ROC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~Washington, D.C.~~WASHINGTON, DC 20549

FORM 10-Q

~~(MARK ONE)~~

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2021~~2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39994

~~ALTIMAR ACQUISITION CORP. II~~

Fathom Digital Manufacturing Corporation

(Exact name of registrant as specified in its charter)


~~Cayman Islands~~Delaware		98-1571400
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1050 Walnut Ridge Drive Hartland, WI	53029
(Address of principal executive offices)	(Zip Code)

~~40 West 57th Street~~

~~33rd Floor~~

~~New York, New York 10019~~

~~(Address of principal executive offices, including zip code)~~

~~(212)~~ ~~287-6767~~

(Registrant’s telephone number, including area ~~code)~~code: (262) 367-8254

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
~~Units, each consisting of one~~ Class A ~~ordinary share, $0.0001~~common stock, par value ~~and~~ ~~one-fourth~~ ~~of one redeemable warrant~~$0.0001 per share	~~ATMR.U~~ FATH	New York Stock Exchange
Warrants to purchase Class A ~~ordinary shares, $0.0001 par value~~common stock	~~ATMR~~ FATH.WS	New York Stock Exchange
~~Warrants, each whole warrant exercisable for one Class A ordinary share, each at an exercise price of $11.50 per share~~	~~ATMR WS~~	~~New York Stock Exchange~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 ~~as amended (the “~~~~Exchange Act~~~~”),~~ during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒☐ No ☐☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☒

As of ~~June 1, 2021, 34,500,000~~May 11, 2022, there were 51,306,971 shares of the registrant's Class A ~~ordinary~~common stock outstanding and 84,294,971 shares ~~par value $0.0001 per share, and 8,625,000~~of the registrant's vote-only, non-economic Class B ~~ordinary shares, par value $0.0001 per share, were issued and~~common stock outstanding.

Table of Contents

~~ALTIMAR ACQUISITION CORP. II~~

F~~ORM~~ ~~10-QFORTHE~~ Q~~UARTER~~ E~~NDED~~ M~~ARCH~~ ~~31, 2021~~

T~~ABLE~~OF C~~ONTENTS~~


		~~Page~~
~~PART I. FINANCIAL INFORMATION~~
~~Item 1. Financial Statements~~			1	Page
~~Condensed Balance Sheets as of March 31, 2021 (Unaudited) and December 31, 2020~~			1
	~~Condensed~~EXPLANATORY NOTE	3

PART I.	FINANCIAL INFORMATION	4

Item 1.	Financial Statements (Unaudited)	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Comprehensive Income (Loss)	5
	Consolidated Statement of ~~Operations for the three months ended March 31, 2021 (Unaudited)~~Shareholders' Equity and Redeemable Non-Controlling Interest			2	6
	~~Condensed~~Consolidated Statement of ~~Changes in Shareholders’~~Class A Contingently Redeemable Preferred Units and Members' Equity ~~for the three months ended March 31, 2021 (Unaudited)~~			3	7
	~~Condensed Statement~~Consolidated Statements of Cash Flows ~~for the three months ended March 31, 2021 (Unaudited)~~			4	8
	Notes to ~~Condensed~~Unaudited Consolidated Financial Statements ~~(Unaudited)~~			5	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			19	23
Item 3.	Quantitative and Qualitative Disclosures ~~Regarding~~About Market Risk			22	31
Item 4.	Controls and Procedures			22	31
~~PART II. OTHER INFORMATION~~
PART II.	~~Item 1. Legal Proceedings~~OTHER INFORMATION			23	32
~~Item 1A. Risk Factors~~			23
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			24	32
Item 3.	Defaults Upon Senior Securities			25	32
Item 4.	Mine Safety Disclosures			25	32
Item 5.	Other Information			25	32
Item 6.	Exhibits	33
	Signatures	25	34

EXPLANATORY NOTE

This Quarterly Report on Form 10-Q includes information pertaining to periods prior to the closing of the Business Combination (as defined in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Quarterly Report). Refer to Note 1 “Nature of Business” and Note 2 "Basis of Presentation" of the notes to our consolidated financial statements contained in this Quarterly Report for further information regarding the basis of presentation.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements made in this Quarterly Report on Form 10-Q are “forward looking statements.” Statements regarding our expectations regarding the business are “forward looking statements.” In addition, words such as “estimates,” “projected,” “expects,” “estimated,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “would,” “future,” “propose,” “target,” “goal,” “objective,” “outlook” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. The forward-looking statements contained in this Quarterly Report on Form 10-Q and in our other periodic filings are not guarantees of future performance, conditions or results and are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under "Risk Factor Summary", “Item 1A. Risk Factors”, and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the "2021 Form 10-K"). Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We may face additional risks and uncertainties that are not presently known to us, or that we deem to be immaterial, which may also impair our business, financial condition or prospects. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

PART I—FINANCIAL INFORMATION

Item 1. ~~Interim~~ Financial Statements.

~~ALTIMAR ACQUISITION CORP. II~~Fathom Digital Manufacturing Corporation

C~~ONDENSED~~ B~~ALANCE~~ S~~HEETS~~Consolidated Balance Sheets

(In thousands, except share and unit amounts)

   March 31,
2021 December 31,
2020
   (Unaudited)
ASSETS

Current assets

Cash
   $ 1,651,431 $ —
Prepaid expenses
   1,007,641 —


Total current assets
   2,659,072 —
Deferred offering costs
   —   75,000
Cash and marketable securities held in the Trust Account
   345,001,095 —


TOTAL ASSETS
   $ 347,660,167 $ 75,000



LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities

Accrued expenses
   $ 1,803,562 $ —
Accrued offering costs
   253,607 50,000
Promissory note—related party
   —   5,000


Total current liabilities
   2,057,169 55,000
Warrant liability
   35,903,054 —
Deferred underwriting fee payable
   12,075,000 —


Total liabilities
   50,035,223 55,000
Commitments and Contingencies

Class A Ordinary Shares subject to possible redemption—29,262,494 and no shares at $10.00 per share redemption value as of March 31, 2021 and December 31, 2020, respectively
   292,624,940 —
Shareholders’ Equity

Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued or outstanding
   —   —
Class A Ordinary Shares, $0.0001 par value; 500,000,000 shares authorized; 5,237,506 and no shares issued and outstanding (excluding 29,262,494 and no shares subject to possible redemption) as of March 31, 2021 and December 31, 2020, respectively
   524 —
Class B Ordinary Shares, $0.0001 par value; 50,000,000 shares authorized; 8,625,000 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
   863 863
Additional paid-in capital
   20,729,270 24,137
Accumulated deficit
   (15,730,653 ) (5,000 )


Total shareholders’ equity
   5,000,004 20,000


TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
   $ 347,660,167 $ 75,000


	Period Ended
	March 31, 2022			December 31, 2021
Assets	(unaudited)
Current assets
Cash	$	11,993		$	20,357
Accounts receivable, net		28,157			25,367
Inventory		12,541			13,165
Prepaid expenses and other current assets		4,873			1,836
Total current assets		57,564			60,725
Property and equipment, net		46,248			44,527
Right-of-use operating lease assets, net		8,808			-
Right-of-use financing lease assets, net		2,417			-
Intangible assets, net		265,017			269,622
Goodwill		1,189,762			1,189,464
Other non-current assets		252			2,036
Total assets	$	1,570,068		$	1,566,374
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable(1)	$	13,860		$	9,409
Accrued expenses		6,806			5,957
Other current liabilities		5,014			2,058
Current operating lease liability		2,937			-
Current financing lease liability		185			-
Contingent consideration		2,748			2,748
Current portion of debt		25,423			29,697
Total current liabilities		56,973			49,869
Long-term debt, net		119,083			120,491
Fathom earnout shares liability		47,690			64,300
Sponsor earnout shares liability		7,020			9,380
Noncurrent contingent consideration		850			850
Noncurrent operating lease liability		5,917			-
Noncurrent financing lease liability		2,278			-
Deferred tax liability		17,546			17,570
Other noncurrent liabilities		1,608			4,655
Warrant liability		25,800			33,900
Payable to related parties pursuant to the tax receivable agreement		4,600			4,600
Total liabilities		289,365			305,615
Commitments and Contingencies:
Redeemable non-controlling interest in Fathom OpCo		836,723			841,982
Shareholders' Equity:
Class A common stock, $0.0001 par value; 300,000,000 shares authorized; 50,785,656 issued and outstanding as of March 31, 2022 and December 31, 2021		5			5
Class B common stock, $0.0001 par value; 180,000,000 shares authorized; 84,294,971 shares issued and outstanding as of March 31, 2022 and December 31, 2021		8			8
Class C common stock, $.0001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2022 and December 31, 2021		0			0
Preferred Stock, $.0001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2022 and December 31, 2021		-			-
Additional paid-in-capital		468,475			466,345
Accumulated other comprehensive loss
Accumulated deficit		(24,508	)		(47,581	)
Shareholders’ equity attributable to Fathom Digital Manufacturing Corporation		443,980			418,777
Total Liabilities, Shareholders’ Equity, and Redeemable Non-Controlling Interest	$	1,570,068		$	1,566,374

(1) Inclusive of allowance for doubtful accounts of $1,322 and $1,150 as of March 31, 2022 and December 31, 2021, respectively

(2) Inclusive of accounts payable to related parties of $1,180 and $1,246 as of March 31, 2022 and December 31, 2021, respectively

The accompanying notes are an integral part of ~~the~~these unaudited ~~condensed~~consolidated financial statements.

Fathom Digital Manufacturing Corporation

~~ALTIMAR ACQUISITION CORP. II~~Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

C~~ONDENSED~~ S~~TATEMENT~~OF O~~PERATIONS~~(In thousands, except units, shares, per unit, and per share amounts)

~~FORTHE~~ T~~HREE~~ M~~ONTHS~~ E~~NDED~~ M~~ARCH~~

Three Months ended

March 31, 2022 (Successor)

March 31, 2021 (Predecessor)

Revenue

$
40,541

$
30,534

Cost of revenue (1) (2) (3)

28,544

17,123

Gross profit

11,997

13,411

Operating expenses

Selling, general, and administrative (4)

14,763

7,670

Depreciation and amortization

4,517

2,672

Total operating expenses

19,280

10,342

Operating (loss) income

(7,283
)

3,069

Interest expense and other (income) expense

Interest expense

1,473

2,114

Other expense

116

1,540

Other income

(27,165
)

(94
)
Total interest expense and other (income) expense, net

(25,576
)

3,560

Net income (loss) before income tax

$
18,293

$
(491
)
Income tax expense

454

9

Net income (loss)

$
17,839

$
(500
)
Net loss attributable to Fathom OpCo non-controlling interest (Note 14)

(5,259
)

-

Net income attributable to controlling interest

23,098

(500
)
Comprehensive income (loss):

Loss from foreign currency translation adjustments

(107
)

(107
)
Comprehensive income (loss), net of tax

$
22,991

$
(607
)
Earnings per Share:

Net income (loss) per unit attributable to Class A and Class B common unit holders (5)

Basic and Diluted

$
(0.36
)
Weighted average Class A and Class B units outstanding

Basic and Diluted

7,723,592

Net income per share attributable to shares of Class A common stock

Basic

$
0.45

Diluted

$
0.13

Weighted average Class A common shares outstanding

Basic

50,785,656

Diluted

135,839,973

(1)

Inclusive of $1,695 and $854 of depreciation and amortization for the three months ended March 31, 2022 and March 31, 2021,

respectively;

(2)

Inclusive of $1,108 and $580of cost of revenue related to inventory purchases from a related party for the three months ended March 31, 2022 and March 31, 2021, respectively;

(3)

Inclusive of $3,241 and $277 of inventory step-up amortization for the three months ended March 31, 2022 and March 31, 2021, respectively;

(4)

Inclusive of $71 and $353 of management fees incurred to a related party for the three months ended March 31, 2022 and March 31, 2021, respectively;

(5)

Basic and diluted net loss per unit amounts are the same for both Class A common units and Class B common units. See Note 13.

(U~~NAUDITED~~)

Operating costs
   $ 1,902,139


Loss from operations
   (1,902,139 )
Other income (expense)

Interest earned on marketable securities held in the Trust Account
   1,095


Change in fair value of warrant liability
   (13,069,538 )
Transaction costs allocated to the Warrants
   (755,071 )


Other expense, net
   (13,823,514 )
Net loss
   $ (15,725,653 )


Weighted average shares outstanding, redeemable Class A Ordinary Shares
   34,500,000


Basic and diluted net income per share, redeemable Class A Ordinary Shares
   $ —


Weighted average shares outstanding, non-redeemable Class B Ordinary Shares
   8,125,000


Basic and diluted net loss per share, non-redeemable Class B Ordinary Shares
   $ (1.94 )

The accompanying notes are an integral part of ~~the~~these unaudited ~~condensed~~consolidated financial statements.

Fathom Digital Manufacturing Corporation

~~ALTIMAR ACQUISITION CORP. II~~Consolidated Statement of Shareholders' Equity and Redeemable Non-Controlling Interest (Successor)

C~~ONDENSED~~ S~~TATEMENT~~OF C~~HANGES~~IN S~~HAREHOLDERS’ EQUITY~~(Unaudited)

~~FORTHE~~ T~~HREE~~ M~~ONTHS~~ E~~NDED~~ M~~ARCH~~ ~~31, 2021~~(In thousands, except share amounts)

(U~~NAUDITED~~)


	Class A Common Shares				Class B Common Shares
Successor:	Number of Shares		Amount		Number of Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Total Equity Attributable to Fathom		Redeemable Non-controlling Interest
Balance at December 31, 2021		50,785,656	$	5		84,284,971	$	8	$	466,345	$	(47,581	)	$	418,777	$	841,982
Equity based compensation		-		-		-		-		2,130					2,130
Cumulative effect from adoption of ASC 842		-		-		-		-		-		82			82		-
Net income		-		-		-		-		-		22,991			22,991		(5,259	)
Balance at March 31, 2022		50,785,656	$	5		84,284,971	$	8	$	468,475	$	(24,508	)	$	443,980	$	836,723

   Class A
Ordinary Shares Class B
Ordinary Shares
Additional
Paid-In
Accumulated
Total
Shareholders’

   Shares Amount Shares    Amount    Capital Deficit Equity
Balance—January 1, 2021
   —   $ —   8,625,000    $ 863    $ 24,137 $ (5,000 ) $ 20,000
Sale of 34,500,000 Class A Ordinary Shares, net of underwriting discounts, offering costs and transaction costs allocated to warrant liability
   34,500,000 3,450 —      —      313,327,147 —   313,330,597
Class A Ordinary Shares subject to possible redemption
   (29,262,494 ) (2,926 ) —      —      (292,622,014 ) —   (292,624,940 )
Net loss
   —   —   —      —      —   (15,725,653 ) (15,725,653 )






Balance—March 31, 2021
   5,237,506 $ 524 8,625,000    $ 863    $ 20,729,270 $ (15,730,653 ) $ 5,000,004

The accompanying notes are an integral part of ~~the~~these unaudited ~~condensed~~consolidated financial statements.

Fathom Digital Manufacturing Corporation

~~ALTIMAR ACQUISITION CORP. II~~Consolidated Statement of Class A Contingently Redeemable Preferred Units and Members' Equity (Predecessor) (Unaudited)

C~~ONDENSED~~ S~~TATEMENT~~OF C~~ASH~~ F~~LOWS~~(In thousands, except unit amounts)

~~FORTHE~~ T~~HREE~~ M~~ONTHS~~ E~~NDED~~ M~~ARCH~~ ~~31, 2021~~


	Class A Contingently Redeemable Preferred Equity				Class A Common Units				Class B Common Units
	Number of Units		Amount		Number of Units		Amount		Number of Units		Amount		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 31, 2020		1,167,418	$	54,105		5,480,611	$	35,869		2,242,981	$	14,450	$	(14,232	)	$	(68	)	$	36,019
Net loss		-		-		-		-		-		-		(500	)		-			(500	)
Foreign currency translation adjustment		-		-		-		-		-		-		-			(107	)		(107	)
Balance at March 31, 2021		1,167,418	$	54,105		5,480,611	$	35,869		2,242,981	$	14,450	$	(14,732	)	$	(175	)	$	35,412

(U~~NAUDITED~~)

Cash flows from operating activities

Net loss
   $ (15,725,653 )
Adjustments to reconcile net loss to net cash used in operating activities

Interest expense on marketable securities held in the Trust Account
   (1,095 )
Change in fair value of warrant liability
   13,069,538
Transaction costs allocated to the Warrants
   755,071
Changes in operating assets and liabilities

Prepaid expenses
   (1,007,641 )
Accrued expenses
   1,803,562


Net cash used in operating activities
   (1,106,218 )


Cash flows from investing activities

Investment of cash in the Trust Account
   (345,000,000 )


Net cash used in investing activities
   (345,000,000 )


Cash flows from financing activities

Proceeds from sale of the Units
   332,066,484
Underwriting discounts paid
   (6,900,000 )
Proceeds from sale of the Public Warrants
   12,933,516
Proceeds from sale of the Private Placements Warrants
   9,900,000
Repayment of promissory note—related party
   (94,890 )
Payment of offering costs
   (147,461 )


Net cash provided by financing activities
   347,757,649


Net change in cash
   1,651,431
Cash—beginning of period
   —


Cash—end of period
   $ 1,651,431


Non-cash investing and financing activities

Offering costs included in accrued offering costs
   $ 203,607


Offering costs paid through promissory note
   $ 89,890


Initial classification of Class A Ordinary Shares subject to possible redemption
   $ 300,351,190


Change in value of Class A Ordinary Shares subject to possible redemption
   $ (7,726,250 )


Deferred underwriting fee payable
   $ 12,075,000

The accompanying notes are an integral part of ~~the~~these unaudited ~~condensed~~consolidated financial statements.

