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

~~ALTIMAR ACQUISITION CORP. II~~

NFathom Digital Manufacturing Corporation

Consolidated Statements of Cash Flows (Unaudited)

(In thousands)


	Nine Months Ended
	September 30, 2022 (Successor)			September 30, 2021 (Predecessor)
Cash Flows from Operating Activities
Net loss	$	(432,567	)	$	(8,058	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation		581			2,110
Depreciation and amortization included in cost of revenue		4,944			2,679
Amortization of intangible assets		13,014			7,217
Amortization of inventory step-up		3,241			-
Goodwill impairment		1,066,564			-
(Gain) loss on disposal of property and equipment		(164	)		84
Loss on extinguishment of debt		-			2,031
Foreign currency translation adjustment		-			96
Gain on PPP forgiveness		-			(1,624	)
Share-based compensation		5,687			31
Non cash lease expense, net		485			-
Deferred taxes		153			-
Bad debt expense		5			239
Non-controlling interest share of Fathom OpCo net loss		(561,728	)		-
Change in fair value of Fathom earnout shares liability		(52,390	)		-
Change in fair value of Sponsor earnout shares liability		(7,590	)		-
Change in fair value of Warrant liability		(28,000	)		-
Change in fair value of Tax receivable liability		(200	)		-
Change in fair value of contingent consideration		(148	)		(1,120	)
Amortization of debt financing costs		299			1,342
Changes in operating assets and liabilities that (used) provided cash:
Accounts receivable		(2,270	)		(4,772	)
Inventory		(5,907	)		(551	)
Prepaid expenses and other assets		1,754			(26	)
Accounts payable		(1,452	)		866
Accrued liabilities and other		2,185			1,193
Net cash provided by operating activities		6,496			1,737

Cash Flows from Investing Activities
Purchase of property and equipment		(10,953	)		(6,648	)
Cash used for acquisitions, net of cash acquired		-			(67,428	)
Net cash used in investing activities		(10,953	)		(74,076	)

Cash Flows from Financing Activities
Proceeds from debt		-			183,500
Payments on debt		(2,344	)		(104,091	)
Payments on finance leases		(236	)		-
Tax payment for shares withheld in lieu of taxes		(2,566	)		-
Payment of debt issuance costs		-			(1,743	)
Payments paid for contingent consideration		(2,750	)		(2,984	)
Net cash (used in) provided by financing activities		(7,896	)		74,682

Net (decrease) increase in cash		(12,353	)		2,343

Cash, beginning of period		20,357			8,188
Cash, end of period	$	8,004		$	10,531

Supplemental cash flows information:
Cash paid for interest	$	3,108		$	5,154
Cash paid for taxes		98			62
Cash paid to related parties		7,595			8,254
Property and equipment noncash transaction		1,485			911
Initial recognition of contingent consideration for acquisitions		-			1,295

Significant non-cash investing activities:
Right-of-use assets acquired through lease liabilities	$	16,600		$	-

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

Fathom Digital Manufacturing Corporation~~OTES TO~~
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

C~~ONDENSED~~Note 1. Nature of Business F

~~INANCIAL~~ S~~TATEMENTS~~

~~September 30,~~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 terms in the ~~Company is subject to all of the risks associated with early stage and emerging growth companies.~~

~~As of September 30, 2021, the Company had not commenced any operations. All activity~~Company's Annual Report on Form 10-K for the ~~period from December 7, 2020 (inception) through September 30, 2021 relates to the Company’s formation, the Company’s initial public offering (the “Initial Public Offering~~”) which is described below, subsequent to the completion of the Initial Public Offering, identifying a target company for a Business Combination, and activities in connection with the proposed business combination with Fathom Holdco, LLC (see Note 6). 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 in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selectedfiscal year ended December 31, ~~as its fiscal year end.~~2021 (the "2021 Form 10-K").

Note 2. Basis of Presentation

The ~~Registration Statement on Form S-1 (File No. 333-252260) (the “Registration Statement”) for~~accompanying unaudited consolidated financial statements include the ~~Initial Public Offering was declared effective on February 4, 2021. On February 9, 2021, the Company consummated the Initial Public Offering~~accounts of ~~34,500,000 units (the “Units~~”Fathom Digital Manufacturing Corporation and ~~with respect to the Class A Ordinary Shares~~all majority-owned subsidiaries and ~~the warrants included~~entities 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 Note 3.~~

~~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. The remaining transaction costs were charged to equity.

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 is maintained. All significant intercompany transactions and balances have been eliminated 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~~

Nconsolidation.~~OTES TO~~

C~~ONDENSED~~ F~~INANCIAL~~ S~~TATEMENTS~~

~~September 30, 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 the Company’s amended and restated memorandum and articles of association (the “~~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 the 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 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

~~ALTIMAR ACQUISITION CORP. II~~

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

~~September 30, 2021~~

~~(Unaudited)~~

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 that 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 1A. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS~~

~~In connection with the preparation of the Company’s~~ unaudited interim condensed financial statements as of September 30, 2021, management determined it should restate its previously reported unaudited interim condensed financial statements. The Company had previously determined the Class A Ordinary Shares subject to possible redemption to be equal to the redemption value of $10.00 per Class A Ordinary Shares while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management has also determined that the Class A Ordinary Shares issued in connection with the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control. Therefore, management has concluded that the redemption value should include all the Class A Ordinary Shares subject to possible redemption, resulting in the Class A Ordinary Shares subject to possible redemption being equal to their redemption value. In connection with the change in presentation for the Class A Ordinary Shares subject to possible redemption, the Company also restated its earnings per share calculation to allocate net income (loss) pro rata to Class A and Class B Ordinary Shares. The presentation contemplates a Business Combination as the most likely outcome, in which case, both the Class A Ordinary Shares and the Class B Ordinary Shares share pro rata in the income (loss) of the Company.

In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the changes and has determined that the related impact was material to the previously filed financial statements that contained the error, reported in the Company's Form 10-Qs for the quarterly periods ended March 31, 2021 and June 30, 2021 as well as the audited balance sheet reported in the Current Report on Form 8-K filed as of February 9, 2021, the closing date of the Initial Public Offering (collectively, the "Prior Affected Periods"). Therefore, the Company, in consultation with its Audit Committee, concluded that the Prior Affected Periods should be restated to present all Class A Ordinary Shares subject to possible redemption in temporary equity and to recognize accretion from the initial book value to redemption value at the time of its Initial Public Offering as well as to restate net income (loss) per share. As such, the Company is reporting these restatements to the Prior Affected Periods in this Amended Quarterly Report.

