References in this quarterly report on Form 10-Q (the "Quarterly Report") to
"we," "us" or the "Company" refer to Advanced Merger Partners, Inc. References
to our "management" or our "management team" refer to our officers and
directors, and references to the "Sponsor" refer to HLI 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 Quarterly Report.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities Act")
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") 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 final prospectus for its Initial Public Offering (defined below) filed
with the U.S. Securities and Exchange Commission (the "SEC"). The Company's
securities filings can be accessed on the EDGAR section of the SEC's website at
www.sec.gov. Except as expressly required by applicable securities law, the
Company disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information, future events
or otherwise.
Overview
We are a blank check company formed under the laws of the State of Delaware on
November 12, 2020 for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar Business
Combination with one or more businesses ("Business Combination"). We intend to
effectuate our Business Combination using cash from the proceeds of the Initial
Public Offering and the sale of the Private Placement Warrants (defined below),
our capital stock, debt or a combination of cash, stock 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 November 12, 2020 (inception) through September 30,
2021 were organizational activities, those necessary to prepare for the Initial
Public Offering (defined below), and identifying a target company for a 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 three months ended September 30, 2021, we had net income of $2,907,032,
which consists of interest earned on marketable securities of $3,699, interest
income in bank of $50 and changes in fair value of the warrant liability of
$3,156,706, offset by operation costs of $253,423.
For the nine months ended September 30, 2021, we had net income of $1,676,350,
which consists of interest earned on marketable securities of $19,343, interest
income in bank of $103 and changes in fair value of the warrant liability of
$2,567,677, offset by operation costs of $910,773.
Liquidity and Capital Resources
On March 4, 2021, we consummated the initial public offering of 28,750,000 units
(each, a "Unit"), which includes the full exercise by the underwriters of their
over-allotment option in the amount of 3,750,000 Units, at $10.00 per Unit,
generating gross proceeds of $287.5 million (the "Initial Public Offering").
Simultaneously with the closing of the Initial Public Offering, we consummated
the sale of 5,600,000 private placement warrants (the "Private Placement
Warrants") a price of $1.50 per Private Placement Warrant in a private placement
to the Sponsor, generating gross proceeds of $8.4 million.
For the nine months ended September 30, 2021, cash used in operating activities
was $649,331. Net income of $1,676,350 was affected by interest earned on
marketable securities of $19,343, change in fair value of the warrant liability
of $2,567,677 and transaction costs associated with the warrant liability of
$302,772. Changes in operating assets and liabilities used $41,433 of cash for
operating activities.

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As of September 30, 2021, we had investments of $287,519,343 million held in a
trust account (the "Trust Account") located in the United States. Such amount
will be invested only in U.S. government securities, within the meaning set
forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), with a maturity of 185 days or less or in any
open-ended investment company that holds itself out as a money market fund
selected by the Company meeting the conditions of
Rule2a-7of
the Investment Company Act, as determined by the Company, until the earlier of
(i) the completion of a Business Combination and (ii) the distribution of the
funds held in the Trust Account. Interest income on the balance in the Trust
Account may be used by us to pay taxes. Through September 30, 2021, we have not
withdrawn any interest earned from the Trust Account.
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
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 September 30, 2021, we had cash of approximately $1,913,470. 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 fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, the Sponsor, or certain of our officers
and directors or their affiliates may, but are not obligated to, loan us funds
as may be required. If we complete a Business Combination, we would repay such
loaned amounts. In the event that a 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 $2,000,000 of such loans may be convertible into warrants
of the post Business Combination entity at a price of $1.50 per warrant. The
warrants would be identical to the Private Placement Warrants.
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.
Off-Balance
Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance
sheet arrangements as of September 30, 2021. 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.
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 of $10,000 for office space, utilities
and secretarial and administrative support. We began incurring these fees in
March 2021 and will continue to incur these fees monthly until the earlier of
the completion of the Business Combination and our liquidation. In addition, we
will reimburse such affiliate of our sponsor in the amount of $30,000 per month
for additional administrative services (not covered by the $10,000 payment set
forth above), subject to the closing of a Business Combination.
The underwriters are entitled to a deferred fee of $0.35 per share, or
$9,362,500 in the aggregate. The deferred fee will become payable to the
underwriters from the amounts held in the Trust Account solely in the event that
we complete a Business Combination, subject to the terms of the underwriting
agreement.
Critical Accounting Policies
The preparation of condensed 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:

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Warrant Liability
We account for the Warrants in accordance with the guidance contained in ASC 815
under which the Warrants do not meet the criteria for equity treatment and must
be recorded as liabilities. Accordingly, we classify the Warrants as liabilities
at their fair value and adjusts the Warrants to fair value at each reporting
period. This liability is subject to
re-measurement
at each balance sheet date until exercised, and any change in fair value is
recognized in our statement of operations. The Private Placement Warrants and
the warrants included as part of the Units (the "Public Warrants") for periods
where no observable traded price was available are valued using a Monte Carlo
simulation. For periods subsequent to the detachment of the Public Warrants from
the Units, the Public Warrant quoted market price was used as the fair value as
of each relevant date for the Public Warrants.
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption 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 is
measured at fair value. Conditionally redeemable common stock (including common
stock that feature redemption rights that is 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,
shares of Class A common stock subject to possible redemption are presented as
temporary equity, outside of the stockholders' (deficit) equity section of our
balance sheet.
Net Income (Loss) Per Common Share
Net loss per common stock is computed by dividing net loss by the weighted
average number of shares of common stock outstanding during the period. We apply
the
two-class
method in calculating earnings per share. Accretion 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
In August 2020, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU")
2020-06,
Debt - Debt with Conversion and Other Options
(Subtopic470-20)
and Derivatives and Hedging - Contracts in Entity's Own Equity
(Subtopic815-40)
("ASU2020-06")
to simplify accounting for certain financial instruments. ASU
2020-06
eliminates the current models that require separation of beneficial conversion
and cash conversion features from convertible instruments and simplifies the
derivative scope exception guidance pertaining to equity classification of
contracts in an entity's own equity. The new standard also introduces additional
disclosures for convertible debt and freestanding instruments that are indexed
to and settled in an entity's own equity. ASU
2020-06
amends the diluted earnings per share guidance, including the requirement to use
the
if-converted
method for all convertible instruments. ASU
2020-06
is effective January 1, 2024 and should be applied on a full or modified
retrospective basis, with early adoption permitted beginning on January 1, 2021.
The Company adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not
impact the Company's financial position, result of operations or cash flows.
Management does not believe that any other recently issued, but not yet
effective, accounting standards, including the standard referenced in the next
paragraph, if currently adopted, would have a material effect on our condensed
financial statements.

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