Fathom Digital Manufacturing Corporation

Consolidated Statements of Cash Flows (Unaudited)

(In thousands)


	Three Months ended
	March 31, 2022 (Successor)			March 31, 2021 (Predecessor)
Cash Flows from Operating Activities
Net income (loss)	$	23,098		$	(500	)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation		136			116
Depreciation and amortization included in cost of revenue		1,695			854
Amortization of intangible assets		4,374			2,301
Amortization of inventory step-up		3,241			277
Loss on disposal of property, plant and equipment		24			-
Foreign currency translation adjustment		(107	)		(107	)
Share-based compensation		2,130			-
Non cash lease expense, net		169
Deferred taxes		(24	)		-
Non-controlling interest share of Fathom OpCo net loss		(5,259	)		-
Change in fair value of Fathom earnout shares liability		(16,610	)		-
Change in fair value of Sponsor earnout shares liability		(2,360	)		-
Change in fair value of Warrant liability		(8,100	)		-
Amortization of debt financing costs		100			96
Changes in operating assets and liabilities that provided cash:
Accounts receivable		(2,790	)		890
Inventory		(2,617	)		202
Prepaid expenses and other assets		(1,170	)		(2,006	)
Accounts payable		4,062			594
Accrued liabilities and other		848			(587	)
Net cash provided by operating activities		840			2,130

Cash Flows from Investing Activities
Purchase of property and equipment		(3,346	)		(1,348	)
Cash used for acquisitions, net of cash acquired		-			(10,835	)
Net cash used in investing activities		(3,346	)		(12,183	)

Cash Flows from Financing Activities
Proceeds from debt		-			11,500
Payments on finance leases		(77	)		-
Payments on debt		(5,781	)		(227	)
Net cash provided by (used in) financing activities		(5,858	)		11,273

Net (decrease) increase in cash		(8,364	)		1,220

Cash, beginning of period		20,357			8,188
Cash, end of period	$	11,993		$	9,408

Supplemental cash flows information:
Cash paid for interest	$	173		$	1,945
Cash paid to related parties		1,810			2,502

Significant non-cash investing activities:
Right-of-use assets acquired through lease liabilities	$	11,986		$	-

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

~~ALTIMAR ACQUISITION CORP. II~~Note 1. Nature of Business

N~~OTES~~TO C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

M~~ARCH~~ ~~31,~~Fathom Digital Manufacturing Corporation (“Fathom”, "Successor", or the “Company”) was incorporated as a Delaware corporation on December 23, 2021

~~(Unaudited)~~

~~NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS~~

as part of the business combination as defined below. Fathom was previously named Altimar Acquisition Corp. II ~~(the “~~~~Company~~”("Altimar II") before deregistering as an exempted company in the Cayman Islands. Fathom, through its consolidated subsidiary, Fathom Holdco, LLC (“Fathom OpCo”), is a ~~blank check company incorporated~~leading on-demand digital manufacturing platform in North America, providing comprehensive product development and manufacturing services to many of the largest and most innovative companies in the world.

Fathom OpCo was formed on April 16, 2021 as a ~~Cayman Islands exempted~~limited liability company ~~on December 7, 2020. The~~in accordance with the provisions of the Delaware Limited Liability Company ~~was incorporated~~Act, for the purpose of ~~effecting~~holding a ~~merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities (a “~~~~Business Combination~~”100 percent equity interest in MCT Group Holdings, LLC and its subsidiaries (“MCT Holdings”) and holding a 100 percent equity interest in Incodema Holdings, LLC and its subsidiaries (“Incodema Holdings”). ~~The Company is~~Capitalized terms used but not ~~limited~~otherwise defined herein have the meanings given to ~~a particular industry or sector for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as~~ such ~~the Company is subject to all of the risks associated with early stage and emerging growth companies.~~

As of March 31, 2021, the Company had not commenced any operations. All activity for the period from December 7, 2020 (inception) through March 31, 2021 relates to the Company’s formation, the Company’s initial public offering (the “~~Initial Public Offering~~”), which is described below and, subsequent to the completion of the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates ~~non-operating~~ ~~income~~terms in the ~~form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.~~

~~The Registration Statement on~~ Company's 2021 Form ~~S-1~~ ~~(File~~ ~~No. 333-252260)~~ ~~(the “~~~~Registration Statement~~~~”) for the Initial Public Offering was declared effective on February 4, 2021. On February 9, 2021, the Company consummated the Initial Public Offering of 34,500,000 units (the “~~~~Units~~~~” and, with respect to the Class A Ordinary Shares (as defined below) and the warrants included in the Units, the “~~~~Public Shares~~~~” and the “~~~~Public Warrants~~,” respectively), which includes the full exercise by the underwriters of their over-allotment option in the amount of 4,500,000 Units, at $10.00 per Unit, generating gross proceeds of $345,000,000, as described in 10-K.

Note 4.

~~Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 9,900,000 warrants (the “~~~~Private Placement Warrants~~~~” and, together with the Public Warrants, the “~~~~Warrants~~~~”) at a price of $1.00 per Private Placement Warrant in a private placement to Altimar Sponsor II, LLC (the “~~~~Sponsor~~~~”), generating gross proceeds of $9,900,000, as described in Note 4.~~

Transaction costs amounted to $19,490,958, consisting of $6,900,000 of underwriting fees, $12,075,000 of deferred underwriting fees (see Note 6) and $515,958 of other offering costs. $755,071 of the transaction costs was expensed through the condensed statement of operation on the date of the Initial Public Offering.

Following the closing of the Initial Public Offering on February 9, 2021, an amount of $345,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “~~Trust Account~~~~”) and will be invested 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 investing solely in U.S. Treasuries and meeting certain conditions under ~~Rule 2a-7~~ of 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 in the Trust Account to the Company’s shareholders, as described below.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The New York Stock Exchange listing rules require that the Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the Trust Account (excluding the amount of deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the signing a definitive agreement in connection with the initial Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to complete a Business Combination successfully.

~~ALTIMAR ACQUISITION CORP. II~~

N~~OTES~~TO C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

M~~ARCH~~ ~~31, 2021~~

~~(Unaudited)~~

~~The Company will provide the holders of the Public Shares (the “~~~~Public Shareholders~~”) with the opportunity to redeem all or a portion of their Public Shares either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination (initially anticipated to be $10.00 per Public Share), including interest (which interest shall be net of taxes payable), divided by the number of the then issued and outstanding Public Shares, subject to certain limitations as described in the Registration Statement. The ~~per-Public~~ Share amount to be distributed to the Public Shareholders who properly redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters in the Initial Public Offering (as discussed in Note 6). There will be no redemption rights in connection with a Business Combination with respect to the Warrants.

The Company will not redeem Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001 (so that it does not then become subject to the U.S. Securities and Exchange Commission’s (the “~~SEC~~”) “penny stock” rules) or any greater net tangible asset or cash requirement that may be contained in the agreement relating to the Business Combination. If the Company seeks shareholder approval of the Business Combination, the Company will proceed with a Business Combination only if the Company receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at a general meeting, or such other vote as required by applicable law or stock exchange rules. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined below) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, the Public Shareholders may elect to redeem their Public Shares without voting and, if they do vote, irrespective of whether they vote for or against a proposed Business Combination.

Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such Public Shareholder or any other person with whom such Public Shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “~~Exchange Act~~~~”)), will be restricted from redeeming its Public Shares with respect to more than an aggregate of 15% of the Public Shares without the Company’s prior written consent.~~

Each of the Sponsor and the Company’s executive officers and directors have agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with a Business Combination and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with an initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination prior to February 9, 2023 (the “~~Combination Period~~~~”) or (ii) with respect to any other provision relating to shareholders’ rights or~~ ~~pre-initial~~ ~~business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a~~ ~~per-Public~~ Share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the amount on deposit in the Trust Account and not previously released to pay taxes, divided by the number of then issued and outstanding Public Shares.

The Company will have until February 9, 2023 to consummate a Business Combination. However, if the Company has not completed a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the Public Shares, at a ~~per-share~~ price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned and not previously released to the Company to pay taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then issued

~~ALTIMAR ACQUISITION CORP. II~~

N~~OTES~~TO C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

M~~ARCH~~ ~~31, 2021~~

~~(Unaudited)~~

and outstanding Public Shares, which redemption will completely extinguish the rights of the Public Shareholders as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining Public Shareholders and its board of directors, liquidate and dissolve, subject, in each case, to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

The Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares held by the Sponsor if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or any of its affiliates acquires Public Shares, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company fails to complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the offering price per Unit ($10.00).

In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (1) $10.00 per Public Share and (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share, due to reductions in the value of trust assets, in each case, net of the interest that may be withdrawn to pay taxes. This liability will not apply to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and as to any claims under the Company’s indemnity of the underwriters in the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “~~Securities Act~~”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

~~NOTE~~ 2. ~~REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENT~~

The Company previously accounted for its outstanding Warrants issued in connection with the Initial Public Offering as components of equity instead of as derivative liabilities. The warrant agreement governing the Warrants includes a provision that provides for potential changes to the settlement amounts depending upon the characteristics of the holder of the Warrant. In addition, the warrant agreement includes a provision that, in the event of a tender offer or exchange offer made to and accepted by holders of more than 50% of the outstanding shares of a single class of shares, all holders of the Warrants would be entitled to receive cash for their Warrants (the “~~tender offer provision~~~~”).~~

On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “~~Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)~~~~” (the “~~~~SEC Statement~~”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing the Warrants.

~~In further consideration of the SEC Statement, the Company’s management further evaluated the Warrants under Accounting Standards Codification (“~~~~ASC~~~~”) Subtopic~~ ~~815-40,~~ “~~Contracts in Entity’s Own Equity~~~~.” ASC Section~~ ~~815-40-15~~ ~~addresses equity versus liability treatment and classification of equity-linked financial instruments, including~~

~~ALTIMAR ACQUISITION CORP. II~~

N~~OTES~~TO C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

M~~ARCH~~ ~~31, 2021~~

~~(Unaudited)~~

~~warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock. Under ASC~~ ~~Section 815-40-15,~~ a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. Based on the Company’s management’s evaluation, the audit committee of the Company’s board of directors, in consultation with the Company’s management, concluded that the Private Placement Warrants are not indexed to the Company’s ordinary shares in the manner contemplated by ASC ~~Section 815-40-15~~ ~~because the holder of the instrument is not an input into the pricing of a~~ ~~fixed-for-fixed~~ option on equity shares. In addition, based on the Company’s management’s evaluation, the audit committee of the Company’s board of directors, in consultation with the Company’s management, concluded that the tender offer provision fails the “classified in stockholders’ equity” criteria as contemplated by ASC ~~Section 815-40-25.~~

As a result of the above, the Company should have classified the Warrants as derivative liabilities in its previously issued financial statement as of February 9, 2021. Under this accounting treatment, the Company is required to measure the fair value of the Warrants at the end of each reporting period as well as ~~re-evaluate~~ ~~the treatment of the Warrants and recognize changes in the fair value from the prior period in the Company’s results of operations for the current period.~~

The Company’s accounting for the Warrants as components of equity instead of as derivative liabilities did not have any effect on the Company’s previously reported investments held in the Trust Account or cash.

   As
Previously
Reported    Adjustments    As
Revised
Balance sheet as of February 9, 2021

Warrant liability
   $ —      $ 30,077,848    30,077,848
Class A Ordinary Shares subject to possible redemption
   330,429,040    (30,077,848 )    300,351,190
Class A Ordinary Shares
   146    300    446
Additional paid-in capital
   5,003,993    7,999,103    13,003,096
Accumulated deficit
   (5,000 )    (7,999,403 )    (8,004,403 )

~~NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

Basis of Presentation

The accompanying unaudited ~~condensed~~consolidated financial statements ~~have been~~are prepared in ~~accordance~~conformity with accounting principles generally accepted in the United States of America (“~~GAAP~~”("United States" or "U.S.") ~~for interim financial information~~ and, ~~in accordance with the instructions to the Quarterly Report on Form~~ ~~10-Q~~of necessity, include some amounts that are based upon management estimates and ~~Article 8 of Regulation~~ ~~S-X~~ ~~of the SEC. Certain information or footnote disclosures normally included in~~judgments. The accompanying unaudited consolidated financial statements ~~prepared~~include assets, liabilities, revenues and expenses of all majority-owned subsidiaries. Intercompany transactions and balances are eliminated in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all of the information and footnotes necessary for a complete presentation of financial position, results of operations or cash flows. consolidation.

In the Company's opinion, ~~of the Company’s management,~~ the accompanying unaudited ~~condensed~~consolidated financial statements ~~include~~contain all adjustments, consisting solely of adjustments of a normal, recurring nature, ~~which are~~ necessary ~~for a fair presentation of~~to present fairly the financial position, results of operations and cash flows for the periods presented.

The accompanying unaudited ~~condensed~~consolidated financial statements have been prepared by the Company and do not include all disclosures as required by accounting principles generally accepted in the U.S. and should be read in conjunction with the Company’s ~~prospectus relating to~~audited consolidated financial statements and notes thereto included in the ~~Initial Public Offering as filed with the SEC on February 5, 2021, as well as the Company’s Current~~Company's Annual Report on Form ~~8-K,~~10-K for the year ended December 31, 2021 (the "2021 Annual Report on Form 10-K").

Recently Adopted Accounting Standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) Section A - Leases: Amendments to the FASB Accounting Standards Codification. The standard requires lessees to recognize the assets and liabilities arising from leases on the balance sheet and retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. The Company adopted this standard and related amendments in the first quarter of 2022, using the modified retrospective approach. Using the modified retrospective approach the Company determined an incremental borrowing rate at the date of adoption based on the total lease term and total minimum rental payments.

The modified retrospective approach provides a method for recording existing leases at adoption with a cumulative adjustment to retained earnings. The Company elected the package of practical expedients which permits the Company to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any expired or existing leases as ~~filed~~of the effective date. The Company also elected the practical expedient to use hindsight when determining the lease term, and the practical expedient lease considerations to not allocate lease considerations between lease and non-lease components for real estate leases. As such, real estate lease considerations are treated as a single lease-component and accounted for accordingly. The Company excludes leases with an initial term of 12 months or less from the application of Topic 842.

Adoption of the new standard resulted in the recording of $3,122 and $8,195 of current lease liabilities and long-term lease liabilities, respectively, and $11,986 in corresponding right-of-use lease assets. The difference between the approximate value of the right-of-use lease assets and lease liabilities is attributable to future rent escalations. The cumulative change in the beginning accumulated deficit was $82 due to the adoption of Topic 842. There was no material impact on the Company’s consolidated statement of operations or consolidated statement of cash flows. The Company’s comparative periods continue to be presented and disclosed in accordance with legacy guidance in Topic 840.

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

Note 3. Business Combination with Fathom OpCo

On December 23, 2021, Altimar II and Fathom OpCo closed a series of transactions (collectively, the "Business Combination") pursuant to the Business Combination Agreement dated as of July 15, 2021, as amended (the "Agreement"), that resulted in the combined Company becoming a publicly-traded company on the New York Stock Exchange ("NYSE") with the ~~SEC~~Company controlling Fathom OpCo in an "UP-C" structure. At the closing on December 23, 2021 ("Closing Date"), Altimar II domesticated into a Delaware corporation, and the Company, Fathom Digital Manufacturing Corporation ("Fathom", the "Company", "we", or "our") , was formed. Following the closing, the public investors, the investors that purchased Class A common stock in the private placement offering ("PIPE Investors") and the Founders collectively held Class A common stock representing approximately 10.4% economic interest in Fathom OpCo, and the CORE Investors and the other Legacy Fathom Owners collectively held 89.6% of economic interest in Fathom OpCo in the form of Class A common stock. Additionally, the Company issued to the legacy Fathom owners shares of Class B common stock, which have no economic rights but entitle each holder to voting power (1 vote per share). Subsequently to the closing, the Company controls Fathom OpCo and is a holding company with no assets or operations other than its equity interest in Fathom OpCo.

The Business Combination was accounted for using the acquisition method with the Company as the accounting acquirer. Under the acquisition method of accounting, the Company's assets and liabilities were recorded at carrying value, and the assets and liabilities associated with Fathom OpCo were recorded at estimated fair value as of the closing date. The excess of the purchase price over the estimated fair values of the net assets acquired was recognized as goodwill. For accounting purposes, the acquirer is the entity that has obtained control of another entity and, thus, consummated a business combination. The determination of whether control has been obtained begins with the evaluation of whether control should be evaluated based on the variable interest or the voting interest model. If the acquiree is a variable interest entity, the primary beneficiary would be the accounting acquirer. Fathom OpCo met the definition of a variable interest entity, and the Company was determined to the be the primary beneficiary and is therefore also the accounting acquirer in the Business Combination.

As a result of the Business Combination, the Company's financial statement presentation distinguishes Fathom OpCo as the "Predecessor" ("2021 Predecessor Period" or "Predecessor Period") through the Closing Date. The Company is the "Successor" ("2022 Successor Period" or "Successor Period") for periods after the Closing Date. As a result of the application of the acquisition method of accounting in the Successor Period, the unaudited consolidated financial statements for the Successor Period are presented on a full step-up basis, and are therefore not comparable to the unaudited consolidated financial statements of the Predecessor Period that are not presented on the same full step-up basis.

In connection with the Business Combination, the Company incurred $19,010 of transaction expenses. These costs were recorded on the income statement of Altimar II prior to the Business Combination. Since the Predecessor period for purposes of these financial statements was deemed to be the historical results of Fathom OpCo, these transaction costs are not presented in either the Company's consolidated statement of comprehensive income (loss) for the 2021 Predecessor Period. However, these transaction costs are reflected in the accumulated deficit balance of the Company in the consolidated balance sheet as of December 31, 2021 (Successor).

The seller earnout contingent consideration below represents the estimated fair market value of the 9,000,000 Fathom Earnout Shares issued in conjunction with the Business Combination. The Fathom Earnout Shares will be settled with shares of Class A common stock or New Fathom Units and are accounted for as liability classified contingent consideration. The Fathom Earnout Shares vest in three equal tranches of 3,000,000 shares each at the volume-weighted average share price thresholds of $12.50, $15.00 and $20.00, respectively. The earnout period related to the Fathom Earnout Shares is five years from the date of the closing date. These estimated fair values are preliminary and subject to adjustment in subsequent periods.

In conjunction with the Business Combination, the Company recognized a deferred tax liability $17,573. The deferred tax liability was recorded on the standalone books of the Company with an offset to goodwill. The deferred tax liability is included in the other noncurrent liabilities caption in the table below.

The Business Combination was accounted for using the acquisition method of accounting and the fair value of the total purchase consideration transferred was $1,364,220. See below for a summary of the total consideration transferred.