~~ALTIMAR ACQUISITION CORP. II~~

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

~~September 30, 2021~~

~~(Unaudited)~~

~~There has been no change in the Company's total assets, liabilities or operating results.~~

~~The impact of the restatement on the Company's previously issued financial statements is reflected in the following tables.~~

The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company's previously reported audited balance sheet as of February 9, 2021:

Balance Sheet as of February 9, 2021 (audited) As Previously Reported Adjustment As Revised
Class A Ordinary Shares subject to possible redemption $ 300,351,190 $ 44,648,810 $ 345,000,000
Class A Ordinary Shares 446 (446) —
Additional paid-in capital 13,003,096 (13,003,096) —
Accumulated deficit (8,004,403) (31,645,268) (39,649,671)
Total shareholders' equity (deficit) 5,000,002 (44,648,810) (39,648,808)

The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company's previously reported unaudited balance sheet as of March 31, 2021:

Balance Sheet as of March 31, 2021 (unaudited) As Previously Reported Adjustment As Revised
Class A Ordinary Shares subject to possible redemption $ 292,624,940 $ 52,375,060 $ 345,000,000
Class A Ordinary Shares 524 (524) —
Additional paid-in capital 20,729,270 (20,729,270) —
Accumulated deficit (15,730,653) (31,645,266) (47,375,919)
Total shareholders' equity (deficit) 5,000,004 (52,375,060) (47,375,056)

The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company's previously reported unaudited statement of cash flows for the three months ended March 31, 2021:

Three Months ended March 31, 2021 (unaudited) As Previously Reported Adjustment As Revised
Non-cash investing and financing activities
Initial classification of Class A Ordinary Shares subject to possible redemption 300,351,190 (300,351,190) —
Change in value of Class A Ordinary Shares subject to possible redemption (7,726,250) 7,726,250 —

~~The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company's previously reported unaudited balance sheet as of June 30, 2021:~~

Balance Sheet as of June 30, 2021 (unaudited) As Previously Reported Adjustment As Revised
Class A Ordinary Shares subject to possible redemption $ 306,503,630 $ 38,496,370 $ 345,000,000
Class A Ordinary Shares 385 (385) —
Additional paid-in capital 6,850,719 (6,850,719) —
Accumulated deficit (1,851,965) (31,645,266) (33,497,231)
Total shareholders' equity (deficit) 5,000,002 (38,496,370) (33,496,368)

~~ALTIMAR ACQUISITION CORP. II~~

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

~~September 30, 2021~~

~~(Unaudited)~~

Six Months ended June 30, 2021 (unaudited) As Previously Reported Adjustment As Revised
Non-cash investing and financing activities
Initial classification of Class A Ordinary Shares subject to possible redemption 300,351,192 (300,351,192) —
Change in value of Class A Ordinary Shares subject to possible redemption 6,152,436 (6,152,436) —

The impact to the reported amounts of weighted average shares outstanding and the basic and diluted net income (loss) per share is presented below for the quarterly periods ended March 31, 2021 and June 30, 2021:

Net Income (Loss) Per Share
Three Months Ended March 31, 2021 (unaudited) As Previously Reported Adjustment As Revised
Weighted average shares outstanding - Class A Ordinary Shares 34,500,000 (14,950,000) 19,550,000
Basic and diluted net income (loss) per share - Class A Ordinary Shares $ — $ (0.57) $ (0.57)
Weighted average shares outstanding - Class B Ordinary Shares 8,125,000 — 8,125,000
Basic and diluted net income (loss) per share - Class B Ordinary Shares $ (1.94) $ 1.37 $ (0.57)

Net Income (Loss) Per Share
Three Months Ended June 30, 2021 (unaudited) As Previously Reported Adjustment As Revised
Weighted average shares outstanding - Class A Ordinary Shares 34,500,000 — 34,500,000
Basic and diluted net income (loss) per share - Class A Ordinary Shares $ — $ 0.32 $ 0.32
Weighted average shares outstanding - Class B Ordinary Shares 8,625,000 — 8,625,000
Basic and diluted net income (loss) per share - Class B Ordinary Shares $ 1.61 $ (1.29) $ 0.32

Net Income (Loss) Per Share
Six Months Ended June 30, 2021 (unaudited) As Previously Reported Adjustment As Revised
Weighted average shares outstanding - Class A Ordinary Shares 34,500,000 (7,433,702) 27,066,298
Basic and diluted net income (loss) per share - Class A Ordinary Shares $ — $ (0.05) $ (0.05)
Weighted average shares outstanding - Class B Ordinary Shares 8,376,381 — 8,376,381
Basic and diluted net income (loss) per share - Class B Ordinary Shares $ (0.22) $ 0.17 $ (0.05)

~~NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

~~Basis of Presentation~~

~~The accompanying unaudited condensed~~consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ~~of America~~ (“~~GAAP~~”GAAP”) ~~for interim financial information~~ and in accordance with the instructions to the Quarterly Report on Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in condensed financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the ~~SEC for~~Securities and Exchange Commission (“SEC”) applicable to interim ~~financial reporting.~~reports. Accordingly, they do not include all of the information and ~~footnotes necessary~~notes required by GAAP for a complete ~~presentation of~~ financial ~~position, results of operations or cash flows.~~ statements and should be read in conjunction with the audited financial statements included in our 2021 Form 10-K. The Company's annual reporting period is the calendar year.

In the Company’s opinion, of the ~~Company’s management, the accompanying~~ unaudited ~~condensed~~consolidated financial statements ~~include~~contain all

~~ALTIMAR ACQUISITION CORP. II~~

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

~~September 30, 2021~~

~~(Unaudited)~~

adjustments, consisting 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 ~~interim~~ results of operations for the three and nine months ended September 30, ~~2021~~2022 are not necessarily indicative of the results to be expected for the ~~year ending December 31, 2021 or for any future periods.~~

~~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~~”), 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, among others, 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~~

full year. The preparation of ~~the condensed~~ financial statements in ~~conformity~~accordance with GAAP requires ~~the Company’s~~ management to make estimates, judgments and assumptions that affect the amounts reported ~~amounts of assets~~in the financial statements. Actual results may differ from those estimates, judgments and ~~liabilities and disclosure of contingent assets and liabilities at~~assumptions. Amounts in the ~~date of the condensed~~prior years' unaudited consolidated financial statements ~~and the reported amounts of revenues and expenses during the reporting period.~~

~~Making estimates requires the Company’s management~~are reclassified whenever necessary 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 condensed 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. As of September 30, 2021 the Company held $345,011,697 in a money market fund in the Trust Account. The Company did not have any cash equivalents as of December 31, 2020.

~~Offering Costs~~

~~Offering costs consist of legal, accounting and underwriting fees and other costs incurred through the balance sheet date that are directly related~~conform to the ~~Initial Public Offering. Offering costs amounted to $19,490,958,~~current year's presentation. The reclassifications had no impact on our results of which $18,735,887 were charged to Class A Ordinary Shares subject to possible redemption upon the completion of the Initial Public Offering and $755,071 were expensed on the condensed statement of operations.

~~ALTIMAR ACQUISITION CORP. II~~

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

~~September 30, 2021~~

~~(Unaudited)~~

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

~~The Company accounts~~operations, financial position, or cash flows for the ~~Class A Ordinary Shares subject to possible redemption in accordance with the guidance in~~Predecessor Period as defined below.

Recently Adopted Accounting Standards ~~Codification (“~~

~~ASC~~

~~”) Topic 480, “Distinguishing Liabilities from Equity~~.” 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, as of September 30, 2021 and December 31, 2020, 34,500,000 and zero, respectively, 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.

The Company recognizes changes in redemption value immediately as they occur and adjusts carrying value of redeemable Ordinary Shares to equal the redemption value at the end of the reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of the redeemable Class A Ordinary Shares resulted in charges against additional paid-in capital and accumulated deficit.

~~At September 30, 2021 the Class A Ordinary Shares reflected in the condensed balance sheet are reconciled in the following table:~~


~~Gross proceeds~~	$	~~345,000,000~~
~~Plus / (less) adjustments to carrying value:~~
~~Proceeds allocated to the Public Warrants~~	~~(12,933,516)~~
~~Class A Ordinary Shares issuance costs~~	~~(18,735,887)~~
~~Plus:~~
~~Accretion of carrying value to redemption value~~	~~31,669,403~~
~~Class A Ordinary Shares subject to possible redemption~~	$	~~345,000,000~~

~~Warrant Liability~~

~~The Company accounts 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~~In February 2016, the Financial Accounting Standards Board ~~(the “~~(“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, ~~FASB~~Leases” ("Topic 842") ~~ASC~~Section A - Leases: Amendments to the FASB Accounting Standards Codification ("ASC"). 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 of the effective date. The Company also elected the practical expedient to use hindsight when determining the lease term and the practical expedient 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 ~~480, “~~842.

