The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our consolidated financial
statements and related notes appearing elsewhere in this Annual Report on Form
10-K. Some of the information contained in this discussion and analysis or set
forth elsewhere in this Annual Report on Form 10-K, including information with
respect to our plans and strategy for our business, includes forward-looking
statements that involve risks and uncertainties. As a result of many factors,
including those factors set forth in the "Item 1.A. Risk Factors" section of
this Annual Report on Form 10-K, our actual results could differ materially from
the results described in or implied by the forward-looking statements contained
in the following discussion and analysis
Overview
We were a blank check company incorporated in Delaware on June 18, 2018 formed
for the purposes of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination with
one or more businesses, which we refer to as our initial business combination.
We consummated our initial public offering on November 20, 2018.
Recent Developments
On February 4, 2021, we consummated the business combination pursuant to the
terms of the Merger Agreement. In connection with the consummation of the
Business Combination, the Company changed its name to "Advent Technologies
Holdings, Inc." and each outstanding share of Class A common stock, including
any shares of Class B common stock that were converted into shares of Class A
common stock, were redesignated as common stock. We continued the listing of our
common stock and public warrants on Nasdaq under the symbols "ADN" and "ADNWW",
respectively. Prior to the Closing, our Class A common stock, public warrants
and units were listed on the Nasdaq Stock Market under the symbols "AMCI",
"AMCIW" and "AMCIU". The units automatically separated into their component
securities upon consummation of the Business Combination and, as a result, no
longer trade as a separate security.
Further information regarding the Business Combination and Advent is set forth
in (i) the Proxy Statement / Prospectus and (ii) our Super 8-K. The Super 8-K
will be amended to report Advent's audited financial results and other
information for the fiscal year ended December 31, 2020.
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Results of Operations
The Company has neither engaged in any operations nor generated any revenues
through December 31, 2020. The Company's only activities from inception to
December 31, 2020 were organizational activities, those necessary to prepare for
the initial public offering, identifying a target company for an initial
business combination and related activities to negotiate, document and implement
the selected business combination and the acquisition of Advent.
The Company generated non-operating income in the form of interest and dividend
income on our marketable securities. The Company incurred expenses as a result
of being a public company (for legal, financial reporting, accounting and
auditing compliance), as well as for due diligence and transaction expenses in
connection with the preparation for completing a Business Combination.
For the year ended December 31, 2020, we had a net loss of $993,853, which
consists of loss from operations of $1,631,364 and a provision for income taxes
of $199,030 offset by dividend income on marketable securities held in the trust
account of $836,541.
For the year ended December 31, 2019, we had net income of $2,872,889, which
consists of dividend income on marketable securities held in the trust account
of $4,638,361, offset by operating costs of $696,557, and a provision for income
taxes of $1,068,915.
Liquidity and Capital Resources
On November 20, 2018, AMCI consummated its initial public offering of 20,000,000
Units. Each Unit consisted of one share of Class A common stock and one Public
Warrant, with each Warrant entitling the holder thereof to purchase one share of
Class A common stock for $11.50 per share. The Units were sold at a price of
$10.00 per Unit, generating gross proceeds to AMCI of $200,000,000. The Company
had granted the underwriters for the initial public offering (the
"Underwriters") a 45-day option to purchase up to 3,000,000 additional Units to
cover over-allotments, if any ("Over-Allotment Units"). On November 27, 2018,
the Underwriters exercised the option in part and purchased an aggregate of
2,052,077 Over-Allotment Units, which were sold at an offering price of $10.00
per Unit, generating gross proceeds of $20,520,770.
On November 20, 2018, simultaneously with the consummation of the Company's
initial public offering, the Company completed a Private Placement of an
aggregate of 5,500,000 Placement Warrants to our sponsor at a purchase price of
$1.00 per Placement Warrant, generating gross proceeds to the Company of
$5,500,000. On November 27, 2018, in connection with the sale of Over-Allotment
Units, the Company consummated a private sale of an additional 410,416 Placement
Warrants to our sponsor, generating gross proceeds of $410,416.
A total of $220,520,770, (or $10.00 per Unit) comprised of $216,110,354 of the
proceeds from the Company's initial public offering (including the
Over-Allotment Units) and $4,410,416 of the proceeds of the sale of the
Placement Warrants, was placed in a U.S.-based trust account at J.P. Morgan
Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company,
acting as trustee.
For the year ended December 31, 2020, cash used in operating activities was
$3,200,574, consisting primarily of net loss of $993,853, offset by dividends
earned on marketable securities held in the trust account of $836,541. Changes
in operating assets and liabilities used $1,370,180 of cash from operating
activities.