	Total
Consideration Transferred:
Total cash consideration	$	53,332
Fathom earnout shares		88,160
Class A common stock transferred		375,478
Tax Receivable Agreement obligations to the sellers		4,300
Total consideration transferred to sellers		521,270
Non-controlling interest		842,950
Fair value of total consideration transferred	$	1,364,220

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

The following table sets forth the fair value of the assets and liabilities assumed in connection with the acquisition


	Total
Assets acquired:
Cash	$	9,577
Accounts receivable, net		24,712
Inventory		12,825
Prepaid expenses and other current assets		3,172
Property and equipment, net		44,397
Goodwill		1,189,762
Intangible assets		270,000
Other non-current assets		2,200
Total assets acquired		1,556,645
Liabilities assumed:
Accounts payable		9,808
Accrued expenses		4,860
Other current liabilities		5,226
Current portion of debt		152,000
Other noncurrent liabilities		20,531
Total liabilities assumed		192,425
Net identifiable assets acquired	$	1,364,220

The purchase price allocation is preliminary and subject to change during the measurement period, which is not to exceed one year from the acquisition date. At this time, the Company does not expect material changes to the assets acquired or liabilities assumed. Goodwill represents future economic benefits arising from acquiring Fathom OpCo's equity, primarily due to its strong market position and its assembled workforce that are not individually and separately recognized as intangible assets. A portion of the Goodwill is deductible for tax purposes. Goodwill is allocated to the Company's sole reportable segment and reporting unit.


Identifiable Intangible Assets	Provisional fair value		Provisional useful life (in years)
Trade name	$	70,000		15
Customer relationships		180,000		19
Developed software		4,300		5
Developed technology		15,700		5
	$	270,000

The weighted average amortization period for the amortizable intangibles assets is 16.9 years.

Note 4 - Fathom OpCo Predecessor Period Acquisitions

Fathom OpCo completed an acquisition of Summit Tooling Inc. ("Summit Tooling") and Summit Plastics LLC (“Summit Plastics”), together with Summit Tooling, (“Summit”) on February ~~16, 2021.~~1, 2021 in which it acquired 100 percent of the equity interests of Summit. In conjunction with the equity purchase, Fathom OpCo acquired the real estate in which Summit performs their operations. Summit Tooling designs and manufactures plastic injection molds and Summit Plastics provides molding of precision plastic components for a variety of industries. The ~~interim results~~primary reason for the acquisition was to expand Fathom OpCo's capabilities in manufacturing and expand its customer base of high-quality manufacturing and industrial technology companies in North America.

The transaction was accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification ("ASC") 805 - Business Combinations and the fair value of the total purchase consideration transferred consisted of the following:


Consideration	Total
Cash	$	10,875
Fair value of total consideration transferred	$	10,875

The consideration excluded $892 of buyer transaction expenses that are included in other expenses within the Predecessor Period consolidated statement of comprehensive loss. In addition, Fathom OpCo paid a transaction fee of $225 to an affiliate of the majority member of Fathom OpCo.

The goodwill recognized as part of the acquisition primarily reflects the value of the assembled workforce acquired and the value of future growth prospects and expected business synergies realized as a result of combining and integrating the acquired business into Fathom OpCo's existing platform. The goodwill recognized is partially deductible for tax purposes.

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

The following table sets forth the fair values of the assets acquired and liabilities assumed in connection with the acquisition of Summit:


Recognized amounts of identifiable assets acquired and liabilities assumed	Total
Cash	$	40
Accounts receivable, net		627
Inventory		339
Property and equipment, net		4,371
Intangible assets		5,000
Total assets acquired		10,377
Accounts payable		40
Deferred revenue		776
Other current liabilities		1,418
Total liabilities assumed		2,234
Total identifiable net assets		8,143
Goodwill	$	2,732

Below is a summary of the intangible assets acquired in the acquisition:

The amounts of revenue and net loss of Summit since the acquisition date included in the consolidated statements of comprehensive loss for the 2021 Predecessor Period are as follows:


	Period From January 1 - March 31, 2021 (Predecessor)
Revenue	$	1,175
Net (loss)	$	(1,271	)

Note 5. Revenue

The Company accounts for revenue in accordance with ASC 606. Revenue is recognized in five steps. The Company identifies the contract with the customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to the performance obligations, and recognizes revenue when (or as) each performance obligation is satisfied. Collectability is a required component of a valid contract. The Company assesses collectability based on a number of factors, including the customer’s past payment history and current creditworthiness. If collectability is not considered probable at inception, the Company will not have a valid contract.

Most of the Company’s revenue has one performance obligation and is recognized on a point-in-time basis upon shipment. The majority of the Company’s injection molding contracts have multiple performance obligations including one obligation to produce the mold and sample part and a second obligation to produce production parts. For injection molding contracts with multiple performance obligations, the Company allocates revenue to each performance obligation based on its relative standalone selling price and recognizes revenue for each performance obligation on a point-in-time basis upon shipment. We generally determine stand-alone selling price based on the price charged to customers. The Company’s payments terms are consistent with industry standards and never exceed 12 months.

Revenue by product line for the three months ended March 31, ~~2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods.~~

~~ALTIMAR ACQUISITION CORP. II~~

N~~OTES~~TO C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

M~~ARCH~~ ~~31, 2021~~

~~(Unaudited)~~

~~Emerging Growth Company~~

~~The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, as amended (the “~~~~JOBS Act~~~~”),~~2022 and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to ~~non-emerging~~ growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that, when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statement with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

~~Use of Estimates~~

The preparation of the condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires the Company’s management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which the Company’s management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

One of the more significant accounting estimates included in these condensed financial statements is the determination of the fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.

~~Cash and Cash Equivalents~~

~~The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of~~ March 31, 2021 are as follows:


	Three Months Ended
	March 31, 2022 (Successor)		March 31, 2021 (Predecessor)
Revenue:
Additive Manufacturing	$	4,149	$	4,540
Injection Molding		6,815		6,637
CNC Machining		13,326		4,831
Precision Sheet Metal		14,683		13,117
Ancillary Product Lines		1,568		1,409
Total revenue	$	40,541	$	30,534

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

Note 6. Inventories

Inventories are estimated at the lower of cost or net realizable value (“NRV”), with NRV based on selling prices inthe ordinary course of business, less costs of completion, disposal, and ~~December 31, 2020.~~transportation. Costs are determined on the first-in, first-out (“FIFO”) method.

~~Offering Costs~~

Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs amounted to $19,490,958, of which $18,735,887 were charged to shareholders’ equity upon the completionInventories consisted of the ~~Initial Public Offering~~following:


	Period Ended
	March 31, 2022			December 31, 2021
Raw materials	$	3,388		$	4,967
Work in process		7,839			5,368
Finished goods		1,689			3,506
Tooling		604			605
		13,520			14,446
Allowance for obsolescence		(979	)		(1,281	)
Total	$	12,541		$	13,165

Note 7. Property and ~~$755,071 were expensed on the condensed statement of operations.~~Equipment

~~ALTIMAR ACQUISITION CORP. II~~

N~~OTES~~TO C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

M~~ARCH~~ ~~31, 2021~~

~~(Unaudited)~~

~~Class A Ordinary Shares Subject to Possible Redemption~~

~~The Company accounts for the Company’s Class A ordinary shares, par value $0.0001 per share (the “~~~~Class~~ ~~A Ordinary Shares~~~~”), subject to possible redemption in accordance with the guidance in ASC Topic 480, “~~~~Distinguishing Liabilities from Equity~~~~.” The Class A Ordinary Shares subject to mandatory redemption are classified as a liability instrument~~Property and ~~are measured at fair value. Conditionally redeemable Class A Ordinary Shares (including Class A Ordinary Shares that feature redemption rights that are either within the control~~equipment, net, consisted of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, Class A Ordinary Shares are classified as shareholders’ equity. The Class A Ordinary Shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, as of March 31, 2021 and December 31, 2020, 29,262,494 and 0 Class A Ordinary Shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s condensed balance sheets.following:

~~Warrant Liability~~


	Period Ended
	March 31, 2022			December 31, 2021
Machinery and equipment	$	34,570		$	33,182
Furniture and fixtures		322			180
Computer equipment		671			804
Property and leasehold improvements		5,910			7,180
Construction in progress		6,058			2,859
Transportation equipment		450			454
Total		47,981			44,659
Accumulated depreciation and amortization		(1,733	)		(132	)
Total	$	46,248		$	44,527

~~The Company accounts~~Depreciation expense included in operating expenses for the Warrants as either equity-classified or liability-classified instruments based on an assessment of the Warrants’ specific terms and applicable authoritative guidance in the Financial Accounting Standards Board (the “~~FASB~~~~”) ASC Topic 480, “~~~~Distinguishing Liabilities from Equity~~~~,” and ASC Topic 815, “~~~~Derivatives and Hedging~~.” The assessment considers whether the Warrants are freestanding financial instruments pursuant to ASC Topic 480, whether Warrants meet the definition of a liability pursuant to ASC Topic 480 and whether the Warrants meet all of the requirements for equity classification under ASC Topic 815, including whether the Warrants are indexed to the Class A Ordinary Shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of issuance of the Warrants and as of each subsequent quarterly period end date while the Warrants are outstanding.

~~For issued or modified Warrants that meet all of the criteria for equity classification, the Warrants are required to be recorded as a component of additional~~ ~~paid-in~~ capital at the time of issuance. For issued or modified Warrants that do not meet all the criteria for equity classification, the Warrants are required to be recorded at their initial fair value on the date of issuance and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a ~~non-cash~~ ~~gain or loss on the statements of operations. The fair value of the Warrants was estimated using a Monte Carlo simulation approach (see Note 10).~~

~~Income Taxes~~

~~The Company accounts for income taxes under ASC Topic 740, “~~~~Income Taxes~~,” which prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2021 and December 31, 2020, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.

~~Net Income (Loss) per Ordinary Share~~

Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. The calculation of diluted income (loss) per share does not consider the effect of (i) the Public Warrants issued in connection with the Initial Public Offering, (ii) the exercise of the over-allotment option and (iii) the Private Placement Warrants since the inclusion of the Private Placement Warrants would be anti-dilutive.

~~ALTIMAR ACQUISITION CORP. II~~

N~~OTES~~TO C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

M~~ARCH~~ ~~31, 2021~~

~~(Unaudited)~~

~~The Company’s statement of operations includes a presentation of income (loss) per share for ordinary shares subject to possible redemption in a manner similar to the~~ ~~two-class~~ method of income (loss) per ordinary share. Net income per ordinary share, basic and diluted, for redeemable Class A Ordinary Shares is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of redeemable Class A Ordinary Shares outstanding since original issuance. Net loss per share, basic and diluted, for ~~non-redeemable~~ ~~Class B ordinary shares, par value $0.0001 per share (the “~~~~Class~~ ~~B Ordinary Shares~~~~” or the “~~~~Founder Shares~~~~”), is calculated by dividing the net loss, adjusted for income attributable to redeemable Class A Ordinary Shares, by the weighted average number of~~ ~~non-redeemable~~ ~~Class B Ordinary Shares outstanding for the period.~~ ~~Non-redeemable~~ ~~Class B Ordinary Shares include the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.~~

~~The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts):~~

   Three Months
Ended
March 31,
2021
Redeemable Class A Ordinary Shares

Numerator—earnings allocable to redeemable Class A Ordinary Shares Interest income
   $ 1,095


Net earnings
   $ 1,095
Denominator—weighted average redeemable Class A Ordinary Shares Redeemable Class A Ordinary Shares, basic and diluted
   34,500,000
Earnings / basic and diluted redeemable Class A Ordinary Shares
   $ 0.00
Non-redeemable Class A Ordinary Shares and Class B Ordinary Shares Numerator—net loss minus redeemable net earnings

Net loss
   $ (15,725,653 )
Redeemable net earnings
   (1,095 )


Non-redeemable net loss
   $ (15,726,748 )
Denominator—weighted average non-redeemable Class A Ordinary Shares and Class B Ordinary Shares

Non-redeemable Class A Ordinary Shares and Class B Ordinary Shares, basic and diluted
   8,125,000
Loss / basic and diluted non-redeemable Class A Ordinary Shares and Class B Ordinary Shares
   $ (1.94 )

~~As of March 31, 2021, basic and diluted shares are the same as there are no~~ ~~non-redeemable~~ ~~securities that are dilutive to the Company’s shareholders.~~

~~Concentration of Credit Risk~~

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times may exceed the Federal Depository Insurance Corporation coverage limit of $250,000. The Company has not experienced losses on these accounts and the Company’s management believes the Company is not exposed to significant risks on such account.

~~ALTIMAR ACQUISITION CORP. II~~

N~~OTES~~TO C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

M~~ARCH~~ ~~31, 2021~~

~~(Unaudited)~~

~~Fair Value of Financial Instruments~~

~~The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “~~~~Fair Value Measurement~~~~,” approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature, except for the warrant liability (see Note 10).~~

~~Recent Accounting Standards~~

~~In August 2020, the FASB issued Accounting Standards Update No.~~ ~~2020-06, ”Debt—Debt~~ ~~with Conversion and Other Options (Subtopic~~ ~~470-20)”~~ ~~and “~~~~Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic~~ ~~815-40):~~ ~~Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity~~~~” (“~~~~ASU~~ ~~2020-06~~~~”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU~~ ~~2020-06~~ removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU ~~2020-06~~ ~~is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU~~ ~~2020-06~~ ~~effective as of January 1, 2021. The adoption of ASU~~ ~~2020-06~~ ~~did not have an impact on the Company’s financial statements.~~

The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements.

~~NOTE 4. INITIAL PUBLIC OFFERING~~

The Company sold 34,500,000 Units in the Initial Public Offering, which includes a full exercise by the underwriters of their over-allotment option in the amount of 4,500,000 Units at a purchase price of $10.00 per Unit. Each Unit consists of one Class A Ordinary Share and ~~one-fourth~~ ~~of one redeemable Public Warrant. Each whole Public Warrant entitles the holder to purchase one Class A Ordinary Share at an exercise price of $11.50 per Class A Ordinary Share (see Note 9).~~

~~NOTE 5. PRIVATE PLACEMENT~~

Simultaneously with the closing of the Initial Public Offering and the underwriters’ full exercise of their over-allotment option, the Sponsor purchased an aggregate of 9,900,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $9,900,000 in a private placement transaction. Each Private Placement Warrant is exercisable to purchase one Class A Ordinary Share at a price of $11.50 per Class A Ordinary Share, subject to adjustment (see Note 9). A portion of the proceeds from the sale of the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares, subject to the requirements of applicable law, and the Private Placement Warrants will expire worthless.

~~NOTE 6. RELATED PARTY TRANSACTIONS~~

~~Founder Shares~~

On December 15, 2020, the Sponsor paid $25,000 to cover certain offering and formation costs of the Company in consideration for 8,625,000 Class B Ordinary Shares. On January 28, 2021, the Sponsor transferred 25,000 Founder Shares to certain of the Company’s directors, resulting in the Sponsor holding 8,450,000 Founder Shares. The Founder Shares included an aggregate of up to 1,125,000 Founder Shares that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised, so that the number of the Founder Shares would equal, on an ~~as-converted~~ basis, approximately 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering. As a result of the underwriters’ election to fully exercise their over-allotment option on February 9, 2021, the 1,125,000 Founder Shares are no longer subject to forfeiture.

~~ALTIMAR ACQUISITION CORP. II~~

N~~OTES~~TO C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

M~~ARCH~~ ~~31, 2021~~

~~(Unaudited)~~

The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier of (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the closing price of the Class A Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share ~~sub-divisions,~~ ~~share dividends, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within any~~ ~~30-trading~~ day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Public Shareholders having the right to exchange their Class A Ordinary Shares for cash, securities or other property.

~~Administrative Services Agreement~~

The Company entered into an agreement, commencing on February 4, 2021, through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay an affiliate of the Sponsor a sum of $10,000 per month for office space and secretarial and administrative services. For the three months ended March 31, 2022 and March 31, 2021 ~~the Company incurred $20,000 in fees for these services, of which such amount is~~ was $136 and $116, respectively. Depreciation expense included in ~~accounts payable and accrued expenses in the accompanying condensed balance sheets.~~

~~Promissory Note—Related Party~~

~~On December 15, 2020, the Company issued an unsecured promissory note (the “~~~~Promissory Note~~~~”) to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount~~cost of ~~$300,000. The Promissory Note was~~ ~~non-interest~~ bearing and payable on the earlier of (i) December 31, 2021 and (ii) the completion of the Initial Public Offering. The outstanding balance under the Promissory Note of $94,890 was repaid at the closing of the Initial Public Offering on February 9, 2021.

~~Related Party Loans~~

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s executive officers and directors may, but are not obligated to, loan the Company funds as may be required (the “~~Working Capital Loans~~”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Exceptrevenues for the ~~foregoing, the terms of the Working Capital Loans, if any, have not been determined~~three months ended March 31, 2022 and no written agreements exist with respect to the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $2,000,000 of the Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. As of March 31, 2021 was $1,465, and ~~December 31, 2020, there were no amounts outstanding under the Working Capital Loans.~~$854, respectively.

Note 8. Goodwill and Intangible Assets, net

A rollforward of goodwill is as follows:

~~NOTE 7. COMMITMENTS AND CONTINGENCIES~~


(in thousands)
Balance at December 31, 2021	$	1,189,464
Measurement period adjustments		298
Balance at March 31, 2022	$	1,189,762

~~Risks and Uncertainties~~

~~Management continues to evaluate the impact~~Intangible assets, net consisted of the ~~COVID-19~~ ~~pandemic and has concluded that, while it is reasonably possible that the~~ ~~COVID-19~~ ~~pandemic could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact~~following:


	March 31, 2022						December 31, 2021
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net

Trade name	$	70,000	$	1,283	$	68,717	$	70,000	$	98	$	69,902
Customer relationships		180,000		2,601		177,399		180,000		252	$	179,748
Developed software		15,700		863		14,837		4,300		6	$	4,294
Developed technology		4,300		236		4,064		15,700		22	$	15,678
Total intangible assets	$	270,000	$	4,983	$	265,017	$	270,000	$	378	$	269,622

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

Aggregate amortization expense related to intangible assets, excluding goodwill which is not ~~readily determinable as of~~amortized, for the ~~date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.~~

~~ALTIMAR ACQUISITION CORP. II~~

N~~OTES~~TO C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

M~~ARCH~~three months ended March 31, ~~2021~~

~~(Unaudited)~~

~~Registration~~2022 and ~~Shareholder Rights~~

Pursuant to a registration and shareholder rights agreement entered into on February 4, 2021, the holders of the Founder Shares, the Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (and any Class A Ordinary Shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loans) will be entitled to registration rights pursuant to a registration and shareholder rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

~~Underwriting Agreement~~

The underwriters are entitled to a deferred underwriting fee of $0.35 per Unit, or $12,075,000 in the aggregate. The deferred underwriting fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

~~NOTE 8. SHAREHOLDERS’ EQUITY~~

~~Preference Shares~~—The Company is authorized to issue 5,000,000 preference shares, with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of March 31, 2021 was $4,604and ~~December 31, 2020, there were no preference shares issued or outstanding.~~$2,301, respectively. There are 0 intangible assets, other than goodwill, with indefinite useful lives.