Adoption of the new standard resulted in the recording of $~~Distinguishing Liabilities from Equity~~3,122,” and ~~ASC~~$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 ~~815, “~~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 previous lease guidance.

Fathom Digital Manufacturing Corporation~~Derivatives~~
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 ~~Hedging.” The assessment considers whether~~Fathom OpCo closed a series of transactions (collectively, the ~~Warrants are freestanding financial instruments~~"Business Combination") pursuant to ~~ASC Topic 480,~~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 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 changed its name to Fathom Digital Manufacturing Corporation ("Fathom", the "Company", "we", or "our"). Following the closing, the former public investors in Altimar II, 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 either Class A common stock or exchangeable Class A Units of Fathom OpCo. 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 (one 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 ~~Warrants meet~~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 ~~liability pursuant~~variable interest entity, and the Company was determined to ~~ASC Topic 480~~the be the primary beneficiary and ~~whether~~is therefore also the ~~Warrants meet all~~accounting acquirer in the Business Combination.

As a result of the ~~requirements~~Business Combination, the Company's financial statement presentation distinguishes Fathom OpCo as the "Predecessor" through the Closing Date ("the 2021 Predecessor Period" or "Predecessor Period"). The Company is the "Successor" ("2022 Successor Period" or "Successor Period") for ~~equity classification under ASC Topic 815, including whether~~periods after the ~~Warrants~~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 ~~indexed~~presented on a full step-up basis and are therefore not comparable 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~~unaudited consolidated financial statements of the ~~Warrants and~~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 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 ~~each subsequent quarterly period end date while the Warrants are outstanding.~~December 31, 2021 (Successor).

The seller earnout contingent consideration below represents the estimated fair market value of the ~~warrants~~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 Closing Date. These estimated fair values are preliminary and subject to adjustment in subsequent periods.

In conjunction with the Business Combination, the Company recognized as a ~~non-cash gain or loss~~deferred tax liability $17,573. The deferred tax liability was recorded on the ~~statements of operations. The fair value~~standalone books of the ~~Public Warrants~~Company with an offset to goodwill. The deferred tax liability is included in the other noncurrent liabilities caption in the table below.

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

The Business Combination was ~~determined~~accounted for using the ~~closing price~~acquisition method of ~~the Public Warrants,~~accounting and the fair value of the ~~Private Placement Warrants~~total purchase consideration transferred was ~~estimated~~$1,364,220. 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 following table illustrates 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

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. The Company continues to assess the impact of the Up-C structure on the deferred tax liability with respect to its investment in Fathom OpCo and expects to complete the assessment in the fourth quarter. It is possible that the resolution of any remaining conclusions from this assessment may have material changes to the assets acquired or liabilities assumed in the fourth quarter. 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	Acquisition date fair value		Estimated useful life (in years)
Trade name	$	70,000		15
Customer relationships		180,000		19
Developed software		15,700		5
Developed technology		4,300		5
Total	$	270,000

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

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

Note 4 - Fathom OpCo Predecessor Period Acquisitions

Acquisition of Summit Tooling, Inc., and Summit Plastics, LLC:

Fathom OpCo completed an acquisition of Summit Tooling, Inc. ("Summit Tooling") and Summit Plastics, LLC (“Summit Plastics”; together with Summit Tooling, “Summit”) on February 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 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 ASC 805 - Business Combinations and the fair value of the total purchase consideration transferred consisted of the following:


Consideration Transferred:	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 2021 consolidated statement of comprehensive loss. In addition, Fathom OpCo paid a ~~Monte Carlo simulation approach (see~~ 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.

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 statement of comprehensive loss for the 2021 Predecessor Period are as follows:


	Period From January 1 - September 30, 2021 (Predecessor)
Revenue	$	4,496
Net loss	$	(1,029	)

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

Acquisition of Precision Process Corp.:

Fathom OpCo completed an acquisition of Precision Process Corp. ("PPC") on April 30, 2021 in which it acquired 100 percent of the membership interest of PPC. In conjunction with the equity purchase, Fathom Opco acquired the real estate in which PPC performs their operations. PPC is a manufacturing company that offers integrated engineering-to-production services, specializing in making prototype, small-run and mass production of parts and components for medical, high-tech, automotive and metal stamping industries. The primary reason for the acquisition was to expand Fathom OpCo's capabilities into metal stamping with high-quality manufacturing and industrial technology companies in North America.

The transaction was accounted for using the acquisition method of accounting and the fair value of the total purchase consideration transferred consisted of the following:


Consideration Transferred:	Total
Cash	$	25,721
Fair value of total consideration transferred	$	25,721

The consideration excludes $984 of buyer transaction expenses that are included in other expenses within the 2021 consolidated statement of comprehensive loss. Fathom OpCo paid a transaction fee of $264 to an affiliate of the majority member of Fathom OpCo.

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


Recognized amounts of identifiable assets acquired and liabilities assumed	Total
Cash	$	162
Accounts receivable, net		899
Inventory		480
Fixed assets, net		2,413
Intangible assets		14,200
Total assets acquired		18,154
Accounts payable		148
Accrued expenses		79
Total liabilities assumed		227
Total identifiable net assets		17,927
Goodwill	$	7,794

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

The amounts of revenue and net loss of PPC since the acquisition date included in the consolidated statement of comprehensive loss for the 2021 Predecessor Period is as follows:


	Period From January 1 - September 30, 2021 (Predecessor)
Revenue	$	4,571
Net loss	$	(262	)

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

Acquisition of Centex Machine and Welding, Inc. and Laser Manufacturing, Inc.:

Fathom OpCo completed acquisitions of Centex Machine and Welding, Inc. ("Centex") and Laser Manufacturing, Inc. ("Laser") on April 30, 2021 in which it acquired 100 percent of the equity interests of Centex and Laser. Centex is a top tier medical device manufacturing supplier and Laser provides high precision manufacturing services, combining state of the art technology with expert craftsmanship to deliver superior products. The acquisition was completed in order to expand Fathom OpCo's high-quality manufacturing and industrial technology capabilities in North America.

The transaction was accounted for using the acquisition method of accounting and the fair value of the total purchase consideration transferred consisted of the following:


Consideration Transferred:	Centex		Laser		Total
Cash	$	11,774	$	6,946	$	18,720
Fair value of total consideration transferred	$	11,774	$	6,946	$	18,720

The consideration excluded $1,226 of buyer transaction expenses that are included in other expenses within the 2021 consolidated statement of comprehensive loss. Fathom OpCo also paid a transaction fee of $190 to an affiliate of the majority member of the Fathom OpCo in connection with the transaction.

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 businesses into the Company’s existing platform. The goodwill recognized is partially deductible for tax purposes.

