for income
taxes of $1,474,356.
For the period from February 1, 2021 (inception) through December 31, 2021, we
had net loss of $1,056,706, which consists of formation and operating costs of
$1,179,760 and a provision for income taxes of $2,416, offset by interest earned
on marketable securities held in Trust Account of $117,677 and an unrealized
gain on marketable securities held in the Trust Account of $7,793.
Liquidity, Capital Resources and Going Concern
On July 12, 2021, we completed the Initial Public Offering of 50,000,000 Public
Shares, which includes the full exercise by the underwriters of their
over-allotment option in the amount of 5,000,000 Public Shares, at $10.00 per
Public Share, generating gross proceeds of $500,000,000. Simultaneously with the
closing of the Initial Public Offering, we completed the sale of 1,450,000
Private Placement Shares at a price of $10.00 per Private Placement Share in a
private placement to the Sponsor, generating gross proceeds of $14,500,000.
Following the Initial Public Offering, the exercise of the over-allotment option
and the sale of the Private Placement Shares, a total of $500,000,000 was placed
in the Trust Account. We incurred $26,652,125 of transaction costs, consisting
of $8,580,000 of underwriting fees, which is net of $1,420,000 reimbursed fees
from the underwriters, $17,500,000 of deferred underwriting fees and $572,125 of
other offering costs. In addition, $5,285,860 of cash was held outside of the
Trust Account and available for working capital purposes.
For the year ended December 31, 2022, cash used in operating activities was
$954,691. The net income of $3,925,770 was affected by interest earned on
marketable securities held in the Trust Account of $7,277,660, unrealized gain
on marketable securities held in our Trust Account of $68,050 and deferred tax
benefit of $294,084. Changes in operating assets and liabilities provided
$2,035,065 of cash for operating activities.
For the period from February 1, 2021 (inception) through December 31, 2021, cash
used in operating activities was $1,880,180. Net loss of $1,056,706 was affected
by interest earned on marketable securities held in Trust Account of $117,677,
offering costs of $168,415 and an unrealized gain on marketable securities held
in Trust Account of $7,793. Changes in operating assets and liabilities used
$866,419 of cash for operating activities.
As of December 31, 2022, we had marketable securities held in the Trust Account
of $506,140,080 (including approximately $6,140,080 of interest income)
consisting of U.S. Treasury Bills with a maturity of 185 days or less. Interest
income on the balance in the Trust Account may be used by us to pay taxes.
Through December 31, 2022, we withdrew an amount of $1,195,000 from interest
earned from the Trust Account for working capital purposes and to pay income tax
obligations.
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We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account (less
deferred underwriting commissions and income taxes payable), to complete our
Business Combination. To the extent that our capital stock or debt is used, in
whole or in part, as consideration to complete our Business Combination, the
remaining proceeds held in the Trust Account will be used as working capital to
finance the operations of the target business or businesses, make other
acquisitions and pursue our growth strategies.
As of December 31, 2022, we had cash of $3,577,359. We intend to use the funds
held outside the Trust Account primarily to identify and evaluate target
businesses, perform business due diligence on prospective target businesses,
travel to and from the offices, plants or similar locations of prospective
target businesses or their representatives or owners, review corporate documents
and material agreements of prospective target businesses, and structure,
negotiate and complete a Business Combination.
In order to finance transaction costs in connection with a Business Combination,
the Sponsor, an affiliate of the Sponsor, or the Company's officers and
directors may, but are not obligated to, loan the Company funds as may be
required ("Working Capital Loans"). If the Company completes a Business
Combination, the Company would repay the Working Capital Loans out of the
proceeds of the Trust Account released to the Company. In the event that a
Business Combination does not close, the Company may use a portion of proceeds
held outside the Trust Account to repay the Working Capital Loans but no
proceeds held in the Trust Account would be used to repay the Working Capital
Loans. Except for the foregoing, the terms of such Working Capital Loans, if
any, have not been determined and no written agreements exist with respect to
such loans. The Working Capital Loans would either be repaid upon consummation
of a Business Combination, without interest, or, at the lender's discretion, up
to $1,500,000 of such Working Capital Loans may be convertible into shares of
the post-business combination entity at a price of $10.00 per share. These
shares would be identical to the Private Placement Shares.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business, undertaking in-depth due diligence
and negotiating a Business Combination are less than the actual amount necessary
to do so, we may have insufficient funds available to operate our business prior
to our Business Combination. Moreover, we may need to obtain additional
financing either to complete our Business Combination or because we become
obligated to redeem a significant number of our Public Shares upon consummation
of our 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 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 upon expiration of the completion window. 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.
In connection with the Company's assessment of going concern considerations in
accordance with ASC Subtopic 205-40, Presentation of Financial Statements- Going
Concern, the Company has until July 12, 2023 (or by October 12, 2023, if the
Company has an executed letter of intent, agreement in principle or definitive
agreement for a Business Combination by July 12, 2023) to consummate a Business
Combination. It is uncertain that the Company will be able to consummate a
Business Combination by this time. If a Business Combination is not consummated
by this date and an extension not obtained by the Sponsor, there will be a
mandatory liquidation and subsequent dissolution of the Company. Management has
determined that the potential mandatory liquidation and subsequent dissolution
raises substantial doubt about the Company's ability to continue as a going
concern. No adjustments have been made to the carrying amounts of assets or
liabilities should the Company be required to liquidate after July 12, 2023 (or
by October 12, 2023, if the Company has an executed letter of intent, agreement
in principle or definitive agreement for a Business Combination by July 12,
2023). The Company intends to complete a Business Combination before the
mandatory liquidation date.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of December 31, 2022. We do not participate in
transactions that create relationships with unconsolidated entities or financial
partnerships, often referred to as variable interest entities, which would have
been established for the purpose of facilitating off-balance sheet arrangements.
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.
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Contractual Obligations
The Company agreed, commencing on July 8, 2021 through the earlier of the
Company's consummation of a Business Combination and its liquidation, to pay an
affiliate of the Sponsor a total of $30,000 per month for office space,
administrative and support services.
The underwriters are entitled to a deferred fee of $0.35 per Public Share, or
$17,500,000 in the aggregate. The deferred fee will become payable to the
underwriter from the amounts held in the Trust Account solely in the event that
the Company completes a Business Combination, subject to the terms of the
underwriting agreement.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have identified the following critical accounting policies:
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible conversion in
accordance with the guidance in Accounting Standards Codification ("ASC") Topic
480 "Distinguishing Liabilities from Equity." Shares of Class A common stock
subject to mandatory redemption is classified as a liability instrument and
measured at fair value. Conditionally redeemable common stock (including common
stock that features 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) is classified as temporary equity. At all other
times, common stock is classified as stockholders' equity. Our Class A common
stock features certain redemption rights that are considered to be outside of
our control and subject to occurrence of uncertain future events. Accordingly,
Class A common stock subject to possible redemption is presented at redemption
value as temporary equity, outside of the stockholders' deficit section of our
balance sheets.
Net Income (Loss) Per Common Share
Net income (loss) per common share is computed by dividing net income (loss) by
the weighted average number of common shares outstanding during the period.
Remeasurement associated with the redeemable shares of Class A common stock is
excluded from earnings per share as the redemption value approximates fair
value.
Recent Accounting Standards
The Company's management does not believe that any recently issued, but not yet
effective, accounting standards, if currently adopted, would have a material
effect on our financial statements.
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