~~Class~~ ~~A Ordinary Shares~~—

The ~~Company is authorized to issue 500,000,000 Class A Ordinary Shares, with a par value of $0.0001 per share. Holders~~following table represents the estimated aggregate amortization expense for each of the Class A Ordinary Shares are entitled to one vote for each Class A Ordinary Share. As of March 31, 2021, there were 5,237,506 Class A Ordinary Shares issued and outstanding, excluding 29,262,494 Class A Ordinary Shares subject to possible redemption. As of December 31, 2020, there were no Class A Ordinary Shares issued or outstanding.five succeeding fiscal calendar years.

~~Class~~ ~~B Ordinary Shares~~—The Company is authorized to issue 50,000,000 Class B Ordinary Shares, with a par value of $0.0001 per share. Holders of the Class B Ordinary Shares are entitled to one vote for each Class B Ordinary Shares. As of March 31, 2021 and December 31, 2020, there were 8,625,000 Class B ordinary shares issued and outstanding.


Year	Aggregate Amortization
2022	$	18,140
2023		18,140
2024		18,140
2025		18,140
2026		18,041

Only holders of the Class B Ordinary Shares will have the right to vote on the election of directors prior to the Business Combination. Holders of the Class A Ordinary Shares and the Class B Ordinary Shares will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law. In connection with a Business Combination, the Company may enter into a shareholders agreement or other arrangements with the shareholders of the target or other investors to provide for voting or other governance arrangements that differ from those in effect upon completion of the Initial Public Offering.

The Class B Ordinary Shares will automatically convert into the Class A Ordinary Shares at the time of a Business Combination or earlier at the option of the holders thereof at a ratio such that the number of the Class A Ordinary Shares issuable upon conversion of all of the Founder Shares will equal, in the aggregate, on an ~~as-converted~~ basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Initial Public Offering, plus (ii) the total number of the Class A Ordinary Shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding the Class A Ordinary Shares or equity-linked securities exercisable for or convertible into the Class A Ordinary Shares issued, deemed issued or to be issued to any seller of an interest in the target to the Company in a Business Combination and any Private Placement Warrants issued to the Sponsor, its affiliates or any member of the Company’s management team upon conversion of the Working Capital Loans. In no event will the Class B Ordinary Shares convert into the Class A Ordinary Shares at a rate of less than ~~one-to-one.~~

~~ALTIMAR ACQUISITION CORP. II~~

N~~OTES~~TO C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

M~~ARCH~~ ~~31, 2021~~

~~(Unaudited)~~

Note 9. Warrant Liability

~~NOTE 9. WARRANT LIABILITY~~

As of March 31, ~~2021, there were~~ 2022, the Company had 8,625,000 Public Warrants outstanding with a fair value price of $0.76per Public Warrant, and 9,900,000 Private Placement Warrants outstanding with a fair value price of $1.94 per Private Placement Warrant.

The below table summarizes the number of outstanding warrants and the fair value as of March 31, 2022. See Note 13 for further information.


	Fair Value		# of Warrants

Public Warrants	$	6,600		8,625,000
Private Placement Warrants	$	19,200		9,900,000

The below table summarizes the number of outstanding warrants and the fair value as of December 31, 2021. See Note 13 for further information.


	Fair Value		# of Warrants

Public Warrants	$	7,600		8,625,000
Private Placement Warrants	$	26,300		9,900,000

Note 10. Debt

On December 23, 2021, Fathom OpCo entered into the New Credit Agreement, which included a $50,000 revolving credit facility and $125,000 term loan. The Company's borrowings under the revolving credit agreement were $22,000 at March 31, 2022. The loans made under the New Credit Agreement will mature in December 2026.

The Company recorded deferred financing costs of $1,828 in conjunction with the New Credit Agreement and the balance is presented net within Long-term debt, net on the Company's consolidated balance sheet. The Company amortizes the deferred financing costs using the effective interest method.

The revolving credit facility under the New Credit Agreement is available for working capital and other general corporate purposes and includes a letter of credit sub-facility of up to $5,000. The New Credit Agreement also includes an uncommitted incremental facility, which, subject to certain conditions, provides for additional term loan facilities, an increase in commitments under the New Credit Agreement and/or an increase in commitments under the revolving credit facility, in an aggregate amount of up to $100,000. The Company is subject to various financial covenants, including quarterly net leverage and interest coverage covenants. The Company is in compliance with all debt covenants related to the New Credit Agreement as of March 31, 2022.

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

The Company’s debt as of March 31, 2022 and December 31, 2021 is as follows:


	As of March 31, 2022						As of December 31, 2021
Debt Description	Interest Rate			Amount			Interest Rate			Amount
New Credit Agreement Revolver		3.99	%		22,000			3.60	%		27,000
New Credit Agreement Term Loan		4.51	%		124,219			3.72	%		125,000
Total principal long-term debt					146,219						152,000
Debt issuance costs					(1,713	)					(1,812	)
Total debt, net					144,506						150,188
Less: current portion of debt					25,423						29,697
Long-term debt, net of current portion				$	119,083					$	120,491

Interest on all debt is payable in 90 days increments, with the unpaid amount due upon maturity. Interest expense associated with long-term debt for the three months ended March 31, 2022 and March 31, 2021 was $1,473, and $2,114, respectively. Included in interest expense, net on the accompanying unaudited consolidated statements of comprehensive loss is amortization of debt issuance costs for the three months ended March 31, 2022 and March 31, 2021 was $100, and $96, respectively.

In December 2021, Fathom OpCo entered into a financing agreement through its insurance broker to spread the payment of its annual director’s and officer’s insurance premium over a ten-month period. Total financed payments of $3,001, including a $35 financing fee at a 2.57% annual rate, are to be made between January 2022 and October 2022. As of March 31, 2022 the Company recognized $2,176 of prepaid assets and $2,090 of other current liabilities in the unaudited consolidated financial statements. For the three months ended March 31, 2022 the Company recognized $842 of insurance expense in selling, general and administrative ("SG&A") expenses.

Note 11. Other (Income) Expense

Other income and expense, net is comprised of the following for the periods ended March 31, 2022, and March 31, 2021:


	Three Months Ended
	March 31, 2022 Successor			March 31, 2022 Predecessor
Acquisition expenses	$	-		$	1,339
Loss on sale of assets		24			83
Other		92			118
Other expense		116			1,540
Change in fair value of Fathom and Sponsor Earnout Shares		(18,970	)		-
Change in fair value of Warrants		(8,100	)		-
Other		(95	)		(94	)
Other income		(27,165	)		(94	)
Other (income) expense, net	$	(27,049	)	$	1,446

Note 12. Shared Based Compensation

On December 23, 2021, the Company executed the Fathom Digital Manufacturing 2021 Omnibus Incentive Plan (the "2021 Omnibus Plan") to encourage the profitability and growth of the Company through short-term and long-term incentives that are consistent with the Company's objectives. The 2021 Omnibus Plan provides that the Company may grant options, stock appreciation rights, restricted shares, restricted stock units, performance-based awards (including performance-based restricted shares and restricted stock units), other share-based awards, other cash-based awards, and any combination of the foregoing.

Stock Options

The stock option valuation assumptions for the three months ended March 31, 2022 are provided in the table below.


	March 31, 2022
Expected term (years)	4.5
Expected volatility		58.7	%
Expected dividend yield		0.0	%
Risk-free interest rate		1.91	%
Fair value of share	$	4.26

In February 2022, the Company granted stock options to purchase up to 317,091 shares of Class A common stock at a weighted average exercise price of $8.71 per share which generally vest over a requisite service period of three years. The total intrinsic value of options exercised during the three months ended March 31, 2022 was $0.

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

At March 31, 2022, there was approximately $1,312 of total unrecognized compensation cost related to unvested stock options granted under the 2021 Omnibus Plan. That cost is expected to be recognized over a weighted average period of 2.92 years as of March 31, 2022.

The Company currently uses authorized and unissued shares to satisfy share award exercises.

Restricted Stock Units

A summary of the status of the Company's restricted stock unit activity and the changes during the three months ended March 31, 2022 are as follows:


	Shares		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Non-vested at December 31, 2021		6,472,617	$	8.21	$	-
Granted		727,601		9.01		-
Vested		-		-		-
Forfeited		-		-		-
Non-vested at March 31, 2022		7,200,218	$	9.01	$	-

At March 31, 2022, there was approximately $10,259 of total unrecognized compensation cost related to unvested restricted stock units granted under the 2021 Omnibus Plan. That cost is expected to be recognized over a weighted average period of 2.85 years as of March 31, 2022.

Total stock based compensation expenses was $2,130 and $139 for the three months ended March 31, 2022 and 2021, respectively.

Note 13. Earnings Per Share and Earnings Per Unit

2022 Successor

Basic net income per share is computed based on the weighted average number of common shares outstanding. Diluted net loss per share is computed based on the weighted average number of common shares outstanding, increased by the number of any additional shares that would have been outstanding had any potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased from the proceeds from issuance of the potentially dilutive shares.

Only the Company's Class A common stock participates in the Company’s undistributed earnings. As such, the Company’s undistributed earnings are allocated entirely to shares of Class A common stock based on the weighted Class A common stock outstanding the three months ending March 31, 2022.

The Company's basic earnings per share calculation is as follows:


	March 31, 2022
	Class A
Basic Earnings Per Share:
Numerator
Net income	$	17,839
Less: Net loss attributable to non-controlling interests		(5,259	)
Net income attributable to Class A common stock	$	23,098
Denominator
Weighted average shares of Class A common stock outstanding-basic		50,785,656
Basic Earnings Per Share	$	0.45

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

The Company's diluted earnings per share calculation is as follows:


	March 31, 2022
	Class A
Diluted Earnings Per Share:
Numerator
Net income attributable to holders of Class A common stock	$	17,839
Denominator
Weighted average shares of Class A common stock outstanding-basic		50,785,656
Effect of Dilutive Securities
Assumed exchange for shares of Class A common stock		85,054,317
Weighted average shares of Class A common stock outstanding-diluted		135,839,973
Diluted Earnings Per Share	$	0.13

2021 Predecessor

Basic net loss per unit is computed based on the weighted average number of common units outstanding. Diluted net loss per unit is computed based on the weighted average number of common units outstanding, increased by the number of any additional units that would have been outstanding had any potentially dilutive common units been issued and reduced by the number of units Fathom OpCo could have repurchased from the proceeds from issuance of the potentially dilutive units. Fathom OpCo had no dilutive instruments outstanding as of March 31, 2021. As a result, basic and diluted earnings per units are the same as of March 31, 2021.

Fathom OpCo's Class A common units and Class B common units participate equally in Fathom OpCo's undistributed earnings. As such, Fathom OpCo’s undistributed earnings are allocated pro-rata to the Class A common units and Class B common units based on the weighted Class A common units and Class B common units outstanding as of March 31, 2021 such that earnings per unit for Class A common units and Class B common units are the same in each period.


	Period From
	January 1 - March 31, 2021 (Predecessor)			January 1 - March 31, 2021 (Predecessor)
	Class A			Class B
Basic and Diluted Loss Per Unit:
Numerator
Net loss	$	(355	)	$	(145	)
Less: annual dividends on redeemable preferred units		(1,614	)		(660	)
Net loss attributable to common unitholders		(1,969	)		(805	)
Denominator
Weighted-average units used to compute basic earnings per unit		5,480,611			2,242,981
Basic and Diluted Loss Per Unit	$	(0.36	)	$	(0.36	)

Note 14. Shareholders' Equity, Noncontrolling interest, and Members' Equity

The Company’s equity consists of a total of 500,000,000 authorized shares across all classes of capital stock, which the Company has the authority to issue. The 500,000,000 authorized shares consist of 10,000,000 authorized shares of preferred stock with a par value of $0.0001 per share, 300,000,000 authorized shares of Class A common stock with a par value of $0.0001 per share, 180,000,000 shares of Class B common stock with a par value of $0.0001 par value per share, and 10,000,000 shares of Class C common stock with a par value of $0.0001 per share.

As of March 31, 2022, the Company had 0 outstanding shares of Preferred Stock, 50,785,656 outstanding shares of Class A common stock, 84,294,971 outstanding shares of Class B common stock, and 0 outstanding shares of Class C common stock.

The table below demonstrates the calculation of the comprehensive loss attributable to the non-controlling interest holders for the 2022 Successor Period.


	Period From January 1, 2022 - March 31, 2022 (Successor)
Fathom OpCo comprehensive loss		(8,429	)
Non-controlling interest percentage		62.4	%
Comprehensive loss attributable to non-controlling interest		(5,259	)

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

Predecessor

Fathom OpCo's equity in the 2021 Predecessor Period consists of Class A common units and Class B common units.

The following table represents a summary of the Company’s Members' Equity as of March 31, 2021 (Predecessor):


	March 31, 2021 (Predecessor)
Class A common units		5,480,611
Class B common units		2,242,981

Note 15. Leases

The Company leases certain manufacturing facilities, office space, and equipment and determines if an arrangement is a lease at inception. Amounts associated with operating leases and financing leases are included in right-of-use lease assets (“ROU assets”), current lease liabilities and long-term lease liabilities in the Company's unaudited consolidated balance sheet.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

If the leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The incremental borrowing rate is determined using a portfolio approach based on the rate of interest that we would pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses quoted interest rates obtained from financial institutions as an input to derive its incremental borrowing rate as the discount rate for the lease.

Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of Topic 842, we combine lease and nonlease components.

Certain leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or more, and the exercise of lease renewal options under these leases is at our sole discretion. Lease terms include the non-cancellable portion of the underlying leases along with any reasonably certain lease periods associated with available renewal periods. Certain of the Company’s operating leases include variable rental payments based on a percentage change of certain CPI indices. Variable rental payments are recognized in the consolidated statement of comprehensive income (loss) in the period in which the obligation for those payments is incurred. The depreciable life of assets and leasehold improvements are limited by the expected lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.


	Balance Sheet Location	March 31, 2022
Assets
Operating	Right-of-use operating lease assets, net	$	8,808
Financing	Right-of-use financing lease assets, net		2,417
Total lease assets		$	11,225
Liabilities
Current
Operating	Current operating lease liability	$	2,937
Financing	Current financing lease liability		185
Non-Current
Operating	Long-term operating lease liability		5,917
Financing	Long-term financing lease liability		2,278
Total lease liability		$	11,317

The following table sets forth our lease costs included in our unaudited consolidated statement of comprehensive income (loss):


	March 31, 2022
Operating lease cost	$	803
Short-term lease cost		4
Financing lease cost:
Amortization of ROU assets		54
Interest on lease liabilities		35
Sublease income		(34	)
Total lease costs	$	862

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)


	March 31, 2022
Weighted-average remaining lease term (years)
Operating		3.7
Financing		8.9
Weighted-average discount rate
Operating		4.2	%
Financing		5.6	%

Maturities of Leases


	Operating Leases		Financing Leases		Total
2022	$	2,438	$	239	$	2,677
2023		2,951		325		3,276
2024		1,780		335		2,115
2025		1,126		345		1,471
2026		638		356		994
Thereafter		693		1,566		2,259
Total future lease payments		9,627		3,167		12,794
Less: Discount		773		704		1,477
Present value of lease liability	$	8,854	$	2,463	$	11,317

Disclosures related to period prior to adoption of the Topic 842

Operating lease rent expense was $767 for the three months ended March 31, 2021.

As of December 31, ~~2020, there~~2021, future minimum lease payment obligations were no Public Warrants outstanding. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (i) 30 days after the completion of a Business Combination and (ii) one year from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.as follows:

The Company will not be obligated to deliver any Class A Ordinary Shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such exercise unless a registration statement under the Securities Act with respect to the Class A Ordinary Shares underlying the Public Warrant is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No Public Warrant will be exercisable and the Company will not be obligated to issue a Class A Ordinary Share upon exercise of a Public Warrant unless the Class A Ordinary Share issuable upon such exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the Public Warrant.


Year	Total
2022	$	3,212
2023		3,027
2024		1,959
2025		1,253
2026		443
Thereafter		328
Total future lease payments	$	10,222

The Company has agreed that as soon as practicable, but in no event later than 20 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A Ordinary Shares issuable upon exercise of the Public Warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days following the closing of a Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A Ordinary Shares until the Public Warrants expire or are redeemed, as specified in the warrant agreement; ~~provided~~, ~~however~~, that if the Class A Ordinary Shares are at the time of any exercise of a Public Warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their Public Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement for the registration, under the Securities Act, of the Class A Ordinary Shares issuable upon exercise of the Public Warrants, but the Company will use its commercially reasonable efforts to register or qualify for sale the Class A Ordinary Shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the Public Warrants is not effective by the 60th day after the closing of a Business Combination, holders of Public Warrants may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise Public Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonable efforts to register or qualify the Class A Ordinary Shares under applicable blue sky laws to the extent an exemption is not available.

~~Redemption of the Warrants when the price per Class~~ ~~A Ordinary Share equals or exceeds $18.00.~~ ~~Once the Warrants become exercisable, the Company may redeem the outstanding Warrants (except as described with respect to the Private Placement Warrants):~~

~~in whole and not in part;~~

~~at a price of $0.01 per Warrant;~~

~~upon a minimum of 30 days’ prior written notice of redemption to each holder of the Warrant; and~~

~~ALTIMAR ACQUISITION CORP. II~~

N~~OTES~~TO C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

M~~ARCH~~ ~~31, 2021~~

~~(Unaudited)~~

~~if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a~~ ~~30-trading~~ ~~day period ending three trading days before the Company sends the notice of redemption to the holders of the Warrants.~~

If and when the Warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

~~Redemption of the Warrants when the price per Class~~ ~~A Ordinary Share equals or exceeds $10.00~~~~. Once the Warrants become exercisable, the Company may redeem the outstanding Warrants:~~

~~in whole and not in part;~~

at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their Warrants on a cashless basis prior to redemption and receive that number of shares determined based on the redemption date and the fair market value of the Class A Ordinary Shares;

~~if, and only if, the closing price of the Class A Ordinary Shares equal or exceeds $10.00 per Class A Ordinary Share (as adjusted) for any 20 trading days within the~~ ~~30-trading~~ ~~day period ending three trading days before the Company send the notice of redemption of the holders of the Warrants.~~

If the Company calls the Public Warrants for redemption, as described above, the Company’s management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of the Class A Ordinary Shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of the Class A Ordinary Shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of the Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to their Public Warrants. Accordingly, the Public Warrants may expire worthless.