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


	Acquisition Date Fair Value
	Centex		Laser
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash	$	-	$	68
Accounts receivable, net		1,775		900
Inventory		524		622
Prepaid expenses		108		1
Fixed assets, net		1,787		760
Intangible assets		6,243		3,557
Other assets		1		2
Total assets acquired		10,438		5,910
Accounts payable		252		568
Paycheck Protection Program (PPP) loan		649		-
Accrued expenses		271		27
Other current liabilities		23		44
Other noncurrent liabilities		1,234		703
Total liabilities assumed		2,429		1,342
Total identifiable net assets		8,009		4,568
Goodwill	$	3,765	$	2,378

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

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

The combined amounts of revenue and net loss of Centex and Laser since the acquisition date included in the consolidated statement of comprehensive loss for the 2021 Predecessor Period and is as follows:


	Period From January 1 - September 30, 2021 (Predecessor)
Revenue	$	5,756
Net loss	$	(677	)

Acquisition of Sureshot Precision, LLC:

Fathom OpCo completed an acquisition of Sureshot Precision, LLC (d/b/a as "Micropulse West") on April 30, 2021 in which it acquired 100 percent of the membership interest of Micropulse West. Micropulse West is a full-service specialist offering a variety of services such as wire Electrical Discharge Machine (“EDM”), ram EDM, small hole EDM, computer numerical control ("CNC") and manual machining/turning, surface grinding, and inspection. The acquisition was consistent with the Fathom OpCo’s mission to acquire high-quality manufacturing and industrial technology companies in North America.

The transaction was accounted for using the acquisition method of accounting and the fair value of the total purchase consideration transferred consisted of the following:


Consideration Transferred:	Total
Cash	$	12,452
Contingent consideration		1,295
Fair value of total consideration transferred	$	13,747

The consideration excludes $869 of buyer transaction expenses that are included in other expenses within the 2021 consolidated statement of comprehensive loss. In addition, Fathom OpCo paid a transaction fee of $130 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 businesses into Fathom OpCo's existing platform. The goodwill recognized is partially deductible for tax purposes.

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


Recognized amounts of identifiable assets acquired and liabilities assumed	Total
Cash	$	70
Accounts receivable, net		866
Inventory		333
Other current assets		10
Fixed assets, net		2,490
Intangible assets		7,000
Total assets acquired		10,769
Accounts payable		139
Accrued expenses		13
Other current liabilities		99
Total liabilities assumed		251
Total identifiable net assets		10,518
Goodwill	$	3,229

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

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

The amounts of revenue and net loss of Micropulse West since the acquisition date included in the 2021 Predecessor Period consolidated statement of comprehensive loss is as follows:


	Period From January 1 - September 30, 2021 (Predecessor)
Revenue	$	3,022
Net loss	$	(187	)

Note ~~9).~~

~~Income Taxes~~

5. Revenue

The Company accounts for ~~income taxes under~~revenue in accordance with ASC ~~Topic 740, “~~606~~Income Taxes~~. ~~,” which prescribes~~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 ~~recognition threshold~~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 ~~measurement attribute~~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 ~~financial statement recognition and measurement of tax positions taken or expected~~price charged 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.~~customers. The Company’s ~~management determined that the Cayman Islands is the Company’s major~~

~~ALTIMAR ACQUISITION CORP. II~~

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

~~September 30, 2021~~

~~(Unaudited)~~

~~tax jurisdiction. The Company recognizes accrued interest~~payments terms are consistent with industry standards and ~~penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2021 and December 31, 2020, there were no unrecognized tax benefits and no amounts accrued~~never exceed 12 months.

Revenue by product line 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~~

~~The Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share~~.” The Company has two classes of ordinary shares, which are referred to as Class A Ordinary Shares and Class B Ordinary Shares. Income and losses are shared pro rata between the two classes of ordinary shares.

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 the Public Warrants issued in connection with the Initial Public Offering and the sale of the Private Placement Warrants, because the exercise of the Warrants is contingent upon the occurrence of future events. Accretion associated with the redeemable shares of the Class A Ordinary Shares is excluded from earnings per share as the redemption value approximates fair value.

~~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
September 30, 2021 Nine Months Ended
September 30, 2021
Redeemable Class A Ordinary Shares
Numerator:
Allocation of net income (loss) $ 2,082,014 $ 587,479
Denominator:
Basic and diluted weighted average shares outstanding 34,500,000 29,571,429
Basic and diluted net income (loss) per share $ 0.06 $ 0.02
Class B Ordinary Shares
Numerator:
Allocation of net income (loss) $ 520,503 $ 168,073
Denominator:
Basic and diluted weighted average shares outstanding 8,625,000 8,460,165
Basic and diluted net income (loss) per share $ 0.06 $ 0.02

~~For~~ the three and nine months ended September 30, 2022 and September 30, 2021 ~~basic~~were as follows:


	Three Months Ended				Nine Months Ended
	September 30, 2022 (Successor)		September 30, 2021 (Predecessor)		September 30, 2022 (Successor)		September 30, 2021 (Predecessor)
Additive manufacturing	$	3,154	$	4,480	$	11,713	$	13,322
Injection molding		5,984		7,812		19,892		20,941
CNC machining		15,530		14,160		43,441		30,063
Precision sheet metal		13,719		13,284		43,153		38,494
Ancillary product lines		1,823		1,745		4,538		5,067
Total revenue	$	40,210	$	41,481	$	122,737	$	107,887

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 ~~diluted shares~~transportation. Costs are determined on the ~~same~~first-in, first-out (“FIFO”) method.

Inventories consisted of the following:


	Period Ended
	September 30, 2022			December 31, 2021
Raw materials	$	4,482		$	4,967
Work in process		9,965			5,368
Finished goods		1,968			3,506
Tooling		225			605
Subtotal		16,640			14,446
Allowance for obsolescence		(809	)		(1,281	)
Total	$	15,831		$	13,165

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

Note 7. Property and Equipment

Property and equipment, net, consisted of the following:


	Period Ended
	September 30, 2022			December 31, 2021
Machinery and equipment	$	40,361		$	33,182
Furniture and fixtures		391			180
Computer equipment		382			804
Property and leasehold improvements		7,002			7,180
Construction in progress		5,746			2,859
Transportation equipment		312			454
Total		54,194			44,659
Accumulated depreciation and amortization		(4,997	)		(132	)
Total	$	49,197		$	44,527

Depreciation expense included in operating expenses for the three months ended September 30, 2022 and September 30, 2021 was $307 and $589, respectively, and $581 and $2,110 for the nine months ended September 30, 2022 and September 30, 2021, respectively. Depreciation expense included in cost of revenues for the three months ended September 30, 2022 and September 30, 2021 was $1,492 and $1,580, respectively, and $4,283 and $2,679 for the nine months ended September 30, 2022 and September 30, 2021, respectively.

Note 8. Goodwill and Intangible Assets, net

A rollforward of goodwill is as ~~there are no redeemable and non-redeemable securities that are dilutive to~~follows:



Balance at December 31, 2021	$	1,189,464
Measurement period adjustments		(1,121	)
Goodwill impairment		(1,066,564	)
Balance at September 30, 2022	$	121,779

As a result of sustained decreases in the Company’s ~~shareholders.~~

~~Concentration of Credit Risk~~

~~Financial instruments that potentially subject~~publicly quoted share price, lower market multiples for a relevant peer group, and challenging macroeconomic conditions, the Company ~~to concentrations~~concluded there were impairment indicators and conducted a quantitative goodwill impairment assessment, including additional testing of ~~credit risk consist~~its definite-lived intangibles, and other long-lived assets as 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~~

September 30, ~~2021~~

~~(Unaudited)~~

~~Fair Value~~2022. As a result 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 9).~~

~~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 condensed financial statements asthis assessment, the Company did not ~~hold convertible instruments prior~~identify an impairment to ~~January 1, 2021.~~

~~The Company’s management does not believe that any~~its definite-lived intangible assets or other ~~recently issued,~~long-lived assets, but ~~not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements.~~

~~NOTE 3. 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 1 Class A Ordinary Share and one-fourth of one redeemable Public Warrant. Each whole Public Warrant entitles the holder to purchase 1 Class A Ordinary Share at an exercise price of $11.50 per Class A Ordinary Share (see Note 8).

