Past performance
by our management team or Atlantic Coastal Acquisition Corp. II may
not be indicative of future performance of an investment in our
company.
Information regarding performance by, or businesses associated
with, our management team and their affiliates is presented for
informational purposes only. Certain of our executive officers and
directors serve as executive officers and directors of ACA II,
which went public in January 2022. Past performance by our
management team or Atlantic Coastal Acquisition Corp. (“ACA II”) is
not a guarantee either (i) that we will be able to identify a
suitable candidate for our initial business combination or
(ii) of success with respect to any business combination we
may consummate. You should not rely on the historical record of our
management team’s or their affiliates’ performance as indicative of
our future performance of an investment in our company or the
returns our company will, or is likely to, generate going forward.
We entered into a definitive agreement for our initial business
combination with Essentium, Inc. on November 30, 2021.
Such definitive agreement was subsequently terminated on
February 9, 2022. Please see the section of the Annual Report
titled “Business — Proposed Business
Combination – Terminated” for more information.
Our independent
registered public accounting firm’s report contains an explanatory
paragraph that expresses substantial doubt about our ability to
continue as a “going concern.”
The registration statement for the IPO was declared effective on
March 3, 2021. On March 8, 2021, we consummated the IPO
of 30,000,000 units, with each unit consisting of one public share
and one-third of one public warrant, each whole public warrant to
purchase one share of common stock at a price of $11.50, raising
total gross proceeds of $300,000,000. On April 23, 2021, the
underwriters purchased additional units pursuant to their exercise
of the over-allotment option in full, generating gross proceeds of
$45,000,000, which is discussed in Note 6.
Simultaneously with the closing of the IPO, we consummated the sale
of 5,466,667 private placement warrants at a price of $1.50 per
private placement warrant in a private placement to our sponsor,
generating total proceeds of $8,200,000. In connection with the
underwriters’ exercise of their over-allotment option, our sponsor
purchased an additional 600,000 private placement warrants,
generating gross proceeds to us of $900,000, which is discussed in
Note 4. Transaction costs amounted to $19,122,710 consisting
of $6,900,000 of underwriting fees, $12,075,000 of deferred
underwriting fees, and $576,104 of other offering costs.
For the year ended December 31, 2021, cash used in
operating activities was $1,521,788. Net loss of $9,716,757 was
affected by dividends earned on marketable securities held in Trust
Account of $23,699, a change in fair value of the warrant
liabilities of $2,115,071, and transaction costs associated with
the Initial Public Offering of $428,394. Net changes in operating
assets and liabilities provided $5,675,203 of cash for operating
activities.
As of December 31, 2021, we had marketable securities held in
the Trust Account of $345,023,699 (including approximately $23,699
of interest income) consisting of mutual funds which invest
primarily in 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, 2021, we have
not withdrawn any interest earned from the Trust Account. In
addition, as of December 31, 2021, we had cash of $189,608
held outside of the Trust Account.
On August 9, 2021, we issued the Commitment Letter in the
principal amount of up to $1,315,000 to our sponsor, and such
letter was amended on November 11, 2021, to provide $1,055,000
in working capital loans in addition to the previously provided
$1,315,000. The Commitment Letter bears no interest, is unsecured,
and is repayable in full upon consummation of our initial business
combination. In the event that an initial business combination does
not close, all amounts loaned to us under the Commitment Letter
will be forgiven except to the extent that we have funds available
to us outside of the Trust Account established in connection with
our initial public offering.
We will need to raise additional capital through loans or
additional investments from our Sponsor, stockholders, officers,
directors, or third parties. Our officers, directors and Sponsor
may, but are not obligated to, loan us funds, from time to time or
at any time, in whatever amount they deem reasonable in their sole
discretion, to meet our working capital needs. Accordingly, we may
not be able to obtain additional financing. If we are unable to
raise additional capital, we may be required to take additional
measures to conserve liquidity, which could include, but not
necessarily be limited to, curtailing operations, suspending the
pursuit of a potential transaction, and reducing overhead expenses.
We cannot provide any assurance that new financing will be
available to us on commercially acceptable terms, if at all. These
conditions raise substantial doubt about our ability to continue as
a going concern through March 8, 2023, the date that we will be
required to cease all operations, except for the purpose of winding
up, if a business combination is not consummated.