In addition, if (x) the Company issues additional Class A Ordinary Shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A Ordinary Share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or holders of the Class B Ordinary Shares or their respective affiliates, without taking into account any Founder Shares held by the Sponsor, holders of the Class B Ordinary Shares or such affiliates, as applicable, prior to such issuance) (the “~~Newly Issued Price~~”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A Ordinary Shares during the 20 trading day period starting on the trading day after the day on which the Company consummates its Business Combination (such price, the “~~Market Value~~”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.

As of March 31, 2021, there were 9,900,000 Private Placement Warrants outstanding. As of December 31, 2020, there were no Private Placement Warrants outstanding. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A Ordinary Shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be ~~non-redeemable,~~ except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

~~ALTIMAR ACQUISITION CORP. II~~

N~~OTES~~TO C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

M~~ARCH~~ ~~31, 2021~~

~~(Unaudited)~~

Note 16. Fair Value Measurement

~~NOTE 10. FAIR VALUE MEASUREMENTS~~

The fair value of the Company’s financial assets and liabilities reflects the Company’s management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1—1 — Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2—2 — Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3—3 — Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

As of March 31, 2021, assets held in the Trust Account were comprised of $345,001,095 in money market funds, which are invested primarily in U.S. Treasury securities. Through March 31, 2021, the Company did not withdraw any interest income from the Trust Account.

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

The following table presents information about the Company’s ~~assets~~liabilities that are measured at fair value on a recurring basis as of March 31, ~~2021~~2022.


	Fair Value Measurements as of March 31, 2022
Description	Level 1		Level 2		Level 3		Total
Liabilities:
Tax Receivable Agreement	$	-	$	-	$	4,600	$	4,600
Fathom OpCo acquisitions contingent consideration		-		-		3,598		3,598
Sponsor Earnout Shares Liability		-		-		7,020		7,020
Fathom Earnout Shares Liability		-		-		47,690		47,690
Warrant liability – Public Warrants		6,600		-		-		6,600
Warrant liability – Private Placement Warrants		-		-		19,200		19,200
	$	6,600	$	-	$	82,108	$	88,708

The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis as of December 31, 2021.


	Fair Value Measurements as of December 31, 2021
Description	Level 1		Level 2		Level 3		Total
Liabilities:
Tax Receivable Agreement	$	-	$	-	$	4,600	$	4,600
Fathom OpCo acquisitions contingent consideration		-		-		3,598		3,598
Sponsor Earnout Shares Liability		-		-		9,380		9,380
Fathom Earnout Shares Liability		-		-		64,300		64,300
Warrant liability – Public Warrants		7,600		-		-		7,600
Warrant liability – Private Placement Warrants		-		-		26,300		26,300
	$	7,600	$	-	$	108,178	$	115,778

The following table presents a reconciliation of the beginning and ~~indicates~~ending balances of recurring level 3 fair value measurements.


	Level 3 Liabilities
	Tax Receivable Agreement liability		Fathom OpCo acquisitions contingent consideration		Sponsor Earnout shares liability			Fathom Earnout shares liability			Warrant liability – Private Placement Warrants			Total
Balance at December 31, 2021	$	4,600	$	3,598	$	9,380		$	64,300		$	26,300		$	108,178
Net gain (1)		-		-		(2,360	)		(16,610	)		(7,100	)		(26,070	)
Ending balance at March 31, 2022	$	4,600	$	3,598	$	7,020		$	47,690		$	19,200		$	82,108

(1) Net gains on changes in recurring level 3 fair value measurements are recognized in Other income in our unaudited consolidated statement of comprehensive loss.

Valuation Methodologies for Fair Value Measurements Categorized within Levels 2 and 3

Tax Receivable Agreement ("TRA")

The fair value of the TRA is based on multiple inputs and assumptions input into a Monte Carlo simulation model. The significant inputs into this model are the following: a corporate tax rate of 26.9%, an annual TRA payment date of February 16, existing non-controlling interest percentage of 37.6%, initial amortization deductions of $52,400, $126,000 of taxable income forecast by 2030, a sell-down schedule which reflects the expected sale of our Class A common units in Fathom OpCo ("New Fathom Units") by legacy Fathom OpCo shareholders, a Class A common stock price as of March 31, 2022 (Successor) of $6.18, volatility of 85.9%, correlation between taxable income and the Class A common stock price of 25%, and a cost of debt range from 5.6% to 9.4%

Legacy Fathom OpCo Acquisitions Contingent Consideration

The fair values for contingent consideration payable are determined by using a discounted cash flow approach with unobservable inputs and is classified as a Level 3 liability in the fair value ~~hierarchy~~hierarchy. The Company’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each entity to which the contingent consideration relates to, for example EBITDA targets for a given period.

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

Earnout Shares Liability

The fair values for the Earnout Shares are estimated using a Monte Carlo simulation assuming Geometric Brownian Motion in a risk-neutral framework. The Monte Carlo simulation considers daily simulated stock prices as a proxy for the Company's daily volume-weighted average price ("VWAP"). The key inputs into the valuation ~~inputs~~of the ~~Company utilized to determine such fair value:~~Earnout Shares are an expected term of five years, a risk-free rate of 1.25%, operating asset volatility of 87.6%, and equity volatility of 91.7%. The operating asset volatility and the equity volatility assumptions are based on a blended average of operating and equity volatility, respectively, of publicly traded companies within the Company's peer group.

Description
   Level    March 31,
2021
Assets:

Marketable securities held in the Trust Account
   1    345,001,095
Liabilities:

Warrant liability—Public Warrants
   3    $ 15,330,312
Warrant liability—Private Placement Warrants
   3    $ 20,572,742

Private Placement Warrants

The ~~Warrants were accounted for as liabilities in accordance with ASC~~ ~~815-40~~ ~~and are presented within warrant liability in the accompanying condensed balance sheet. The warrant~~Warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of ~~warrant~~Warrant liabilities in the ~~condensed~~ statement of operations.

The ~~Warrants were initially~~Private Placement warrants are valued using a Monte Carlo simulation model, which is considered to be a Level 3 fair value measurement. The ~~Monte Carlo simulation model’s primary unobservable input utilized in determining the fair value of the Warrants is the expected~~ volatility of the ordinary shares. The expected volatility as of the closing date of the Initial Public Offering was derived from observable public warrant pricing on comparable ‘blank-check’ companies without an identified target. The expected volatility as of subsequent valuation dates was implied from the Company’s own public warrant pricing. A Monte Carlo simulation methodology was used in estimating the fair value

~~ALTIMAR ACQUISITION CORP. II~~

N~~OTES~~TO C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

M~~ARCH~~ ~~31, 2021~~

~~(Unaudited)~~

~~of the Public Warrants~~ for ~~periods where no observable traded price was available, using the same expected volatility as was used in measuring the fair value of~~ the Private ~~Warrants. For periods subsequent~~Placement warrants, a key input into the valuation, was estimated to be 25% based on a calibration to the ~~detachment of the Public Warrants from the Units, the closing~~publicly traded per share price of the ~~Public Warrants~~Company's Class A common stock as of December 31, 2021 (Successor). Other key inputs into the valuation include a term of 5.0 years, a strike price of $11.50 per share, and an assumption that the Private Placement warrants will beremain outstanding until maturity since the Private Placement warrants are not redeemable.

In instances whereby inputs used ~~as the~~to measure fair value asfall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Company’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each ~~relevant date.~~asset or liability.

Note 17. Income Taxes

~~There were no transfers between Levels 1, 2~~

The Company calculates the provision for income taxes during interim periods by applying an estimate of the forecasted annual effective tax rate for the full fiscal year to "ordinary" income or ~~3 during~~loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. The provision for income taxes was $454 for the three months ending March 31, 2022 compared to $9 for the three months ended March 31, 2021. The effective tax rate, including discrete items, was 2.48% for the period ended March 31, 2022 compared to (1.91%) for the three months ended March 31, 2021. The change in the effective tax rate relates primarily to the change in organizational structure stemming from the Business Combination in December 2021. In addition, the tax provision for the period ended March 31, 2022 is impacted by permanent differences with respect to gains and losses recorded on the Fathom Earnout Shares liability, Sponsor Earnout Shares liability, and Warrant liability, none of which were outstanding liabilities as of March 31, 2021.

The Company evaluates the realizability of the deferred tax assets on a quarterly basis and establishes a valuation allowance when it is more likely than not that all or a portion of a deferred tax asset may not be realized. For the three months ended March 31, 2022, the Company made no material adjustments to its assertion that deferred tax assets are not more-likely than not to be realized.

As of March 31, 2022, the Company did 0t recognize income tax expense or benefits associated with uncertain tax positions.

Note 18. Commitments and Contingencies

The Company is subject to various claims and lawsuits that arise in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material effect on the Company’s financial condition, comprehensive gain (loss) or cash flows.

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

Note 19. Variable Interest Entities

Based upon the criteria set forth in ASC 810, the Company consolidates variable interest entities (“VIEs”) in which it has a controlling financial interest and is therefore deemed the primary beneficiary. A controlling financial interest will have both of the following ~~table provides quantitative information regarding Level 3 fair value measurements:~~characteristics: (a) the power to direct the VIE activities that most significantly impact economic performance; and (b) the obligation to absorb the VIE losses and the right to receive benefits that are significant to the VIE. The Company has determined that Fathom OpCo meets the definition of a VIE and that the Company is the primary beneficiary of Fathom OpCo beginning on the date of the Business Combination, and therefore the Company must consolidate Fathom OpCo from the date of the Business Combination.

   As of
February 9,
2021
(Initial
Measurement) As of
March 31,
2021
Stock price
   $ 9.40 $ 9.67
Strike price
   $ 11.50 $ 11.50
Term (in years)
   5.0 5.0
Volatility
   40.0 % 40.0 %
Risk-free rate
   0.72 % 1.24 %
Dividend yield
   0.0 % 0.0 %

The following table presents a summary of the ~~changes in~~total assets, liabilities, and shareholders' equity of the ~~fair value~~Company’s consolidated VIE, which is comprised solely of ~~Level 3 warrant liabilities:~~Fathom OpCo.

   Private    Public    Warrant
Liabilities
Fair value as of January 1, 2021
   $ —      $ —      $ —
Initial measurement on February 9, 2021
   17,144,332    12,933,516    30,077,848
Change in valuation inputs or other assumptions
   3,428,410    2,396,796    5,825,206






Fair value as of March 31, 2021
   20,572,742    15,330,312    35,903,054


	Period Ended March 31, 2022 Fathom OpCo Standalone
Total assets	$	1,569,797
Total liabilities		204,255
Total shareholders' equity		1,365,542

~~NOTE 11. SUBSEQUENT EVENTS~~

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.22

~~Item~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

~~References to the “~~~~Company~~~~,” “~~~~Altimar Acquisition Corp. II~~~~,” “~~~~our~~~~,” “~~us~~” or “~~we~~” refer to Altimar Acquisition Corp. II, references to “~~~~management~~~~” or “~~~~management team~~~~” refer to the Company’s officers and directors and references to the “~~~~Sponsor~~~~” refer to Altimar Sponsor II, LLC.~~ The following discussion and analysis of ~~the Company’s~~our financial condition and results of operations should be read in conjunction with ~~the~~our unaudited ~~condensed~~interim consolidated financial statements as of and for the ~~notes thereto contained elsewhere in this Quarterly Report on Form~~ ~~10-Q~~ ~~(this “~~~~Quarterly Report~~~~”). Certain information contained in the discussion and analysis~~three months ended March 31, 2022 (Successor), together with our audited consolidated financial statements for our most recently completed fiscal year set forth ~~below includes~~under Item 8 of our 2021 Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties.

~~Cautionary Note Regarding Forward-Looking Statements~~

~~This Quarterly Report includes, and oral statements made~~ Our actual results could differ materially from time to time by representatives of the Company may include, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor created thereby. The Company has based these forward-looking statements on management’s current expectations, projections and forecasts about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about the Company that may cause its actual business, financial condition, results of operations, performance and/or achievements to be materially different from any future business, financial condition, results of operations, performance and/or achievements expressed or implied by these forward-looking statements.those discussed below. Factors that ~~might~~could cause or contribute to such ~~a discrepancy~~differences include, but are not limited to, those ~~described~~identified below and those discussed in ~~the Company’s~~Item 1A “Risk Factors” of our 2021 Form 10-K and other filings under the Exchange Act.

Overview

Fathom Digital Manufacturing Corporation was incorporated in Delaware in December 2021 as part of the completion of the business combination of Altimar Acquisition Corp II and Fathom Opco ("the Business Combination"). However, our roots stretch back over 35 years with the ~~SEC.~~founding of several of our subsidiaries. The ~~words “anticipate,~~terms “Fathom” the “Company,” ~~“believe,~~“we,” ~~“continue,~~“us,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “target,” “goal,” “shall,” “should,” “will,” “would” and ~~similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. In addition, any statements that~~“our” as used herein refer to ~~expectations, projections, forecasts or other characterizations~~the business and operations of ~~future events or circumstances, including any underlying assumptions, are forward-looking statements.~~Fathom Digital Manufacturing Corporation and its consolidated subsidiaries.

~~Overview~~

We are a ~~blank check company incorporated~~leading national on-demand digital manufacturing platform at the forefront of the Industry 4.0 revolution. Industry 4.0 utilizes e-commerce, automation, and data sharing in a cyber-physical system to communicate and cooperate in the ~~Cayman Islands~~manufacturing process over the Internet of Things ("IoT"). Using our expansive manufacturing footprint and extensive expertise in both additive and traditional manufacturing, we provide comprehensive product development and on-demand manufacturing services to many of the largest and most innovative companies in the world. Our unified suite of manufacturing technologies, processes, and proprietary software enables us to deliver hybridized solutions that meet the specific needs of our customers, empowering them to tackle complex manufacturing problems and accelerate product development cycles.

Our differentiated strategy focuses on speed, problem solving, adaptive technical responsiveness, and a technology agnostic approach across our 25 plus manufacturing processes to meet customers’ design intent. This allows our customers to iterate faster, often shortening their product development and production cycles from months to days.

We seamlessly blend in-house capabilities consisting of plastic and metal additive technologies, injection molding and tooling, computer numerical control (“CNC”) machining, and precision sheet metal fabrication. We operate over 530 advanced manufacturing systems across 25 unique manufacturing processes and a 450,000 sq. ft. manufacturing footprint, spanning 12 facilities located primarily within the U.S. We believe we are positioned to serve the largest geographic markets in which our customers are located and enable cost effective and rapid turnaround times for our customers. Our scale and the breadth of offerings allow our customers to consolidate their supply chain and product development needs through the ability to source through a single manufacturing supplier. Fathom’s manufacturing technologies and capacity are further extended through the utilization of a selected group of highly qualified suppliers that specialize in injection molding and tooling and CNC machining.

We have experienced significant growth since inception both organically and through our successful and proven acquisition playbook, which is enabled by our proprietary software platform that allows for a streamlined integration of acquired companies. Over the past three years, we have successfully completed 13 acquisitions to bolster our operations and offerings. Fathom started as Midwest Composite Technologies, LLC ("MCT"), a leader in prototyping and low-volume services. Founded in 1984, MCT specialized in model making, industrial design, and rapid prototyping. Today, MCT serves companies through a variety of in-house additive manufacturing technologies, including 3D printing and processing, CNC machining, injection molding, and industrial design capabilities.

In September 2019, we acquired Kemeera, LLC to expand our additive, CNC machining, injection molding, and development and engineering services, as well as bring urethane casting capabilities. In December 7,2019, we acquired ICOMold, LLC ("ICOMold") to expand our injection molding capabilities and significantly enhance our customer experience by bringing in-house an interactive, automated quotation system capable of providing feedback in 30 seconds with an intuitive, customer-facing project management portal, which we have continued to develop and enhance. Our acquisition of ICOMold also expanded our capabilities into China.

In July 2020, ~~formed~~we acquired Incodema, LLC and Newchem, LLC to expand our in-house manufacturing processes to include precision sheet metal engineering solutions, including a broad array of sheet metal cutting and forming solutions such as laser cutting, micro waterjet, specialty stamping, and photochemical etching, among others, for quick and complex, tight tolerance parts. In August 2020, we acquired GPI Prototype & Manufacturing Services, LLC ("GPI") to expand our additive manufacturing capabilities. GPI was one of the first metal additive manufacturing service providers in the U.S., bringing metallurgical expertise in-house and enabling the Company to produce metal parts with complex geometries for on-demand manufacturing applications. In December 2020, we acquired Dahlquist Machine, LLC to expand our precision machining capabilities with state-of-the-art CNC mills and lathes for high-speed precision machining of light metals, aluminum, and plastics. In December 2020, we also acquired Majestic Metals, LLC, further expanding our precision sheet metal fabrication capabilities. Further, in December 2020, we acquired Mark Two Engineering, LLC expanding our precision machining services and footprint in the medical device industry.

In February 2021, we acquired Summit Tooling, Inc. and Summit Plastics LLC, further expanding our plastic injection mold manufacturing capabilities. In April 2021, we acquired Centex Machine and Welding Inc. and Laser Manufacturing, Inc. to expand our high-precision manufacturing services specializing in CNC machining and medical device manufacturing. In April 2021, we also acquired Sureshot Precision, LLC d/b/a Micropulse West expanding our Electrical Discharge Machine (“EDM”) services, and CNC and manual machining capabilities. Further, in April 2021, we acquired Precision Process, LLC specializing in CNC machining, engineering support, and EDM services.

Factors Affecting the Comparability of our Results of Operations

As a result of a number of factors, our historical results of operations are not comparable from period to period and may not be comparable to our financial results of operations in future periods. Set forth below is a brief discussion of the key factors that may impact the comparability of our results of operations in future periods.

Impact of the Business Combination

Fathom is subject to corporate level tax rates at the federal, state and local levels. Fathom OpCo was and is treated as a flow-through entity for U.S. federal income tax purposes, and as such, has generally not been subject to U.S. federal income tax at the entity level. Accordingly, other than for certain consolidated subsidiaries of the Predecessor that are structured as corporations and unless otherwise specified, the historical results of operations and other financial information presented does not include any provision for U.S. federal income tax.

Fathom pays U.S. federal and state income taxes as a corporation on its share of our taxable income. The Business Combination was accounted for as a business combination using the acquisition method of accounting. Accordingly, the assets and liabilities, including any identified intangible assets, were recorded at their preliminary fair values at the date of completion of the Business Combination, with any excess of the purchase price over the preliminary fair value recorded as goodwill. The application of business combination accounting required the use of significant estimates and assumptions.