~~NOTE 4. 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 1 Class A Ordinary Share at a price of $11.50 per Class A Ordinary Share, subject to adjustment (see Note 8). A portion of the proceeds from the sale of the Private Placement Warrants was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company ~~does not complete~~recorded 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,$1,066,564 non-deductible, non-cash goodwill impairment charge (or $19.27 per basic and ~~the Private Placement Warrants will expire worthless.~~

~~NOTE 5. RELATED PARTY TRANSACTIONS~~

~~Founder 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.

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 adjusteddiluted share) 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.

~~ALTIMAR ACQUISITION CORP. II~~

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

~~September 30, 2021~~

~~(Unaudited)~~

~~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 and nine months ended September 30, 2022 in our unaudited consolidated statements of comprehensive income (loss).

The Company estimated the fair value of the Company using an equal allocation between the discounted cash flow method under the income approach and the public company guideline method under the market approach. The significant assumptions used in the valuation include revenue growth rates, future gross profit margins and operating expenses used to calculate projected future cash flows, determination of the weighted average cost of capital, and future economic and market conditions. The terminal value is based on an exit revenue multiple which requires significant assumptions regarding the selections of appropriate multiples that consider relevant market trading data. The Company bases its estimates and assumptions on its knowledge of the digital manufacturing industry, recent performance, expectations of future performance and other assumptions the Company believes to be reasonable.

Intangible assets, net consisted of the following:


	September 30, 2022						December 31, 2021
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net

Trade name	$	70,000	$	3,615	$	66,385	$	70,000	$	98	$	69,902
Customer relationships		180,000		7,339		172,661		180,000		252		179,748
Developed software		15,700		2,433		13,267		15,700		22		15,678
Developed technology		4,300		666		3,634		4,300		6		4,294
Total intangible assets	$	270,000	$	14,053	$	255,947	$	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 amortized, was $4,535 and $2,887 for the three months ended September 30, 2022 and September 30, 2021, respectively, and $13,675 and $7,892 for the nine months ended September 30, 2022 and September 30, 2021, respectively. There are no intangible assets, other than goodwill, with indefinite useful lives.

The following table represents the estimated aggregate amortization expense for each of the five succeeding fiscal calendar years.


Year	Aggregate Amortization
Remaining 2022	$	4,535
2023		18,140
2024		18,140
2025		18,140
2026		18,041

Note 9. Reorganization

In July 2022, the Company's Board of Directors approved a reorganization plan (the "Reorganization") designed to consolidate the Company’s national footprint, streamline legacy leadership, and centralize core business functions following the completion of 13 acquisitions by Fathom since 2019. Pursuant to the Reorganization, the Company intends to:

• Consolidate its existing facility in Oakland, CA into Fathom headquarters in Hartland, WI, improving utilization and reducing costs;

• Establish a Fathom technology center in Fremont, CA that will focus on new and emerging technologies, specifically in the additive market; and

• Consolidate leadership and other roles through a net workforce reduction of approximately 6%, create an accounting shared service organization to streamline company-wide processes and create economies of scale while pursuing additional shared-service systems in other administrative functions.

The Company has commenced workforce reductions and expects to complete these actions by the end of the second quarter of 2023. The Company has also commenced the relocation of its Oakland, CA facility to Hartland, WI and expects to complete these activities by the end of the first quarter 2023. Reorganizing charges are presented on the face of our unaudited consolidated statement of comprehensive loss as an operating expense. For the three months and nine months ended September 30, 2022 and September 30, 2021, the Company has incurred ~~$30,000~~costs of $996 and ~~$80,000, respectively, in fees for these services, of which $10,000 is included in accrued expenses~~$0, respectively. Total reorganizing costs are expected to be approximately $1,600 and incurred through June 2023.

The following table summarizes activity in the ~~accompanying condensed~~liability related to the Company's reorganization plan.


Liability balance at December 31, 2021	$	-
Charges		659
Payments		(178	)
Liability balance at September 30, 2022	$	481

The reorganization liability resides in other current liabilities within our unaudited consolidated balance sheet and as of September 30, ~~2021.~~

~~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 of $300,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2021 and (ii) the completion2022 consists of the ~~Initial Public Offering. The outstanding balance under~~lease termination of our Oakland, CA facility for $149 and employee termination costs of $332. Cash payments are expected to be disbursed by the ~~Promissory Note of $94,890 was repaid at the closing~~end of the ~~Initial Public Offering on February 9, 2021, at which point the Promissory~~ second quarter of 2023.

Note ~~was no longer available to the Company.~~

~~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 “10. Warrant Liability~~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. Except for the foregoing, the terms of the Working Capital Loans, if any, have not been determined 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 September 30, ~~2021~~2022, the Company had 8,625,000 Public Warrants outstanding with a fair value price of $0.20 per Public Warrant, and 9,900,000 Private Placement Warrants outstanding with a fair value price of $0.42 per Private Placement Warrant. Each reporting period the public and private warrants are fair valued with the change in the fair value being recognized in the unaudited consolidated statement of comprehensive income (loss). The change in the fair value for the three and nine months ended September 30, 2022 was $7,400 and $28,000, respectively, and is recognized in Other income.

The below table summarizes the number of outstanding warrants and the fair value as of September 30, 2022 and December 31, ~~2020, there were no amounts outstanding~~2021.


	September 30, 2022				December 31, 2021
	Fair Value		# of Warrants		Fair Value		# of Warrants
Public Warrants	$	1,720		8,625,000	$	7,600		8,625,000
Private Placement Warrants		4,180		9,900,000		26,300		9,900,000
Total Warrant Liability	$	5,900			$	33,900

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

Note 11. 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 ~~Working Capital Loans.~~revolving credit agreement were $

~~NOTE 6. COMMITMENTS AND CONTINGENCIES~~27,000

~~Risks and Uncertainties~~

~~Management continues to evaluate~~at September 30, 2022. The loans made under the ~~impact~~New Credit Agreement will mature in December 2026.

On November 10, 2022, the Company entered into an amendment (the “Amendment”) of the ~~COVID-19 pandemic~~New Credit Agreement (as amended by the Amendment, the “Amended Credit Agreement) with the administrative agent thereof (the “Administrative Agent”) and ~~has concluded that, while~~the other lenders party thereto to modify certain financial covenants. Specifically, the Amendment (i) reduced the minimum interest coverage ratio from 3.00 to 1.0 to 2.50 to 1.0 for each fiscal quarter ending in fiscal 2023, to 2.75 to 1.0 for the fiscal quarters ending on March 31, 2024 and June 30, 2024, with the minimum interest coverage ratio reverting back to 3.00 to 1.0 for each fiscal quarter ending on and after September 30, 2024, (ii) increased the maximum net leverage ratio to 4.50 to 1.0 for each fiscal quarter ending on September 30, 2022 through June 30, 2023, which ratio will decrease thereafter over time until it ~~is reasonably possible that~~reaches 3.50 to 1.0 for each fiscal quarter ending on and after June 30, 2024, and (iii) prohibits certain restricted payments by the ~~COVID-19 pandemic could have~~Company otherwise permitted by Section 6.06(g) of the Amended Credit Agreement through September 30, 2024.

The Amendment also replaces the Adjusted LIBO Rate (e.g., LIBO Rate multiplied by the then applicable statutory reserve rate per annum), plus a ~~negative effect~~range of applicable margins, as an interest election under the Amended Credit Agreement, with Term SOFR plus 0.10% (“Adjusted Term SOFR”) per annum and Daily Simple SOFR plus 0.10% per annum, as appliable, in each case plus an applicable margin adjustment ranging from 2.25% to 3.75% based on the Company’s ~~financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable~~most recent net leverage ratio calculation as of the ~~date of these condensed financial statements. The condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.~~

~~Registration 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. applicable interest determination date.