For the year ended December 31, 2019, cash used in operating activities was
$630,914, consisting primarily of net income of $2,872,889, offset by dividends
earned on marketable securities held in the trust account of $4,638,361. Changes
in operating assets and liabilities provided $1,134,558 of cash from operating
activities.
On May 20, 2020, 7,126,888 shares were redeemed, and $72,585,441 was withdrawn
from the trust account for the redemption shares. On October 20, 2020, an
additional 5,864,053 shares were redeemed, and $60,404,995 was withdrawn from
the trust account for the additional redemption shares.
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On May 20, 2020, we issued a promissory note in the principal amount of up to
$2,365,649 to Orion Resource Partners (USA) LP, an affiliate of a business
combination target, which was outstanding in full as of December 31, 2020.
On November 20, 2020, our sponsor agreed to loan the Company up to $1,000,000 as
a working capital loan. This loan was non-interest bearing and is due at the
earlier of the date on which the Company consummates its Business Combination or
February 22, 2021. On November 20, 2020, the Company borrowed $400,000 on the
working capital loan, which remained outstanding in full as of December 31,
2020. Such loan could be converted at the option of the sponsor at the
consummation of the Business Combination into working capital warrants, which
are identical to the warrants issued to sponsor in the private placement
consummated simultaneously with the initial public offering, including as to
exercise price, exercisability and exercise period.
As of December 31, 2020, the Company had cash of $24,945 held outside the trust
account and marketable securities held in the trust account of $93,340,005.
Through December 31, 2020, we withdrew $134,795,534 to fund the redemptions and
pay franchise and income taxes.
Off-balance Sheet Financing Arrangements
We had no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of December 31, 2020. 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
As of December 31, 2020, we did not have any long-term debt, capital lease
obligations, operating lease obligations, purchase 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 administrative support to
us. We began incurring these fees on November 16, 2018 and continued to incur
these fees monthly until completion of the Business Combination.
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. The Company has identified the following critical accounting policy:
Common stock subject to possible redemption
We account for common stock subject to possible redemption in accordance with
the guidance in Accounting Standards Codification ("ASC") Topic 480
"Distinguishing Liabilities from Equity." 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
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
the Company's control) is classified as temporary equity. At all other times,
common stock is classified as stockholders' equity. Our common stock features
certain redemption rights that are considered to be outside of our control and
subject to occurrence of uncertain future events. Accordingly, common stock
subject to possible redemption is presented at redemption value as temporary
equity, outside of the stockholders' equity section of our condensed balance
sheets.
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Net loss per common share
Our statement of operations includes a presentation of income (loss) per share
for common shares subject to possible redemption in a manner similar to the
two-class method of income (loss) per share. Net income per common share, basic
and diluted, for Common stock subject to possible redemption is calculated by
dividing the proportionate share of income or loss on marketable securities held
by the Trust Account, net of applicable franchise and income taxes, by the
weighted average number of Common stock subject to possible redemption
outstanding since original issuance. Net loss per share, basic and diluted, for
non-redeemable common stock is calculated by dividing the net loss, adjusted for
income or loss on marketable securities attributable to common stock subject to
possible redemption, by the weighted average number of nonredeemable common
stock outstanding for the period. Nonredeemable common stock includes Founder
Shares and nonredeemable shares of common stock as these shares do not have any
redemption features. Non-redeemable common stock participates in the income or
loss on marketable securities based on non-redeemable common stock shares'
proportionate interest.
Recent accounting standards
Management does not believe that any recently issued, but not yet effective,
accounting standards, if currently adopted, would have a material effect on the
Company's condensed financial statements.
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We will qualify as an "emerging growth company" and
under the JOBS Act will be allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded)
companies. We are electing to delay the adoption of new or revised accounting
standards, and as a result, we may not comply with new or revised accounting
standards on the relevant dates on which adoption of such standards is required
for non-emerging growth companies. As a result, our financial statements may not
be comparable to companies that comply with new or revised accounting
pronouncements as of public company effective dates.
As an "emerging growth company", we are not required to, among other things, (i)
provide an auditor's attestation report on our system of internal controls over
financial reporting pursuant to Section 404, (ii) provide all of the
compensation disclosure that may be required of non-emerging growth public
companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act,
(iii) comply with any requirement that may be adopted by the PCAOB regarding
mandatory audit firm rotation or a supplement to the auditor's report providing
additional information about the audit and the financial statements (auditor
discussion and analysis), and (iv) disclose certain executive compensation
related items such as the correlation between executive compensation and
performance and comparisons of the CEO's compensation to median employee
compensation. These exemptions will apply for a period of five years following
the completion of this offering or until we are no longer an "emerging growth
company," whichever is earlier.
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ADVENT TECHNOLOGIES HOLDINGS, INC. 