As a result of the application of accounting for the ~~purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. We intend to effectuate our~~ Business Combination, ~~using cash derived from~~ the ~~proceeds~~historical consolidated financial statements of Fathom OpCo are not necessarily indicative of the ~~Initial Public Offering~~Fathom's future results of operations, financial position and cash flows. For example, increased tangible and intangible assets resulting from adjusting the ~~sale~~basis of tangible and intangible assets to their fair value would result in increased depreciation and amortization expense in the periods following the consummation of the ~~Private Placement Warrants, our shares, debt or a combination of cash, shares and debt.~~

~~We expect to continue to incur significant costs in the pursuit of a~~ Business Combination. ~~We cannot assure you that our plans to complete a~~

In connection with the Business Combination, ~~will be successful.~~

~~Results~~we entered into a Tax Receivable Agreement (“TRA”) with certain of ~~Operations~~

We have neither engaged in any operations nor generated any revenues through March 31, 2021. All activity from December 7, 2020 (inception) through March 31, 2021 were organizational activities, those necessary to prepareour pre-Business Combination owners that provides for the ~~Initial Public Offering as described below and, subsequent~~payment by Fathom to ~~the closing~~such owners of 85% of the ~~Initial Public Offering, identifying a target company for a Business Combination. We do not expect~~benefits that Fathom is deemed 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~~realize as a result of ~~being~~the Company’s share of existing tax basis acquired in the Business Combination and other tax benefits related to entering into the TRA.

Additionally, in connection with the Business Combination, we have accounted for the issuance of warrants and earnout shares as liabilities which require re-measurement to fair value at the end of each reporting period, as applicable, and adopted the Fathom 2021 Omnibus Incentive Plan which will result in higher share-based compensation expenses.

Impact of Becoming a Public Company

We expect to incur additional costs associated with operating as a public company, ~~(for~~including human resources, legal, consulting, regulatory, insurance, accounting, investor relations and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act and rules adopted by the SEC require public companies to implement specified corporate governance practices that are not applicable to a private company. These additional rules and regulations increased our legal, regulatory and financial ~~reporting,~~compliance costs and will make some activities more time-consuming and costly.

Key Factors Affecting Our Results

Our financial position and results of operations depend to a significant extent on the following factors:

Industry Opportunity and Competitive Landscape

The market in which we operate is projected to grow from $25 billion in 2021 to $33 billion in 2025, fueled by growth in demand for additive manufacturing and continuing trends in customer outsourcing of production needs. We operate in a large, fragmented, and competitive industry, competing for customers with a range of digital manufacturers, digital manufacturing brokers, and regional design bureaus. We believe we are uniquely positioned as the only full-service outsourced solution built specifically to cater to the manufacturing needs of enterprise-level corporate customers. In particular, we believe we compare favorably to other industry participants on the basis of the following competitive factors:


	•		Fathom offers a wide breadth of advanced manufacturing processes, including additive 2.0 and emerging technologies;


	•		We have a proven track record of serving blue-chip, enterprise-level corporate customers;


	•		We offer our clients turnaround times in as little as 24-hours, nationwide;


	•		Our unified digital customer experience supplemented by with embedded support teams;


	•		Fathom provides the industry’s only team of dedicated customer-facing engineers, unlocking the broadest parts envelope and providing customers with high-value customized parts;


	•		Our list of certifications validates our capabilities and precision (tight tolerances, handling of sensitive client data, etc.);


	•		We possess a wealth of material expertise, technical design capabilities, and engineering resources which we leverage to deliver superior customer results regardless of manufacturing process and production material; and


	•		Our successful and proven acquisition integration playbook for strategic growth opportunities.

Customer Product Life Cycle and Connectivity

We believe that a number of trends affecting our industry have affected our results of operations and may continue to do so. For example, we believe that many of our target customers are facing three mega trends which are disrupting long-term product growth models including (i) increased pressure to shorten product life-cycles, (ii) the demand for manufactured parts on-demand, and (iii) expectation to deliver products that are personalized and customized to unique customer specifications. We believe we continue to be well positioned to benefit from these trends given our proprietary technology alignment with Industry 4.0 trends that enables us to automate and integrate processes involved in manufacturing custom parts. The COVID-19 pandemic has also impacted the manufacturing environment. For example, the pandemic accelerated the digitization of manufacturing as companies pivoted to a work-from-home and socially-distanced manufacturing plant environment. As a result, the adoption of e-commerce was accelerated, which allows opportunity for us to provide valuable solutions to manufacturers looking to build resiliency in their supply chains through fast, on-demand manufacturers. While our business may be positively affected by these trends, our results may also be favorably or unfavorably impacted by other trends that affect product developer and engineer orders for custom parts in low volumes, including, among others, economic conditions, changes in product developer and engineer preferences or needs, developments in our industry and among our competitors, and developments in our customers’ industries. For a more complete discussion of the risks facing our business, see Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2021.

Manufacturing Facilities and Capacity

We believe our combined facilities are adequate for our development and production needs in the near future. Should we need to add space or transition into new facilities, we believe we have the ability to expand our footprint on commercially reasonable terms.

Impacts of the COVID-19 pandemic

On March 11, 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a new coronavirus as a “pandemic.” First identified in late 2019 and now known as COVID-19, the outbreak has impacted millions of individuals worldwide. As of the date of issuance of the consolidated financial statements contained in this report, our operations have not been significantly impacted, but we continue to monitor the situation. No impairments were recorded as of the consolidated balance sheet date, as no triggering events or changes in circumstances had occurred during 2021 or during the fiscal quarter ended March 31, 2022; however, due to uncertainty surrounding the situation, and specifically as it pertains to the current global supply chain disruptions, and management’s judgment could change in the future. In addition, while our results of operations, cash flows and financial condition were not significantly impacted, the extent of any future impact of COVID-19 cannot be reasonably estimated at this time. The health and well-being of our employees is critical to our ongoing ability to operate and serve our customers. We are committed to ensuring the safety and well-being of our employees across each location and job function, which includes providing broad benefits to support their health and wellness needs. In order to address the challenges posed by COVID-19, we implemented a number of measures across our locations to ensure maximum protection for our employees and their families, including allowing remote work arrangements where possible. We continue to place the utmost importance on complying with governmental regulations and health authority guidance to ensure that the appropriate steps are taken to protect the well-being of all people engaged with our business.

Comparison of the three months ended March 31, 2022 and 2021


	Three Months Ended
	March 31, 2022 (Successor)			March 31, 2021 (Predecessor)

Revenue	$	40,541		$	30,534
Cost of revenue		28,544			17,123
Gross profit		11,997			13,411
Operating expenses
Selling, general, and administrative		14,763			7,670
Depreciation and amortization		4,517			2,672
Total operating expenses		19,280			10,342
Operating (loss) income		(7,283	)		3,069
Interest expense and other (income) expense
Interest expense		1,473			2,114
Other expense		116			1,480
Other income		(27,165	)		(34	)
Total interest expense and other (income) expense, net		(25,576	)		3,560
Net income (loss) before income tax	$	18,293		$	(491	)
Income tax benefit		454			9
Net income (loss)	$	17,839		$	(500	)
Net loss attributable to Fathom OpCo non-controlling interest (Note 13)		(5,259	)		-
Net income attributable to controlling interest		23,098			(500	)
Comprehensive income (loss):
Loss from foreign currency translation adjustments		(107	)		(107	)
Comprehensive income (loss), net of tax	$	22,991		$	(607	)

Revenue

Revenue for the three months ended March 31, 2022 was $40.5 million compared to $30.5 million in the three months ended March 31, 2021, an increase of 32.8%. The year-over-year growth was driven by an increase in the volume of customers served, primarily through acquisition-related activity, and growth within Fathom’s strategic accounts.

Gross Profit

Gross profit for the three months ended March 31, 2022 totaled $12.0 million, or 29.6% of revenue, compared to $13.4 million, or 43.9% of revenue, for the three months ended March 31, 2021. The decrease in gross profit is primarily driven by a $3.2 million amortization expense related to inventory step-up adjustments from purchase accounting following the completion of the Business Combination on December 23, 2021.

Operating Expenses

Selling, general and ~~auditing compliance)~~administrative (SG&A) expenses were $14.8 million and $7.7 million for the three months ended March 31, 2022 and March 31, 2021, respectively. The $7.1 million, or 92.5%, increase in SG&A expenses were primarily driven by additional costs related to the Business Combination and going public.

Depreciation and amortization expenses were $4.5 million and $2.7 million for the three months ended March 31, 2022 and March 31, 2021, respectively. The increase of $1.9 million, or 59.7%, was primarily driven by an increase in intangible assets related to the Business Combination resulting in amortization expenses associated with those assets.

Operating Income (Loss)

Operating loss was $7.3 million for the three months ended March 31, 2022 and operating income was $3.1 million for the three months ended March 31, 2021. The operating loss was primarily driven by additional costs related to the Business Combination and going public, including non-cash amortization of inventory step-up from purchase accounting, professional fees and additional employees.

Interest Expense and Other Expense (Income)

Interest expense was $1.5 million and $2.1 million for the three months ended March 31, 2022 and March 31, 2021, respectively. The decrease in interest expense is primarily due to lower debt at March 31, 2022 as ~~well~~compared to March 31, 2021 and lower interest rates during the three months ended March 31, 2022 as compared to the same period in 2021.

Other expenses were $0.1 million and $1.4 million for the three months ended March 31, 2022 and March 31, 2021, respectively. The decrease in other expenses of $1.3 million is due ~~diligence expenses.~~to non-recurring expenses related to the Summit acquisition that took place in the period ending March 31, 2021.

Other income was $27.2 million and $0.0 million for the three months ended March 31, 2022 and March 31, 2021, respectively. The increase in other income of $27.2 million represents the changes in fair value in the Earnout Share liabilities and the Warrant liability during the three months ended March 31, 2022 of $19.0 million and $8.1 million, respectively.

Income Taxes

We recorded a tax expense of $0.5 million and $0.0 million for the three months ended March 31, 2022 and March 31, 2021, respectively. For the three months ended March 31, 2022 the tax expenses were impacted by permanent difference with respect to gains and losses recorded on the earn-out share liability, sponsor share liability and warrant liabilities. During the 2021 predecessor period, certain subsidiaries of Fathom OpCo which were previously held as corporations for U.S. federal tax purposes, were reorganized into flow-through entities in non-taxable transactions. As a result, deferred tax liabilities pertaining to the corporate subsidiaries were reversed as income tax benefits during the 2021 predecessor period.

Non-GAAP Information

This Quarterly Report on Form 10-Q includes Adjusted Net Income (Loss) and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA"), which are non-GAAP financial measures that we ~~had~~use to supplement our results presented in accordance with U.S. GAAP. We believe Adjusted Net Income (Loss) and Adjusted EBITDA are useful in evaluating our operating performance, as they are similar to measures reported by our public competitors and regularly used by securities analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted Net Income (Loss) and Adjusted EBITDA are not intended to be a substitute for any U.S. GAAP financial measure and, as calculated by us, may not be comparable to other similarly titled measures of performance of other companies within our industry or in other industries. These non-GAAP financial measures supplement and should be considered in addition to and not in lieu of our, U.S. GAAP results.

We include these non-GAAP financial measures because they are used by management to evaluate Fathom’s core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. Adjusted EBITDA excludes certain expenses that are required in accordance with U.S. GAAP because they are non-recurring (for example, in the case of transaction-related costs), non-cash (for example, in the case of depreciation and amortization) or are not related to our underlying business performance (for example, in the case of interest income and expense).

Adjusted Net Income (Loss)

We define and calculate Adjusted Net Income (Loss) as net loss before the impact of ~~$15,725,653, which consists of operating costs of $1,902,139, transaction costs allocated to the Warrants of $755,071 and a change~~any increase or decrease in the estimated fair value of ~~warrant~~the Company’s warrants and earnout shares as well as transaction-related costs and certain other non-cash and non-core items.

The table below presents our Adjusted Net Income (Loss) reconciled to our net income (loss), the most directly comparable U.S. GAAP measure, for the periods indicated:


	March 31, 2022 (Successor)			March 31, 2021 (Predecessor)
Net income (loss)	$	17,839		$	(500	)
Acquisition expenses(1)		-			1,169
Stock compensation		2,128			-
Inventory step-up amortization		3,241			277
Change in fair value of warrant liability(2)		(8,100	)		-
Change in fair value of Earnout Share liabilities(2)		(18,970	)		-
Integration, non-recurring, non-operating, cash, and non-cash costs(3)		1,878			1,114
Adjusted Net Income (Loss)	$	(1,984	)	$	2,060

(1) Represents expenses incurred related to business acquisitions;

(2) Represents the income statement impacts from the change in fair value related to both the Sponsor Earnout Share liability, the Fathom Earnout Share liability, and the Warrant liability associated with the Business Combination;

(3) Represents adjustments for other integration, non-recurring, non-operating, cash, and non-cash costs related primarily to integration costs for new acquisitions, severance, and management fees paid to our principal owner.

Adjusted EBITDA

We define and calculate Adjusted EBITDA as net income (loss) before the impact of ~~$13,069,538, offset by~~ interest income ~~on marketable securities held~~or expense, income tax expense and depreciation and amortization, and further adjusted for the following items: transaction-related costs, the impact of any increase or decrease in the ~~Trust Account~~estimated fair value of ~~$1,095.~~the Company's warrants and earnout shares, and certain other non-cash and non-core items, as described in the reconciliation included below.

1927

The table below presents our Adjusted EBITDA reconciled to net income (loss), the most directly comparable U.S. GAAP measure, for the periods indicated.



	3/31/2022 (Successor)			3/31/2021 (Predecessor)
Net income (loss)	$	17,839		$	(500	)
Depreciation and amortization		6,208			3,526
Interest expense, net		1,500			2,114
Income tax expense		454			9
Acquisition expenses(1)		-			1,169
Inventory step-up amortization		3,241			277
Stock compensation		2,128			-
Change in fair value of warrant liability(2)		(8,100	)		-
Change in fair value of Earnout Share liabilities(2)		(18,970	)		-
Integration, non-recurring, non-operating, cash, and non-cash costs(3)		1,878			1,114
Adjusted EBITDA	$	6,178		$	7,709

(1) Represents expenses incurred related to business acquisitions;

(2) Represents the impacts from the change in fair value related to both the earnout share liabilities and the warrant liabilities associated with the Business Combination;

Liquidity and Capital Resources

We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital and capital expenditure needs, contractual obligations and other commitments, with cash flows from operations and other sources of funding. Our current working capital needs relate mainly to our growth strategies, including business combination activity, capital equipment investments, and business development efforts, as well as compensation and benefits of our employees. In addition, under our New Credit Agreement, the Company is subject to various financial covenants, including quarterly net leverage and interest coverage covenants. As of March 31, 2022, the Company was in compliance with all covenant requirements. Our ability to expand and grow our business will depend on many factors, including our working capital needs and the evolution of our operating cash flows.

We had $12.0 million in cash as of March 31, 2022. We believe our operating cash flows, together with amounts available under the New Credit Agreement and our cash on hand will be sufficient to meet our anticipated working capital and capital expenditure requirements during the next 12 months.

We may, however, need additional cash resources due to changed business conditions or other developments, including unanticipated regulatory developments, significant acquisitions and competitive pressures. We expect our capital expenditures and working capital requirements to continue to increase in the immediate future, as we seek to expand our product offerings across more of the U.S. Our capital expenditures in 2021 of $9.0 million equaled approximately 6.0% of annual revenue We believe that our annual future growth capital expenditures, excluding any expenditures for buildings and maintenance capital we might purchase for our operations, are likely to be approximately 6.0% of annual revenue. To the extent that our current resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing. If the needed financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to decrease our level of investment in new product launches and related marketing initiatives or to scale back our existing operations, which could have an adverse impact on our business and financial prospects. See Note 3—Business Combination with Fathom OpCo in the accompanying notes to our unaudited consolidated financial statements for further information.

Borrowings and Lines of Credit

On ~~February 9,~~December 23, 2021, ~~we consummated~~ the ~~Initial Public Offering~~Company entered into the New Credit Agreement, which included a $50.0 million revolving credit facility and a $125.0 million term loan. The Company's borrowings under the revolving credit facility were $22.0 million at March 31, 2022. The loans obtained under the New Credit Agreement will mature in December 2026.

The Company recorded deferred financing costs of ~~34,500,000 Units at $10.00 per Unit, generating gross proceeds of $345,000,000 as described~~$1.8 million in ~~Note 3 to the condensed financial statements. Simultaneously~~conjunction with the ~~closing~~New Credit Agreement and the balance is presented within Long-Term debt, net on the Company's Consolidated Balance Sheet. The Company amortizes the deferred financing costs using the effective interest method.

The revolving credit facility under the New Credit Agreement is available for working capital and other general corporate purposes and includes a letter of credit sub-facility of up to $5.0 million. The New Credit Agreement also includes an uncommitted incremental facility, which, subject to certain conditions, provides for additional term loan facilities, an increase in commitments under the New Credit Agreement and/or an increase in commitments under the revolving credit facility, in an aggregate amount of up to $100 million.

Tax Receivable Agreement

In connection with the Business Combination, we entered into the TRA with certain of our pre-Business Combination owners that provides for the payment by Fathom to such owners of 85% of the ~~Initial Public Offering, we consummated the sale of 9,900,000 Private Placement Warrants at~~benefits that Fathom is deemed to realize as a ~~price of $1.00 per Private Placement Warrant in a private placement transaction to the Sponsor, generating gross proceeds of $9,900,000 as described in Note 4 to the condensed financial statements.~~

~~Following the Initial Public Offering, the full exercise~~result of the ~~over-allotment option~~Company’s share of existing tax basis acquired in the Business Combination and other tax benefits related to entering into the TRA.

Actual tax benefits realized by Fathom may differ from tax benefits calculated under the TRA as a result of the use of certain assumptions in the TRA, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. While the amount of existing tax basis, the anticipated tax basis adjustments and the ~~sale~~actual amount and utilization of tax attributes, as well as the ~~Private Placement Warrants,~~amount and timing of any payments under the TRA, will vary depending upon a ~~total~~number of ~~$345,000,000~~factors, we expect that the payments that Fathom may make under the TRA will be substantial. As of March 31, 2022, we do not expect to make any material payments within the next two years, and anticipate payments to become more material beginning in 2024.