In addition, the ~~holders have certain “piggy-back” registration rights~~Amendment replaces the Adjusted LIBO Rate plus 1.00% per annum as one of the interest rate floors applied in determining the alternate base interest rate for ABR Loans (as defined in the Amended Credit Agreement), with ~~respect~~Adjusted Term SOFR plus 1.00% per annum. Lastly, the Amendment provides that the applicable margin applicable to ~~registration statements filed subsequent~~ABR Loans increase to 2.75% to the ~~completion~~extent the Company’s net leverage ratio equals or exceeds 4.00 to 1.0 on the applicable date.

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 Amended Credit Agreement is available for working capital and other general corporate purposes and includes a ~~Business Combination. However,~~letter of credit sub-facility of up to $5,000. The Amended 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 ~~registration~~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 ~~shareholder rights~~interest coverage covenants. The Company is in compliance with all debt covenants related to the Amended Credit Agreement as of September 30, 2022.

The Company’s debt as of September 30, 2022 and December 31, 2021 is as follows:


	As of September 30, 2022						As of December 31, 2021
Debt Description	Interest Rate			Amount			Interest Rate			Amount
New Credit Agreement Revolver		5.70	%	$	27,000			3.60	%	$	27,000
New Credit Agreement Term Loan		5.75	%		122,656			3.72	%		125,000
Total principal long-term debt					149,656						152,000
Debt issuance costs					(1,514	)					(1,812	)
Total debt, net					148,142						150,188
Less: current portion of debt					31,955						29,697
Long-term debt, net of current portion				$	116,187					$	120,491

Interest on all debt is payable in 90 day increments, with the unpaid amount due upon maturity. Interest expense associated with debt was $2,045 and $5,054 for the three months ended September 30, 2022 and September 30, 2021, respectively, and $5,361 and $8,800 for the nine months ended September 30, 2022 and September 30, 2021, 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 September 30, 2022 and September 30, 2021 of $69, and $726, respectively, and $299 and $1,342 for the nine months ended September 30, 2022 and September 30, 2021, 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 September 30, 2022, the Company recognized $841 of prepaid assets and $303 of other current liabilities in the unaudited consolidated balance sheet. For the three months and nine months ended September 30, 2022, the Company recognized $842 and $2,527 of insurance expense in selling, general and administrative ("SG&A") expenses, respectively.

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

Note 12. Other (Income) Expense

Other income and expense, net for the three and nine months ended September 30, 2022 and September 30, 2021 are as follows:


	Three Months Ended						Nine Months Ended
	September 30, 2022 (Successor)			September 30, 2021 (Predecessor)			September 30, 2022 (Successor)			September 30, 2021 (Predecessor)
Acquisition expenses	$	-		$	-		$	-		$	4,045
Loss on sale of assets		-			84			24			84
Loss on debt extinguishment		-			-			-			2,031
Loan prepayment fees		-			-			-			1,463
Loss on fair value of contingent consideration		-			235			-			-
Other		81			273			252			1,384
Other expense		81			592			276			9,007
Change in fair value of Fathom and Sponsor Earnout Shares		(18,080	)		-			(59,980	)		-
Change in fair value of Warrants		(7,400	)		-			(28,000	)		-
Change in fair value of TRA		-			-			(200	)		-
Gain on PPP forgiveness		-			-			-			(1,624	)
Gain on fair value of contingent consideration		-			-			(148	)		(1,120	)
Gain on sale of assets		-			-			(188	)		-
Other		(68	)		(150	)		(255	)		(471	)
Other income		(25,548	)		(150	)		(88,771	)		(3,215	)
Other (income) expense, net	$	(25,467	)	$	442		$	(88,495	)	$	5,792

Note 13. 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 ~~will not permit~~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 ~~registration statement filed~~combination of the foregoing.

Share Based Compensation Expense

Share based compensation was $1,762 and $0 for the three months ended September 30, 2022 and September 30, 2021, respectively, and $5,687 and $31 for the nine months ended September 30, 2022 and September 30, 2021, respectively.

Stock Options

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 and nine months ended September 30, 2022 was $0.

The following table summarizes provides the assumptions used in the Black-Scholes model valuation of stock options for the nine months ended September 30 2022:


	September 30, 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

At September 30, 2022, there was approximately $1,087 of total unrecognized compensation cost related to unvested stock options granted under the ~~Securities Act~~2021 Omnibus Plan. That cost is expected to ~~become effective until termination~~be recognized over a weighted average period 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. 2.42 years as of September 30, 2022.

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

Restricted Stock Units and Restricted Stock

Restricted stock unit awards are share-settled awards and restrictions lapse ratably over the ~~expenses incurred in connection with the filing~~vesting period, which is generally a period of ~~any such registration statements.~~

~~ALTIMAR ACQUISITION CORP. II~~

N~~OTES TO~~one Cto ~~ONDENSED~~three years F~~INANCIAL~~ S~~TATEMENTS~~

~~September 30, 2021~~

~~(Unaudited)~~

~~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~~employee's continuing service to the Company. Restricted stock awards are awards of shares subject to vesting and any other conditions specified in the related award agreements.

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

A summary of the ~~underwriting agreement.~~status of the Company's restricted stock unit and restricted stock award activity and the changes during the nine months ended September 30, 2022 are as follows:


	Shares			Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Non-vested at December 31, 2021		1,468,392		$	10.00	$	-
Granted		871,430			8.30		-
Vested		(948,684	)		10.00		-
Forfeited		(4,035	)		8.72		-
Non-vested at September 30, 2022		1,387,103		$	7.87	$	-

At September 30, 2022, there was approximately $8,768 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 2.43 years.

Note 14. Earnings Per Share and Earnings Per Unit

~~Business Combination Agreement~~

~~On July 15, 2021,~~

Successor

Basic net income per share is computed based on the weighted average number of common shares outstanding. Diluted net income 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 ~~entered into~~could have repurchased from the proceeds from issuance of the potentially dilutive shares. For the purposes of the diluted earnings per share calculation, share options, warrants, time vested restricted stock, earnout shares and conversion of Fathom OpCo units are excluded from the calculation for the three and nine months ending September 30, 2022, as the inclusion would be anti-dilutive due the losses reported in the period.

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-average number of shares of Class A common stock outstanding the three and nine months ending September 30, 2022.

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


	Three Months Ended			Nine Months Ended
	September 30, 2022			September 30, 2022
	(Successor)			(Successor)
	Class A			Class A
Basic and Diluted Earnings Per Share:
Numerator
Net loss	$	(1,046,107	)	$	(994,295	)
Less: Net loss attributable to non-controlling interests		(556,027	)		(561,728	)
Net loss attributable to Class A common stock	$	(490,080	)	$	(432,567	)
Denominator
Weighted-average shares of Class A common stock outstanding-basic		62,816,174			55,348,018
Basic and Diluted Earnings Per Share	$	(7.80	)	$	(7.82	)

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 September 30, 2021. As a ~~definitive business combination agreement (the “Business Combination Agreement”), by~~result, basic and ~~among~~diluted earnings per units are the same as of September 30, 2021.

In the Predecessor Period, Fathom OpCo's Class A common units and Class B common units participated equally in Fathom OpCo's undistributed earnings. As such, Fathom OpCo’s undistributed earnings were allocated pro-rata to the Class A common units and Class B common units based on the weighted-average number of Class A common units and Class B common units outstanding as of September 30, 2021 such that earnings per unit for Class A common units and Class B common units are the same in each period.

