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Acropolis Infrastructure Acquisition (ACRO) - 2022 Q4 - Annual Report
ACROAcropolis Infrastructure Acquisition (ACRO)2023-03-31 00:25

Fundraising and Financial Position - The company raised a total of 300millionfromitsInitialPublicOffering(IPO)byselling30millionunitsat300 million from its Initial Public Offering (IPO) by selling 30 million units at 10.00 per unit[19]. - An additional 45millionwasgeneratedfromthesaleof4.5millionOver−AllotmentUnitsatthesamepriceduringtheover−allotmentoptionexercise[21].−ThetotalamountheldinthetrustaccountaftertheIPOandover−allotmentwasapproximately45 million was generated from the sale of 4.5 million Over-Allotment Units at the same price during the over-allotment option exercise[21]. - The total amount held in the trust account after the IPO and over-allotment was approximately 345 million, including underwriters' deferred discounts[21]. - The company has up to 332.925millionavailableforabusinesscombinationafterpaying332.925 million available for a business combination after paying 12.075 million in deferred underwriting commissions[38]. - The anticipated cash amount in the trust account is approximately 10.00perpublicshare,whichwillbeavailableforredemptionbypublicstockholders[59].−Thecompanyexpectstohaveaccesstoapproximately10.00 per public share, which will be available for redemption by public stockholders[59]. - The company expects to have access to approximately 600,000 from the Initial Public Offering proceeds to cover potential claims and estimated liquidation costs of around 100,000[84].−AsofDecember31,2022,approximately100,000[84]. - As of December 31, 2022, approximately 106,393 was available outside the trust account to fund working capital requirements[152]. - The company has up to 345,600,000availablefromtheInitialPublicOfferingandthesaleofPrivatePlacementWarrantstocompleteitsbusinesscombinationandpayrelatedfeesandexpenses[198].−345,600,000 available from the Initial Public Offering and the sale of Private Placement Warrants to complete its business combination and pay related fees and expenses[198]. - 12,075,000 of the proceeds is allocated for payment of deferred underwriting commissions[198]. Business Combination Strategy - The company aims to focus on infrastructure and related sectors for its initial business combination, leveraging the significant investment trends in this area, which saw fundraising increase from 45billionin2007to45 billion in 2007 to 98 billion in 2019 globally[24]. - The company intends to acquire businesses that exhibit positive top-line growth and have defensible business models with sustainable competitive advantages[26]. - The acquisition strategy will utilize the proprietary deal-sourcing capabilities of Apollo Global Management, aiming to build a focused business with multiple competitive advantages[25]. - The company plans to pursue targets in sectors such as telecommunications, transportation, waste management, and renewable energy, which are essential to society[25]. - The company intends to structure the initial business combination to acquire at least 50% of the outstanding voting securities of the target[44]. - The company may pursue Affiliated Joint Acquisition opportunities with Apollo Funds, which could involve co-investment in target businesses[102]. Regulatory and Compliance Considerations - The NYSE rules require that the initial business combination must have a fair market value equal to at least 80% of the net assets held in the trust account[29]. - The company is classified as an "emerging growth company" and can take advantage of certain exemptions from reporting requirements[35]. - The company must file annual, quarterly, and current reports with the SEC, ensuring transparency in financial reporting[113]. - The company must evaluate internal control procedures as required by the Sarbanes-Oxley Act, which may increase costs and time for acquisitions[115]. - The amended and restated certificate of incorporation requires a 65% approval from common stockholders for certain amendments, while other provisions require a 90% majority for director appointments[92]. Redemption Rights and Stockholder Approval - Public stockholders can redeem their shares of Class A common stock at a per-share price equal to the aggregate amount in the trust account divided by the number of outstanding public shares[59]. - A public stockholder is restricted from seeking redemption rights for more than 15% of the shares sold in the Initial Public Offering, referred to as "Excess Shares"[67]. - If stockholder approval is sought, a majority of the outstanding shares must vote in favor of the business combination for it to be approved, requiring at least 12,937,501 votes from