Cash Flow Analysis


	Period ended
(dollars in thousands)	March 31, 2022 (Successor)			March 31, 2021 (Predecessor)
Net cash provided by (used in) :
Operating Activities	$	840		$	2,130
Investing Activities		(3,346	)		(12,183	)
Financing Activities		(5,858	)		11,273
Net Change in Cash and Cash Equivalents	$	(8,364	)	$	1,220

Operating Activities

Net cash provided from operating activities was ~~placed~~$0.8 million and $2.1 million for the three months ended March 31, 2022 and March 31, 2021, respectively. The decrease of $1.3 million is primarily driven by additional depreciation and amortization resulting from the increase in property and equipment and intangible assets from the ~~Trust Account. We incurred $19,490,958~~Business Combination.

Investing Activities

Cash used in ~~costs related to~~investing activities of $3.3 million for the ~~Initial Public Offering, consisting~~three months ended March 31, 2022 represents capital expenditures. Cash used in investing activities of ~~$6,900,000 of underwriting fees, $12,075,000 of deferred underwriting fees and $515,958 of other offering costs.~~

~~For~~$12.2 million for the three months ended March 31, 2021 represents the cash used in ~~operating~~the acquisition of Summit of $10.8 million and capital expenditures of $1.3 million.

Financing Activities

Cash used in financing activities of $5.8 million for the three months ended March 31, 2022 was ~~$1,106,218. Net loss~~due to payments made on the term loan and the revolving credit facility. Cash provided by financing activities of ~~$15,725,653 was affected by a change in fair value of warrant liability of $13,069,538, transaction costs allocated to~~$11.3 million for the ~~Warrants of $755,071 and interest earned on marketable securities held in the Trust Account of $1,095. Changes in operating assets and liabilities provided $795,921 of cash for operating activities.~~

~~As of~~three months ended March 31, 2021 ~~we had marketable securities held in~~was primarily due to debt proceeds of $11.5 million for the ~~Trust Account~~Summit acquisition.

Critical Accounting Policies and Use of $345,001,095 (including approximately $1,000 of interest income) consisting of U.S. Treasury Bills with a maturity of 185 days or less. We may withdraw interest from the Trust Account to pay taxes, if any. 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 share capital 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. Estimates

As of March 31, 2021, we had cash of $1,651,431 held outside of the Trust Account. 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 an affiliate of the Sponsor, or certain of the Company’s executive officers and directors may, but are not obligated to, loan the Company funds as may be required. If we complete a Business Combination, we would repay such Working Capital Loans. 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 Working Capital Loans but no proceeds from the Trust Account would be used for such repayment. Up to $2,000,000 of such Working Capital Loans may be convertible into warrants at a price of $1.00 per warrant, at the option of the lender. The warrants would be identical to the Private Placement Warrant.

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 the Public Shares upon consummationPreparation 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 had no obligations, assets or liabilities, which would be considered~~ ~~off-balance~~ sheet arrangements as of March 31, 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 the Sponsor a sum of $10,000 per month for office space and secretarial and administrative services. We began incurring these fees on February 4, 2021 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.

~~Critical Accounting Policies~~

~~The preparation of condensed~~ financial statements ~~and related disclosures in conformity with GAAP~~ requires ~~the Company’s~~ management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. See Note 2—Significant Accounting Policies in the notes to our audited consolidated financial statements in the Company's 2021 Form 10-K describes the significant accounting policies used in preparation of the unaudited consolidated financial statements. We believe that the most complex and sensitive judgments, because of their potential significance to the unaudited consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain and are described subsequently. Actual results could differ from management’s estimates.

Business Combinations

We account for business acquisitions in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations ("ASC 805"). We measure the cost of an acquisition as the aggregate of the acquisition date fair values of the assets transferred and liabilities ~~disclosure~~assumed and equity instruments issued. Transaction costs directly attributable to the acquisition are expensed as incurred. We record goodwill for the excess of ~~contingent~~(i) the total costs of acquisition, fair value of any non-controlling interests and acquisition date fair value of any previously held equity interest in the acquired business over (ii) the fair value of the identifiable net assets of the acquired business.

The acquisition method of accounting requires us to exercise judgment and make estimates and assumptions based on available information regarding the fair values of the elements of a business combination as of the date of acquisition, including the fair values of identifiable intangible assets, deferred tax asset valuation allowances, liabilities related to uncertain tax positions and contingencies. We must also refine these estimates over a one-year measurement period, to reflect any new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. If we are required to retroactively adjust provisional amounts that we have recorded for the fair value of assets and liabilities in connection with an acquisition, these adjustments could materially impact our results of operations and financial position. Estimates and assumptions that we must make in estimating the fair value of future acquired technology, user lists and other identifiable intangible assets include future cash flows that we expect to generate from the acquired assets. If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, we could record impairment charges. In addition, we have estimated the economic lives of certain acquired assets and these lives are used to calculate depreciation and amortization expense. If our estimates of the economic lives change, depreciation or amortization expenses could be accelerated or slowed, which could materially impact our results of operations.

Goodwill and Intangible Assets

We recognize goodwill in accordance with ASC 350, Intangibles—Goodwill and Other ("ASC 350"). Goodwill is the excess of cost of an acquired entity over the fair value amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is not amortized. Goodwill is tested for impairment annually in the fourth quarter of each year, and is tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment charge for goodwill is recognized only when the estimated fair value of a reporting unit, including goodwill, is less than its carrying amount. As of March 31, 2022 and March 31, 2021, no impairment charges for goodwill have been recognized.

We recognize intangibles assets in accordance with ASC 350. Acquired intangible assets subject to amortization are stated at cost and are amortized using the straight-line method over the estimated useful lives of the assets. Intangible assets that are subject to amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Assets not subject to amortization are tested for impairment at least annually. As of March 31, 2022 and March 31, 2021, no impairment charges for intangible assets have been recognized.

The estimates of fair value are based on the best information available as of the date of the assessment, which primarily incorporates management assumptions about expected future cash flows. Although these assets are not currently impaired, there can be no assurance that future impairments will not occur. See Note 2—Business Combination with Fathom OpCo, and Note 5—Goodwill and Intangible Assets in the accompanying notes to the unaudited consolidated financial statements for more information.

Revenue Recognition from Contracts with Customers

Most of the Company’s revenue has one performance obligation and ~~income~~is recognized on a point-in-time basis upon shipment. The majority of the Company’s injection molding contracts have multiple performance obligations including one obligation to produce the mold and ~~expenses during~~sample part and a second obligation to produce production parts. For injection molding contracts with multiple performance obligations, the ~~periods reported. Actual results could materially differ from those estimates. We have identified the critical accounting policies set forth below.~~

~~Warrant Liability~~

~~We account for the Warrants as either equity-classified or liability-classified instruments~~Company allocates revenue to each performance obligation based on ~~an assessment~~its relative standalone selling price and recognizes revenue for each performance obligation on a point-in-time basis upon shipment. We generally determine standalone selling price based on the price charged to customers. The Company’s payments terms are consistent with industry standards and never exceed 12 months.

Contingent Liabilities

Our contingent liabilities, which are included within the “Other non-current liabilities” caption on our consolidated balance sheets, are uncertain by nature and their estimation requires significant management judgment as to the probability and estimation of the ~~Warrants’ specific terms~~amount of liability. These contingencies include, but may not be limited to, warrants, TRA liabilities, earnout shares, litigation, and ~~applicable authoritative guidance~~ management’s evaluation of complex laws and regulations, including those relating to indirect taxes, and the extent to which they may apply to our business and industry. See Note 13—Fair Value Measurement and Note 14—Commitments and Contingencies in the ~~FASB ASC Topic 480, “~~~~Distinguishing Liabilities from Equity~~~~,” and ASC Topic 815, “~~~~Derivatives and Hedging~~~~.” The assessment considers~~accompanying notes to our unaudited consolidated financial statements for more information.

We regularly review our contingencies to determine whether the ~~Warrants are freestanding financial instruments pursuant to ASC Topic 480, whether Warrants meet the definition~~likelihood of a liability ~~pursuant~~is probable and to ~~ASC Topic 480 and~~assess whether ~~the Warrants meet all~~a reasonable estimate of the ~~requirements for equity classification under ASC Topic 815, including~~liability can be made. Determination of whether a liability estimate can be made is a complex undertaking that considers the ~~Warrants are indexed to~~judgement of management, third-party research, the ~~Class A Ordinary Shares,~~prospect of negotiation and interpretations by regulators and courts, among other ~~conditions~~information. When liabilities can be reasonably estimated, an estimated contingent liability is recorded. We continually reevaluate our indirect tax and other positions for ~~equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of issuance~~appropriateness.

Earnout Shares Liabilities and Warrant Liability

The fair values of the Sponsor earnout shares liability, Fathom earnout shares liability, and Warrants ~~and as of each subsequent quarterly period end date while the Warrants are outstanding.~~

~~For issued or modified Warrants~~liability were determined using Monte Carlo simulations that ~~meet all of the criteria for equity classification, the Warrants are required to be recorded as~~have various significant unobservable inputs. The assumptions used could have a ~~component of additional~~ ~~paid-in~~ ~~capital at the time of issuance. For issued or modified Warrants that do not meet all the criteria for equity classification, the Warrants are required to be recorded at their initial fair value~~material impact on the ~~date~~valuation of ~~issuance~~these liabilities, and ~~each balance sheet date thereafter.~~include our best estimate of expected volatility, expected holding periods and appropriate discounts for lack of marketability. Changes in the estimated fair ~~value~~values of these liabilities may have material impacts on our results of operations in any given period, as any increases in these liabilities have a corresponding negative impact on our U.S. GAAP results of operations in the ~~warrants are recognized as a~~ ~~non-cash~~ ~~gain or loss~~period in which the changes occur. See Note 2 - Business Combination with Fathom OpCo and Note 6 - Warrant Liabilityin the accompanying notes to our unaudited consolidated financial statements for more information.

Impact of Changes in Accounting on Recent and Future Trends

In February 2016, the ~~statements of operations. The fair value of the Warrants was estimated using a Monte Carlo simulation approach.~~

~~Class A Ordinary Shares Subject to Possible Redemption~~

~~We account for the Class A Ordinary Shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “~~~~Distinguishing Liabilities from Equity~~.” The Class A Ordinary Shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable Class A Ordinary Shares (including Class A Ordinary Shares that feature 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) are classified as temporary equity. At all other times, Class A Ordinary Shares are classified as shareholders’ equity. The Class A Ordinary Shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, the Class A Ordinary Shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of our condensed balance sheets.

~~Net Income (Loss) Per Ordinary Share~~

~~We apply the~~ ~~two-class~~ method in calculating net income (loss) per ordinary share. Net income per ordinary share, basic and diluted, for redeemable Class A Ordinary Shares is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of redeemable Class A Ordinary Shares outstanding since original issuance. Net loss per share, basic and diluted, for ~~non-redeemable~~ ~~Class B Ordinary Shares is calculated by dividing the net loss, adjusted for income attributable to redeemable Class A Ordinary Shares, by the weighted average number of~~ ~~non-redeemable~~ ~~Class B Ordinary Shares outstanding for the period.~~

~~Recent~~Financial Accounting Standards

~~In August 2020, the FASB~~ Board (“FASB”) issued Accounting Standards Update (“ASU”) No. ~~2020-06, ”Debt—Debt~~2016-02, Leases (Topic 842) Section A - Leases: Amendments to the FASB Accounting Standards Codification. The standard requires lessees to recognize the assets and liabilities arising from leases on the balance sheet and retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. The Company adopted this standard and related amendments in the first quarter of 2022, using the modified retrospective approach.

The modified retrospective approach provides a method for recording existing leases at adoption with ~~Conversion~~a cumulative adjustment to retained earnings. The Company elected the package of practical expedients which permits the Company to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and ~~Other Options (Subtopic~~ ~~470-20)”~~(3) any initial direct costs for any expired or existing leases as of the effective date. The Company also elected the practical expedient lease considerations to not allocate lease considerations between lease and “~~Derivatives~~non-lease components for real estate leases. As such, real estate lease considerations are treated as a single lease-component and ~~Hedging—Contracts~~accounted for accordingly.

The Company applied a portfolio approach to effectively account for the lease liabilities and right-of-use lease assets. The Company excludes leases with an initial term of 12 months or less from the application of Topic 842.

Adoption of the new standard resulted in ~~Entity’s Own Equity (Subtopic~~ ~~815-40):~~the recording of $3,122 and $8,195 of current lease liabilities and long-term lease liabilities, respectively, and $11,986 in corresponding right-of-use lease assets. The difference between the approximate value of the right-of-use lease assets and lease liabilities is attributable to future rent escalations. The cumulative change in the beginning accumulated deficit was $82 due to the adoption of Topic 842. There was no material impact on the Company’s consolidated statement of operations or consolidated statements cash flows. The Company’s comparative periods continue to be presented and disclosed in accordance with legacy guidance in Topic 840.

Emerging Growth Company Accounting ~~for Convertible Instruments and Contracts in an Entity’s Own Equity~~~~,” which simplifies~~Election

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting ~~for convertible instruments by removing major separation models required under current GAAP. ASU~~ ~~2020-06~~ ~~removes certain settlement conditions that~~standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. Altimar II was an emerging growth company as defined in Section 2(a) of the Securities Act of 1933, as amended, and has elected to take advantage of the benefits of this extended transition period. Fathom is expected to remain an emerging growth company at least through the end of the 2022 and is expected to continue to take advantage of the benefits of the extended transition period. This may make it difficult or impossible to compare Fathom financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions for ~~equity contracts to qualify for~~emerging growth companies because of the ~~derivative scope exception and it also simplifies the diluted earnings per share calculation~~potential differences in ~~certain areas. ASU~~ ~~2020-06~~ ~~is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. We adopted ASU~~ ~~2020-06~~ ~~effective as of January 1, 2021. The adoption of ASU~~ ~~2020-06~~ ~~did not have an impact on our financial statements.~~

~~Our management does not believe that any other recently issued, but not yet effective,~~ accounting standards ~~if currently adopted, would have a material effect on our condensed financial statements.~~used.

~~Item~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

~~Not required for smaller reporting companies.~~For quantitative and qualitative disclosures about market risk, see Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" of our 2021 Form 10-K. Our exposures to market risk have not changed materially since December 31, 2021.

Item 4.4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, the Company conducted an evaluation of the effectiveness of the Company’s

We maintain disclosure controls and procedures ~~as of the end of the fiscal quarter ended March 31, 2021, as such term is defined in Rules~~ ~~13a-15(e)~~ ~~and~~ ~~15d-15(e)~~ ~~promulgated under the Exchange Act. Based on this evaluation, the Company’s principal executive officer and principal financial officer have concluded~~ that ~~solely due to the events that led to the Company’s revision of its February 9, 2021 audited balance sheet (the “~~~~Revision~~”) to reclassify the Warrants as derivative liabilities instead of as components of equity as described in Note 2 to the condensed financial statements, a material weakness existed and the Company’s disclosure controls and procedures were not effective.

~~Disclosure controls and procedures~~ are designed to ensure that information required to be disclosed ~~by the Company~~ in ~~its~~our reports filed ~~with the SEC under~~pursuant to the Exchange Act is ~~recorded, processed, summarized~~properly and timely reported ~~within the time periods specified in the SEC’s rules and forms, and that such information is accumulated~~ and communicated to ~~the Company’s~~our management, including ~~the Company’s principal executive officer, principal financial officer or persons performing similar functions,~~our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

~~Changes in Internal Control over Financial Reporting~~

~~There was no change in~~We have evaluated the ~~Company’s internal control over financial reporting that occurred during the fiscal quarter ended~~effectiveness of our disclosure controls and procedures as of March 31, ~~2021 covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect,~~2022 with the ~~Company’s internal control over financial reporting. In light~~participation, and under the supervision, of the material weakness identified and the related Revision described in Note 2 to the condensed financial statements, the Company plans to enhance its processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to its financial statements. The Company’s plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among its personnel and third-party professionals with whom the Company consults regarding complex accounting applications. The elements of its remediation plan can only be accomplished over time, and the Company can offer no assurance that these initiatives will ultimately have the intended effects.

~~PART II—OTHER INFORMATION~~

~~Item 1. Legal Proceedings.~~

~~None.~~

~~Item 1A. Risk Factors.~~

Factors that could cause the Company’s actual business, financial condition and/or results of operations to differ materially from those in this Quarterly Report are any of the risks factors described in the Registration Statement and the additional risk factors set forth below. Any of these risk factors could result in a significant or material adverse effect on the Company’s business, financial condition and/or results of operations. Additional risk factors not presently known to the Company or that the Company currently deems immaterial may also impair the Company’s business, financial condition and/or results of operations.

~~The Warrants are accounted for as liabilities, and the changes in value of the Warrants could have a material effect on our financial condition and results of operations.~~

~~On April 12, 2021, the staff of the SEC (the “~~~~Staff~~~~”) issued a statement entitled “~~~~Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)~~~~.” In light of the Staff’s statement and guidance in ASC~~ ~~815-40,~~ “~~Derivatives and Hedging—Contracts in Entity’s Own Equity~~,” our management, ~~evaluated the terms of the warrant agreement entered into in connection with the Initial Public Offering~~including our Chief Executive Officer and Chief Financial Officer. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, ~~the Warrants include provisions that, based on the Staff’s statement, preclude the Warrants from being classified~~ as ~~components~~ of equity. As a result, we have classified the Warrants as liabilities. Under this accounting treatment, we are required to measure the fair value of the Warrants at the end of each reporting period and recognize changes in the fair value from the prior period in our results of operations for the current period. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly based on factors which are outside our control. We expect that we will recognize ~~non-cash~~ ~~gains or losses due to the quarterly fair valuation of the Warrants and that such gains or losses could be material.~~

~~In connection with the Revision, our management has concluded that~~March 31, 2022, our disclosure controls and procedures were ineffective to the extent of the material weaknesses described below:

•
Our Information Technology General Controls (“ITGC”) intended to restrict access to data and applications were not ~~effective~~adequate resulting in inappropriate access and improper segregation of duties at both the system (pervasive) and end user levels across multiple applications. The Company did not maintain a fully integrated financial consolidation and reporting system, and as a result, extensive manual analyses, reconciliations, and adjustments were required in order to produce materially correct financial statements for external reporting purposes;

•
A comprehensive system of ~~March 31, 2021 due~~formal policies, procedures and controls has not been fully designed or implemented to ~~a material weakness~~ensure appropriate document retention and achieve complete, accurate and timely financial accounting, reporting and disclosures. Additionally, we did not design and maintain controls over the determination of appropriate cut-off, classification and presentation of accounts and disclosures in ~~internal control over~~the financial ~~reporting solely related to our accounting for the Warrants~~statements; and ~~if we are unable to~~

•

We did not design or maintain an effective ~~system of internal~~ control ~~over~~environment commensurate with our financial reporting ~~we may not be able~~requirements. We lacked a sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to ~~accurately report our financial results in a~~appropriately analyze, record and disclose accounting matters timely ~~manner, which may adversely affect investor confidence in us~~ and ~~materially and adversely affect our business and results of operations.~~accurately.