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)


	Three Months Ended
	September 30, 2021 (Predecessor)			September 30, 2021 (Predecessor)
	Class A			Class B
Basic and Diluted Loss Per Unit:
Numerator
Net loss	$	(2,467	)	$	(1,009	)
Less: annual dividends on redeemable preferred units		(1,504	)		(615	)
Net loss attributable to common unitholders		(3,971	)		(1,624	)
Denominator
Weighted-average units used to compute basic earnings per unit		5,480,611			2,242,981
Basic and Diluted Loss Per Unit	$	(0.72	)	$	(0.72	)


	Nine Months Ended
	September 30, 2021 (Predecessor)			September 30, 2021 (Predecessor)
	Class A			Class B
Basic and Diluted Loss Per Unit:
Numerator
Net loss	$	(5,718	)	$	(2,340	)
Less: annual dividends on redeemable preferred units		(8,692	)		(3,557	)
Net loss attributable to common unitholders		(14,410	)		(5,897	)
Denominator
Weighted-average units used to compute basic earnings per unit		5,480,611			2,242,981
Basic and Diluted Loss Per Unit	$	(2.63	)	$	(2.63	)

Note 15. Shareholders' Equity, Non-controlling Interest, and Members' Equity

Successor

The Company’s equity consists of a total of 500,000,000 authorized shares across all classes of capital stock, which the Company ~~and Fathom Holdco, LLC~~has the authority to form "Fathom Digital Manufacturing Corporation" ("Fathom"), a publicly-traded industrial technology company that provides digital manufacturing services focused on prototype development and low volume production for blue chip corporate clients.

issue. The
500,000,000

Pursuant to the transaction, the Company will combine with Fathom at an estimated $1.5 billion pro forma equity value. Cash proceeds in connection with the transaction will be funded through a combination authorized shares consist of ~~the Company’s cash in its Trust Account and a $80 million fully committed, common~~10,000,000 authorized shares of preferred stock ~~private investment in common equity at $10.00 per share.~~

~~The transaction will be consummated subject to the deliverables and provisions as further described in the Business Combination Agreement.~~

~~NOTE 7. SHAREHOLDERS’ EQUITY~~

~~Preference Shares~~—~~The Company is authorized to issue 5,000,000 preference shares,~~ with a par value of ~~$0.0001~~$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~~300,000,000 authorized shares of ~~directors. As of September 30, 2021 and December 31, 2020, there were no preference shares issued or outstanding.~~

Class A ~~Ordinary Shares—The Company is authorized to issue 500,000,000 Class A Ordinary Shares,~~common stock with a par value of ~~$0.0001~~$0.0001 per ~~share. Holders~~share, 180,000,000 shares of the Class A Ordinary Shares are entitled to 1 vote for each Class A Ordinary Share. As of September 30, 2021, there were none issued and outstanding, excluding 34,500,000 Class A Ordinary Shares subject to possible redemption. As of December 31, 2020, there were no Class A Ordinary Shares issued or outstanding.

Class B ~~Ordinary Shares—The Company is authorized to issue 50,000,000 Class B Ordinary Shares,~~common stock with a par value of ~~$0.0001~~$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. ~~Holders~~

For the three months and nine months ended September 30, 2022, the Company' shareholders exchanged 3,861,589 and 14,141,920, respectively, of Fathom OpCo's exchangeable Class A Units (and the associated vote-only Class B shares) for an equal number of Class A shares. As a result of the ~~Class B Ordinary Shares are entitled~~exchange, the Company reallocated equity from noncontrolling interests to ~~1 vote~~the Company's additional paid-in-capital and recorded additional deferred tax assets and TRA liability in connection with the exchanges. See the consolidated statement of shareholders' equity and redeemable non-controlling interest for ~~each Class B Ordinary Shares.~~ these amounts.

As of September 30, 2022, the Company had no outstanding shares of Preferred Stock, 65,529,753 outstanding shares of Class A common stock, 70,153,051 outstanding shares of Class B common stock, and no 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.


	Three Months Ended			Nine Months Ended
	September 30, 2022			September 30, 2022
Fathom OpCo comprehensive loss	$	(1,070,703	)	$	(1,079,745	)
Non-controlling interest percentage		51.9	%		51.9	%
Comprehensive loss attributable to non-controlling interest	$	(556,027	)	$	(561,728	)

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 September 30, 2021 (Predecessor):


	September 30, 2021 (Predecessor)
Class A common units		5,480,611
Class B common units		2,242,981

Note 16. 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 consumer price indices ("CPI"). 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	September 30, 2022
Assets
Operating	Prepaid expenses and other current assets	$	356
Operating	Right-of-use operating lease assets, net		10,774
Financing	Right-of-use financing lease assets, net		2,308
Total lease assets		$	13,438
Liabilities
Current
Operating	Current operating lease liability	$	2,164
Financing	Current financing lease liability		195
Non-Current
Operating	Long-term operating lease liability		9,041
Financing	Long-term financing lease liability		2,176
Total lease liability		$	13,576

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

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


	Three Months Ended			Nine Months Ended
	September 30, 2022			September 30, 2022
Operating lease cost	$	837		$	2,457
Short-term lease cost		1			9
Financing lease cost:
Amortization of ROU assets		55			163
Interest on lease liabilities		34			103
Sublease income		(34	)		(102	)
Total lease costs	$	893		$	2,630


	September 30, 2022
Weighted-average remaining lease term (years)
Operating		6.7
Financing		8.4
Weighted-average discount rate
Operating		5.9	%
Financing		5.6	%

Maturities of Leases


	Operating Leases		Financing Leases		Total
Remainder of 2022	$	817	$	80	$	897
2023		2,566		326		2,892
2024		2,244		335		2,579
2025		1,859		345		2,204
2026		1,392		356		1,748
Thereafter		5,172		1,566		6,738
Total future lease payments		14,050		3,008		17,058
Less: Discount		2,845		637		3,482
Present value of lease liability	$	11,205	$	2,371	$	13,576

Disclosures related to period prior to adoption of the Topic 842

Operating lease rent expense was $951 for the three months ended September 30, 2021 and $2,608 for the nine months ended September 30, 2021.

As of December 31, ~~2020, there~~2021, future minimum lease payment obligations were ~~8,625,000 Class B ordinary shares issued and outstanding.~~as follows:


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

~~Only holders~~

Note 17. Tax Receivable Agreement

In connection with the Business Combination, Fathom entered into a Tax Receivable Agreement ("TRA") with certain owners of ~~the Class B Ordinary Shares will have the right to vote on the election of directors~~Fathom OpCo prior to the Business Combination. ~~Holders~~Pursuant to the TRA, the Company will pay certain of these parties, as applicable, 85% of the ~~Class A Ordinary Shares~~tax benefits, of any savings the company realizes, calculated using certain assumptions, as a result of (i) tax basis adjustments from sales and exchanges of Fathom OpCo's equity interests in connection with or following the Business Combination and certain distributions with respect to Fathom OpCo's equity interests, (ii) our utilization of certain tax attributes, and (iii) certain 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 ~~Class B Ordinary Shares~~actual amount and utilization of tax attributes, as well as the amount and timing of any payments under the TRA, will ~~vote together as~~vary depending upon a ~~single class~~number of factors, we expect that the payments that Fathom may make under the TRA will be substantial.