the 34,500,000 public shares[63]. - The company intends to conduct redemptions with a stockholder vote unless not required by law, in which case it may use tender offer rules[61]. - The company will provide public stockholders with proxy materials and redemption rights if stockholder approval is sought[63]. Risks and Challenges - The company has not generated any revenue to date and is classified as a "shell company" as it has no operations other than searching for a business combination[17]. - The company may need to obtain additional financing to complete the initial business combination if the required cash exceeds the available funds[42]. - The company has not yet secured third-party financing for the business combination, and there is no assurance it will be available[38]. - The company may face bankruptcy risks, which could deplete the trust account and affect the ability to return 10.00persharetopublicstockholders[90].−Thecompanymayfacechallengesinnegotiatingbusinesscombinationsduetothecompletionwindowrequirement,whichcouldlimitduediligencetime[133].−Thecompanymaynotbeabletodiversifyitsoperations,makingitsolelydependentontheperformanceofasinglebusinessoralimitednumberofproducts[201].−Thecompanymayfacerisksassociatedwithcombiningwithfinanciallyunstablebusinessesorthoselackinganestablishedrecordofrevenueorearnings[185].−Theabilitytocompleteabusinesscombinationmaybecomplicatedbyeconomicdownturns,geopoliticaltensions,orincreasedcapitalcosts[187].ManagementandConflictsofInterest−CertainmanagementteammembershavefiduciarydutiestoApolloFunds,whichmayleadtoconflictsofinterestinpresentingbusinessopportunities[97].−Apolloanditsaffiliatesmaycompeteforacquisitionopportunities,potentiallylimitingthecompany′soptionsforsuitablebusinesscombinations[98].−Officersanddirectorsarenotrequiredtocommitfulltimetothecompany,leadingtopotentialconflictsintimeallocationamongvariousbusinessactivities[103].−Thecompanymayattempttocompletemultiplebusinesscombinationssimultaneously,whichcouldincreasecostsandrisks,negativelyimpactingoperationsandprofitability[202].LiquidationandTrustAccountConcerns−Iftheinitialbusinesscombinationisnotcompleted,thecompanywillredeempublicsharesataper−sharepriceequaltotheaggregateamountinthetrustaccount,minusupto10.00 per share to public stockholders[90]. - The company may face challenges in negotiating business combinations due to the completion window requirement, which could limit due diligence time[133]. - The company may not be able to diversify its operations, making it solely dependent on the performance of a single business or a limited number of products[201]. - The company may face risks associated with combining with financially unstable businesses or those lacking an established record of revenue or earnings[185]. - The ability to complete a business combination may be complicated by economic downturns, geopolitical tensions, or increased capital costs[187]. Management and Conflicts of Interest - Certain management team members have fiduciary duties to Apollo Funds, which may lead to conflicts of interest in presenting business opportunities[97]. - Apollo and its affiliates may compete for acquisition opportunities, potentially limiting the company's options for suitable business combinations[98]. - Officers and directors are not required to commit full time to the company, leading to potential conflicts in time allocation among various business activities[103]. - The company may attempt to complete multiple business combinations simultaneously, which could increase costs and risks, negatively impacting operations and profitability[202]. Liquidation and Trust Account Concerns - If the initial business combination is not completed, the company will redeem public shares at a per-share price equal to the aggregate amount in the trust account, minus up to 100,000 for dissolution expenses[79]. - The company will not redeem public shares if it would cause net tangible assets to fall below 5,000,001,avoidingSEC′s"pennystock"rules[60].−Ifthetrustaccountbalancefallsbelow5,000,001, avoiding SEC's "penny stock" rules[60]. - If the trust account balance falls below 10.00 per public share due to creditor claims, the actual redemption amount may be less than $10.00[82]. - The company has not reserved funds for indemnification obligations related to claims against the trust account, raising concerns about the sponsor's ability to satisfy such obligations[84]. - If third parties bring claims against the company, the proceeds held in the trust account could be reduced, affecting the per-share redemption amount[162]. - Any distributions received by stockholders could be viewed as a "preferential transfer" or "fraudulent conveyance" in the event of bankruptcy, exposing the company to claims[168].