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Atlantic stal Acquisition (ACAH) - 2021 Q3 - Quarterly Report
ACAHAtlantic stal Acquisition (ACAH)2021-11-15 22:24

Financial Performance - For the three months ended September 30, 2021, the company reported a net income of 4,225,681,drivenbyachangeinfairvalueofwarrantliabilitiesof4,225,681, driven by a change in fair value of warrant liabilities of 5,857,667 and dividends earned on marketable securities of 4,440,offsetbyoperationalcostsof4,440, offset by operational costs of 1,636,426[114]. - For the nine months ended September 30, 2021, the company experienced a net loss of 228,214,whichincludedoperationalcostsof228,214, which included operational costs of 3,567,291, a change in fair value of warrant liabilities of 3,322,667,andinterestearnedonmarketablesecuritiesof3,322,667, and interest earned on marketable securities of 16,410[115]. - The company has not generated any operating revenues to date and does not expect to do so until after completing a Business Combination[112]. Initial Public Offering - The company completed its Initial Public Offering on March 8, 2021, raising gross proceeds of 300,000,000fromthesaleof30,000,000Unitsat300,000,000 from the sale of 30,000,000 Units at 10.00 per Unit, along with an additional 8,200,000fromthesaleof5,466,667PrivatePlacementWarrants[116].MarketableSecurities−AsofSeptember30,2021,thecompanyheldmarketablesecuritiesintheTrustAccountamountingto8,200,000 from the sale of 5,466,667 Private Placement Warrants[116]. Marketable Securities - As of September 30, 2021, the company held marketable securities in the Trust Account amounting to 345,016,410, which primarily consists of mutual funds investing in U.S. Treasury Bills[117]. Operational Costs - The company incurred 30,000and30,000 and 70,000 in fees for administrative services for the three and nine months ended September 30, 2021, respectively[122]. - The company has incurred cash used in operating activities of 1,436,304fortheninemonthsendedSeptember30,2021[116].InternalControlsandCompliance−Thecompany’sdisclosurecontrolsandprocedureswerefoundtobeineffectiveduetoamaterialweaknessrelatedtotherestatementoffinancialstatements[131].−ThecompanyidentifiedamaterialweaknessininternalcontrolsrelatedtotheaccountingforcomplexfinancialinstrumentsasofSeptember30,2021[136].−Thecompanyconcludedthatitsdisclosurecontrolsandprocedureswerenoteffectiveduetothematerialweaknessidentifiedduringthereportingperiod[131].−Thecompanyiscommittedtodevelopingandmaintaininganeffectivesystemofinternalcontroloverfinancialreportingtoensuretimelyandaccuratefinancialreporting[136].RisksandLitigation−Thecompanyfacespotentiallitigationordisputesduetotheidentifiedmaterialweaknessandchangesinaccountingforcomplexfinancialinstruments[140].−Thecompanyhasnoknowledgeofanycurrentlitigationordisputesrelatedtothematerialweaknessbutcannotassurethatsuchissueswillnotariseinthefuture[140].−Theremediationmeasuresforthematerialweaknessmaybetime−consumingandcostly,withnoassuranceoftheireffectiveness[137].−Thecompanymayfacerisksthatcouldcauseactualresultstodiffermateriallyfromthosereported,includingchangesinthevalueofitsWarrants[133].FinancialInstruments−AsofSeptember30,2021,thecompany′sconsolidatedbalancesheetincludesderivativeliabilitiesrelatedtoembeddedfeatureswithinitsWarrants,whicharemeasuredatfairvalue[135].−Thecompanyexpectstorecognizenon−cashgainsorlossesonitsWarrantseachreportingperiod,andtheamountofsuchgainsorlossescouldbematerial[135].FuturePlans−ThecompanyhasacommitmentfromtheSponsortoprovideupto1,436,304 for the nine months ended September 30, 2021[116]. Internal Controls and Compliance - The company’s disclosure controls and procedures were found to be ineffective due to a material weakness related to the restatement of financial statements[131]. - The company identified a material weakness in internal controls related to the accounting for complex financial instruments as of September 30, 2021[136]. - The company concluded that its disclosure controls and procedures were not effective due to the material weakness identified during the reporting period[131]. - The company is committed to developing and maintaining an effective system of internal control over financial reporting to ensure timely and accurate financial reporting[136]. Risks and Litigation - The company faces potential litigation or disputes due to the identified material weakness and changes in accounting for complex financial instruments[140]. - The company has no knowledge of any current litigation or disputes related to the material weakness but cannot assure that such issues will not arise in the future[140]. - The remediation measures for the material weakness may be time-consuming and costly, with no assurance of their effectiveness[137]. - The company may face risks that could cause actual results to differ materially from those reported, including changes in the value of its Warrants[133]. Financial Instruments - As of September 30, 2021, the company's consolidated balance sheet includes derivative liabilities related to embedded features within its Warrants, which are measured at fair value[135]. - The company expects to recognize non-cash gains or losses on its Warrants each reporting period, and the amount of such gains or losses could be material[135]. Future Plans - The company has a commitment from the Sponsor to provide up to 1,315,000 in working capital loans, with an amendment on November 11, 2021, increasing the commitment by an additional 1,055,000[120].−Theunderwritersareentitledtoadeferredfeeof1,055,000[120]. - The underwriters are entitled to a deferred fee of 0.35 per Unit, totaling $12,075,000, payable only if the company completes a Business Combination[123]. - The company plans to enhance its processes to better evaluate and understand complex accounting standards, including providing increased access to accounting literature and improved communication among personnel[132].