Following the issuance of the SEC Statement, and after consultation with our management team and our independent registered public accounting firm, the audit committee of our board of directors concluded that, in light of the SEC Statement, it was appropriate to revise our previously issued audited balance sheet as of February 9, 2021. As part of such process, we identified a material weakness in our internal controls over financial reporting, solely related to our accounting for the Warrants.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of ~~our~~the company’s annual or interim consolidated financial statements ~~will~~may not be prevented or detected ~~and corrected~~ on a timely basis. ~~Effective~~

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2022 covered by this Quarterly Report on Form 10-Q that has materially affected, or is ~~necessary for us~~reasonably likely to ~~provide reliable~~materially affect, our internal control over financial ~~reports~~reporting. Management has identified the material weaknesses in our internal controls as noted above under "Evaluation of Disclosure Controls and ~~prevent fraud. We expect to take steps~~Procedures."

Management is working to remediate the material ~~weakness, but there is no assurance that any remediation efforts will ultimately have the intended effects.~~

~~If we identify any new~~weaknesses by hiring additional qualified accounting and financial reporting personnel, implementing an advanced Enterprise Resource Planning ("ERP") system, improving contract terms and support for revenue recognition, and further evolving our accounting processes. We may not be able to fully remediate these material weaknesses ~~in the future, any such newly identified material weakness could limit our ability to prevent or detect~~until these steps have been completed and have been operating effectively for a ~~misstatement~~sufficient period of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timing filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result.time. We cannot assure you that the measures we have taken to date ~~or any measures we may~~and plan to take ~~in the future,~~ will be sufficient to remediate the material weaknesses we identified or avoid ~~potential~~the identification of additional material weaknesses in the future. If we are not able to maintain effective internal control over financial reporting, our financial statements and related disclosures may be inaccurate, which could have a material adverse effect on our business and our stock price.

In light of the material weakness described above, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with U.S. GAAP. Accordingly, we believe that the consolidated financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We may from time to time be involved in litigation and claims incidental to the conduct of our business. We are not currently subject to any pending legal (including judicial, regulatory, administrative or arbitration) proceedings that we expect to have a material impact on our consolidated financial statements. However, given the inherent unpredictability of these types of proceedings and the potentially large and/or indeterminate amounts that could be sought, an adverse outcome in certain matters could have a material effect on Fathom's financial results in any particular period. See Note 18 "Commitments and Contingencies" to our unaudited consolidated financial statements for additional information.

Item 1A. Risk Factors.

Some factors that could cause our actual results to differ materially from those results in this report are described as risks in our 2021 Form 10-K. Any of these factors could materially and adversely affect our business, financial condition, results of operations and cash flows. As of the date of this report, there have been no material changes to the risk factors previously disclosed in our 2021 Form 10-K. We may, however, disclose changes to such factors or disclose additional factors from time to time in our future ~~material weaknesses.~~filings with the SEC.

~~Item~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~Unregistered Sales of Equity Securities~~None.

On December 15, 2020, the Sponsor paid $25,000, or approximately $0.003 per Class B Ordinary Share, to cover certain offering and formation costs of the Company in consideration of 8,625,000 Class B Ordinary Shares. On January 28, 2021, the Sponsor transferred 25,000 Class B Ordinary Shares to certain of the Company’s directors, namely Kevin L. Beebe, Payne D. Brown, Richard M. Jelinek, Roma Khanna, Michael Rubenstein, Vijay K. Sondhi and Michael Vorhaus, resulting in the Sponsor holding 8,450,000 Class B Ordinary Shares. Of the 8,625,000 Class B Ordinary Shares outstanding, up to 1,125,000 Class B Ordinary Shares were subject to forfeiture to the extent that the over-allotment option was not exercised in full or in part by the underwriters in the Initial Public Offering, so that the number of the Class B Ordinary Shares would represent 20.0% of the Company’s issued and outstanding ordinary shares after the consummation of the Initial Public Offering. The underwriters exercised in full their over-allotment option in connection with the consummation of the Initial Public Offering and, as a result, 1,125,000 Class B Ordinary Shares were no longer subject to forfeiture. The Class B Ordinary Shares were issued in connection with the Company’s organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

On February 9, 2021, the Company consummated the Initial Public Offering of 34,500,000 Units, which included the full exercise by the underwriters of their over-allotment option in the amount of 4,500,000 Units. Each Unit consists of one Class A Ordinary Share ~~and one-fourth of~~ one redeemable Public Warrant, with each whole Public Warrant entitling the holder thereof to purchase one Class A Ordinary Share at a price of $11.50 per share, subject to adjustment. The Units were sold at a price of $10.00 per unit, generating gross proceeds of $345,000,000 to the Company. Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC acted as joint book-running managers for the Initial Public Offering. The securities sold in the Initial Public Offering were registered under the Securities Act on the Registration Statement. The SEC declared the Registration Statement effective on February 4, 2021.

Concurrently with the consummation of the Initial Public Offering, the Company consummated the private placement of an aggregate of 9,900,000 Private Placement Warrants to the Sponsor at a price of $1.00 per warrant, generating gross proceeds of $9,900,000 to the Company. The Private Placement Warrants are identical to the Public Warrants included as part of the units sold in the Initial Public Offering, except that the Private Placement Warrants, so long as they are held by the Sponsor or its permitted transferees, (i) are not redeemable by the Company, subject to certain limited exceptions set forth in the Registration Statement, (ii) may not (including the Class A Ordinary Shares issuable upon the exercise of the Private Placement Warrants) be transferred, assigned or sold until thirty (30) days after the completion of the initial Business Combination, subject to certain limited exceptions set forth in the Registration Statement, (iii) may be exercised on a cashless basis and (iv) are entitled to registration rights. No underwriting discounts or commissions were paid with respect to the private placement of the Private Placement Warrants to the Sponsor. The issuance and sale of the Private Placement Warrants was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

~~Use of Proceeds~~

Of the gross proceeds received from the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants, $345,000,000 was placed in the Trust Account, comprised of $338,100,000 of the proceeds from the Initial Public Offering and full exercise by the underwriters of their over-allotment option (which amount includes $12,075,000 of the underwriting deferred discounts and commissions) and $6,900,000 of the proceeds from the sale of the Private Placement Warrants. The Company paid a total of $6,900,000 in underwriting discounts and commissions and $515,958 for other costs and expenses related to the Initial Public Offering.

~~For a description of the use of the proceeds generated in the Initial Public Offering, see Part~~ I ~~Item 2 of this Quarterly Report.~~

~~Item~~tem 3. Defaults Upon Senior Securities.

None.

~~Item~~Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. ~~Exhibits~~Exhibits.


~~No.~~Exhibit Number		Description ~~of Exhibit~~
4.1*		Description of Securities.
~~3.1~~ 31.1*		~~Amended and Restated Memorandum and Articles of Association of Altimar Acquisition Corp. II (incorporated by reference to Exhibit 3.1 to the Form~~ ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

~~4.1~~		~~Specimen Unit Certificate (incorporated by reference to Exhibit 4.1 to the Amendment No. 1 to the Registration Statement on Form~~ ~~S-1~~ ~~(File~~ ~~No. 333-252260)~~ ~~filed with the Securities and Exchange Commission on February 1, 2021).~~

~~4.2~~		~~Specimen Class A Ordinary Share Certificate (incorporated by reference to Exhibit 4.2 to the Amendment No. 1 to the Registration Statement on Form~~ ~~S-1~~ ~~(File~~ ~~No. 333-252260)~~ ~~filed with the Securities and Exchange Commission on February 1, 2021).~~

~~4.3~~		~~Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form~~ ~~S-1~~ ~~(File~~ ~~No. 333-252260)~~ ~~filed with the Securities and Exchange Commission on January 20, 2021).~~

~~4.4~~		Warrant Agreement, dated as of February 4, 2021, by and between Altimar Acquisition Corp. II and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 to the Form ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

~~10.1~~		Investment Management Trust Agreement, dated as of February 4, 2021, by and between Altimar Acquisition Corp. II and Continental Stock Transfer & Trust Company, as trustee (incorporated by reference to Exhibit 10.1 to the Form ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

~~10.2~~		Registration and Shareholder Rights Agreement, dated as of February 4, 2021, by and among Altimar Acquisition Corp. II, Altimar Sponsor II, LLC and certain other security holders named therein (incorporated by reference to Exhibit 10.2 to the Form ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

~~10.3~~		Private Placement Warrants Purchase Agreement, dated as of February 4, 2021, by and between Altimar Acquisition Corp. II and Altimar Sponsor II, LLC (incorporated by reference to Exhibit 10.3 to the Form ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

~~10.4~~		Letter Agreement, dated February 4, 2021, by and among Altimar Acquisition Corp. II, Altimar Sponsor II, LLC and Altimar Acquisition Corp. II’s executive officers and directors (incorporated by reference to Exhibit 10.4 to the Form ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

~~10.5~~		~~Administrative Support Agreement, dated as of February 4, 2021, by and between Altimar Acquisition Corp. II and Altimar Sponsor II, LLC (incorporated by reference to Exhibit 10.5 to the Form~~ ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

~~10.6~~		~~Indemnification Agreement, dated as of February 4, 2021, by and between Altimar Acquisition Corp. II and Tom Wasserman (incorporated by reference to Exhibit 10.6 to the Form~~ ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

~~10.7~~		~~Indemnification Agreement, dated as of February 4, 2021, by and between Altimar Acquisition Corp. II and Wendy Lai (incorporated by reference to Exhibit 10.7 to the Form~~ ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

~~10.8~~		~~Indemnification Agreement, dated as of February 4, 2021, by and between Altimar Acquisition Corp. II and Kevin L. Beebe (incorporated by reference to Exhibit 10.8 to the Form~~ ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~


~~10.9~~		~~Indemnification Agreement, dated as of February 4, 2021, by and between Altimar Acquisition Corp. II and Payne D. Brown (incorporated by reference to Exhibit 10.9 to the Form~~ ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

~~10.10~~		~~Indemnification Agreement, dated as of February 4, 2021, by and between Altimar Acquisition Corp. II and Richard M. Jelinek (incorporated by reference to Exhibit 10.10 to the Form~~ ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

~~10.11~~		~~Indemnification Agreement, dated as of February 4, 2021, by and between Altimar Acquisition Corp. II and Roma Khanna (incorporated by reference to Exhibit 10.11 to the Form~~ ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

~~10.12~~		~~Indemnification Agreement, dated as of February 4, 2021, by and between Altimar Acquisition Corp. II and Michael Rubenstein (incorporated by reference to Exhibit 10.12 to the Form~~ ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

~~10.13~~		~~Indemnification Agreement, dated as of February 4, 2021, by and between Altimar Acquisition Corp. II and Vijay K. Sondhi (incorporated by reference to Exhibit 10.13 to the Form~~ ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

~~10.14~~		~~Indemnification Agreement, dated as of February 4, 2021, by and between Altimar Acquisition Corp. II and Michael Vorhaus (incorporated by reference to Exhibit 10.14 to the Form~~ ~~8-K~~ ~~(File~~ ~~No. 001-39994)~~ ~~filed with the Securities and Exchange Commission on February 9, 2021).~~

31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act ~~Rules 13a-14(a),~~of 1934, as ~~adopted~~Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act ~~Rules 13a-14(a),~~of 1934, as ~~adopted~~Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as ~~adopted~~Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as ~~adopted~~Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
101.INS*		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
101.LAB*		Inline XBRL Taxonomy Extension ~~Labels~~Label Linkbase Document
101.PRE
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

~~Filed herewith.~~

~~These certifications are furnished to~~Cover Page Interactive Data File (embedded within the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended, and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing.Inline XBRL document)

* Filed herewith.

~~SIGNATURES~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, ~~as amended,~~ the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		~~ALTIMAR ACQUISITION CORP. II~~	Fathom Digital Manufacturing Corporation

Date: ~~June 1, 2021~~May 16, 2022		By:		/s/ ~~Tom Wasserman~~Ryan Martin
				~~Name:~~	~~Tom Wasserman~~ Ryan Martin
				~~Title:~~	Chief Executive Officer ~~(Principal Executive Officer) and Chairman of the Board of Directors~~

~~Date: June 1, 2021~~		~~By:~~		~~/s/ Wendy Lai~~
				~~Name:~~	~~Wendy Lai~~
Date: May 16, 2022		By:	/s/ Mark Frost
	~~Title:~~		Mark Frost
			Chief Financial Officer ~~(Principal Financial Officer)~~


	March 31, 2021			December 31, 2020
	(Unaudited)
ASSETS
Current assets
Cash	$	1,651,431		$	—
Prepaid expenses		1,007,641			—

Total current assets		2,659,072			—
Deferred offering costs		—			75,000
Cash and marketable securities held in the Trust Account		345,001,095			—

TOTAL ASSETS	$	347,660,167		$	75,000


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accrued expenses	$	1,803,562		$	—
Accrued offering costs		253,607			50,000
Promissory note—related party		—			5,000

Total current liabilities		2,057,169			55,000
Warrant liability		35,903,054			—
Deferred underwriting fee payable		12,075,000			—

Total liabilities		50,035,223			55,000
Commitments and Contingencies
Class A Ordinary Shares subject to possible redemption—29,262,494 and no shares at $10.00 per share redemption value as of March 31, 2021 and December 31, 2020, respectively		292,624,940			—
Shareholders’ Equity
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued or outstanding		—			—
Class A Ordinary Shares, $0.0001 par value; 500,000,000 shares authorized; 5,237,506 and no shares issued and outstanding (excluding 29,262,494 and no shares subject to possible redemption) as of March 31, 2021 and December 31, 2020, respectively		524			—
Class B Ordinary Shares, $0.0001 par value; 50,000,000 shares authorized; 8,625,000 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively		863			863
Additional paid-in capital		20,729,270			24,137
Accumulated deficit		(15,730,653	)		(5,000	)

Total shareholders’ equity		5,000,004			20,000

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	347,660,167		$	75,000


Operating costs	$	1,902,139

Loss from operations		(1,902,139	)
Other income (expense)
Interest earned on marketable securities held in the Trust Account		1,095

Change in fair value of warrant liability		(13,069,538	)
Transaction costs allocated to the Warrants		(755,071	)

Other expense, net		(13,823,514	)
Net loss	$	(15,725,653	)

Weighted average shares outstanding, redeemable Class A Ordinary Shares		34,500,000

Basic and diluted net income per share, redeemable Class A Ordinary Shares	$	—

Weighted average shares outstanding, non-redeemable Class B Ordinary Shares		8,125,000

Basic and diluted net loss per share, non-redeemable Class B Ordinary Shares	$	(1.94	)


	Class A Ordinary Shares						Class B Ordinary Shares				Additional Paid-In			Accumulated			Total Shareholders’
	Shares			Amount			Shares		Amount		Capital			Deficit			Equity
Balance—January 1, 2021		—		$	—			8,625,000	$	863	$	24,137		$	(5,000	)	$	20,000
Sale of 34,500,000 Class A Ordinary Shares, net of underwriting discounts, offering costs and transaction costs allocated to warrant liability		34,500,000			3,450			—		—		313,327,147			—			313,330,597
Class A Ordinary Shares subject to possible redemption		(29,262,494	)		(2,926	)		—		—		(292,622,014	)		—			(292,624,940	)
Net loss		—			—			—		—		—			(15,725,653	)		(15,725,653	)

Balance—March 31, 2021		5,237,506		$	524			8,625,000	$	863	$	20,729,270		$	(15,730,653	)	$	5,000,004


	As Previously Reported			Adjustments			As Revised
Balance sheet as of February 9, 2021
Warrant liability	$	—		$	30,077,848			30,077,848
Class A Ordinary Shares subject to possible redemption		330,429,040			(30,077,848	)		300,351,190
Class A Ordinary Shares		146			300			446
Additional paid-in capital		5,003,993			7,999,103			13,003,096
Accumulated deficit		(5,000	)		(7,999,403	)		(8,004,403	)


	Three Months Ended March 31, 2021
Redeemable Class A Ordinary Shares
Numerator—earnings allocable to redeemable Class A Ordinary Shares Interest income	$	1,095

Net earnings	$	1,095
Denominator—weighted average redeemable Class A Ordinary Shares Redeemable Class A Ordinary Shares, basic and diluted		34,500,000
Earnings / basic and diluted redeemable Class A Ordinary Shares	$	0.00
Non-redeemable Class A Ordinary Shares and Class B Ordinary Shares Numerator—net loss minus redeemable net earnings
Net loss	$	(15,725,653	)
Redeemable net earnings		(1,095	)

Non-redeemable net loss	$	(15,726,748	)
Denominator—weighted average non-redeemable Class A Ordinary Shares and Class B Ordinary Shares
Non-redeemable Class A Ordinary Shares and Class B Ordinary Shares, basic and diluted		8,125,000
Loss / basic and diluted non-redeemable Class A Ordinary Shares and Class B Ordinary Shares	$	(1.94	)


Description	Level		March 31, 2021
Assets:
Marketable securities held in the Trust Account		1		345,001,095
Liabilities:
Warrant liability—Public Warrants		3	$	15,330,312
Warrant liability—Private Placement Warrants		3	$	20,572,742


	As of February 9, 2021 (Initial Measurement)			As of March 31, 2021
Stock price	$	9.40		$	9.67
Strike price	$	11.50		$	11.50
Term (in years)		5.0			5.0
Volatility		40.0	%		40.0	%
Risk-free rate		0.72	%		1.24	%
Dividend yield		0.0	%		0.0	%


	Private		Public		Warrant Liabilities
Fair value as of January 1, 2021	$	—	$	—	$	—
Initial measurement on February 9, 2021		17,144,332		12,933,516		30,077,848
Change in valuation inputs or other assumptions		3,428,410		2,396,796		5,825,206

Fair value as of March 31, 2021		20,572,742		15,330,312		35,903,054

Acquisition Date Fair Value

Estimated Life (Years)

Trade name

Customer relationships