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

The Company’s TRA liability established upon completion of the Business Combination is measured at fair value on ~~all other matters submitted~~a recurring basis using significant unobservable inputs (Level 3). The TRA liability balance at September 30, 2022 assumes: (i) a constant blended U.S. federal, state and local income tax rate of 26.9%; (ii) no material changes in tax law; (iii) the ability to utilize tax attributes based on current alternative tax forecasts; and (iv) future payments under the TRA are made when due under the TRA. The amount of the expected future payments under the TRA has been discounted to its present value using a ~~vote~~discount rate of ~~shareholders, except as required by law. In connection with a~~12.2%.

Subsequent to the Business Combination, the Company ~~may enter into a shareholders agreement or other arrangements with~~will record additional liabilities under 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~~TRA when Class A ~~Ordinary Shares at the time~~Units of ~~a Business Combination, or earlier at the option of the holders thereof, at a ratio such that the number of the~~Fathom OpCo are exchanged for Class A ~~Ordinary Shares issuable upon conversion~~common stock. Liabilities resulting from these exchanges will be recorded on a gross undiscounted basis and are not remeasured at fair value. During the Successor nine months ended September 30, 2022, an additional TRA liability of ~~all~~$21,700 was established as a result of these exchanges.

The following table summarizes the ~~Founder Shares will equal,~~changes 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.

15TRA liabilities:


	Tax Receivable Agreement Liability
Beginning balance as of December 31, 2021	$	4,600
Fair value measurement		(200	)
Conversion of non-controlling interest		21,700
Ending Balance as of September 30, 2022		26,100
Less: Current portion included in other current liabilities		-
Total long-term tax receivable agreement liability	$	26,100

~~ALTIMAR ACQUISITION CORP. II~~

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

~~September 30, 2021~~

~~(Unaudited)~~

~~NOTE 8. WARRANT LIABILITY~~

As of September 30, 2021, there were 8,625,000 Public Warrants outstanding. As of December 31, 2020, there 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.

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.

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~~

•~~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.~~

Note 18. Fair Value Measurement

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;~~

~~ALTIMAR ACQUISITION CORP. II~~

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

~~September 30, 2021~~

~~(Unaudited)~~

•~~at a price of $0.10 per Warrant upon a minimum of 30 days’ prior written notice of redemption;~~ ~~provided, however~~, 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; and

•~~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 sends 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 September 30, 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.

~~NOTE 9. FAIR VALUE MEASUREMENTS~~

The fair value of the Company’s financial assets and liabilities reflects ~~the Company’s~~our 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

~~ALTIMAR ACQUISITION CORP. II~~

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

~~September 30, 2021~~

~~(Unaudited)~~

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 September 30, 2021, assets held in the Trust Account were comprised of $345,011,697 in money market funds, which are invested primarily in U.S. Treasury securities.~~

The following table presents information about the Company’s ~~assets and~~ liabilities that are measured at fair value on a recurring basis as of September 30, ~~2021~~2022.


	Fair Value Measurements as of September 30, 2022
Description	Level 1		Level 2		Level 3		Total
Liabilities:
Tax Receivable Agreement	$	-	$	-	$	4,400	$	4,400
Fathom OpCo acquisitions contingent consideration		-		-		700		700
Sponsor Earnout Shares Liability		-		-		1,790		1,790
Fathom Earnout Shares Liability		-		-		11,910		11,910
Warrant liability – Public Warrants		1,720		-		-		1,720
Warrant liability – Private Placement Warrants		-		-		4,180		4,180
	$	1,720	$	-	$	22,980	$	24,700

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

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
Payments		-			(2,750	)		-			-			-		$	(2,750	)
Net (gain) loss (1)		(200	)		(148	)		(7,590	)		(52,390	)		(22,120	)	$	(82,448	)
Ending balance at September 30, 2022	$	4,400		$	700		$	1,790		$	11,910		$	4,180		$	22,980

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

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

Tax Receivable Agreement

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 51.9%, initial amortization deductions of $56,400, $368,000 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 September 30, 2022 (Successor) of $2.03, volatility of 88.0%, correlation between taxable income and the Class A common stock price of 26.9%, a cost of equity of 16.4%, and a cost of debt range from 7.5% to 10.1%.

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.

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:~~

Description Level September 30, 2021
Assets:
Investments held in the Trust Account 1 345,011,697
Liabilities:
Warrant liability—Public Warrants 1 $ 9,070,433
Warrant liability—Private Placement Warrants 3 $ 10,572,537

Earnout Shares are an expected term of five years, a risk-free rate of 4.13%, operating asset volatility of 87.4%, and equity volatility of 100.2%. The ~~Warrants were accounted for as liabilities in accordance with ASC 815-40~~operating asset volatility and the equity volatility assumptions are ~~presented~~based on a blended average of operating and equity volatility, respectively, of publicly traded companies within ~~warrant liability in~~ the ~~accompanying condensed balance sheet.~~ Company's peer group.

Private Placement Warrants

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.

Fathom Digital Manufacturing Corporation
Notes to Unaudited Consolidated Financial Statements

(In thousands, except share amounts)

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~~measurement. The volatility for ~~which there~~the Private Placement warrants, a key input into the valuation, was estimated to be 25% based on a calibration to the publicly traded per share price of the 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 remain outstanding until maturity since the Private Placement warrants are uncertainties involved. If factors or assumptions change, the estimated fair values could be materially different. The Monte Carlo simulation model’s primary unobservable input utilized in determining thenot redeemable.

In instances whereby inputs used to measure fair value fall 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 ~~Warrants~~significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

Note 19. Income Taxes

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 loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. Income tax expense for the three months ending September 30, 2022 and September 30, 2021 was $87 and $729, respectively. Income tax expense for the nine months ending September 30, 2022 and September 30, 2021 was $167 and $807, respectively. The effective tax rate, including discrete items, was 0% for the periods ended September 30, 2022 and September 30, 2021. The tax provision for the three and nine months ended September 30, 2022 is impacted by certain permanent non-deductible portions of the goodwill impairment, partially offset by the valuation allowance recorded against the deferred tax assets.

The Company reduced its deferred tax liability by $12,219 and $17,700 for the three and nine months ended September 30, 2022, respectively, through additional paid in capital related to the exchange of Fathom OpCo's exchangeable Class A Units (and the associated vote-only Class B shares) for an equal number of Class A shares.

The Company evaluates the realizability of the deferred tax assets on a quarterly basis and has determined that it is appropriate to record a valuation allowance on any net deferred tax assets. The deferred tax liability recorded in previous periods has been fully offset due to the exchanges of Fathom OpCo Class A units as described above.

As of September 30, 2022, the Company did not recognize income tax expense or benefits associated with uncertain tax positions.

Note 20. Commitments and Contingencies

The Company is subject to various claims and lawsuits that arise in the ordinary course of business. It is the ~~expected volatility~~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.

Note 21. 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 ~~ordinary shares.~~following 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 ~~expected volatility as~~Company has determined that Fathom OpCo meets the definition of a VIE and that the ~~closing~~Company is the primary beneficiary of Fathom OpCo beginning on the 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 impliedBusiness Combination, and therefore the Company must consolidate Fathom OpCo from the ~~Company’s own public warrant pricing. A Monte Carlo simulation methodology was used in estimating the fair value~~date 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. The Public Warrants have detached from the Units and the Public Warrants were moved from Level 3 to Level 1. For periods subsequent to the detachment, the closing price of the Public Warrants will be used as the fair value as of each relevant date.

Business Combination.

~~The following table provides quantitative information regarding Level 3 fair value measurements:~~


	~~As of September 30, 2021~~
~~Stock price~~	$	~~9.85~~
~~Strike price~~	$	~~11.50~~
~~Term (in years)~~	~~5.0~~
~~Volatility~~	~~16.5~~		%
~~Risk-free rate~~	~~1.00~~		%
~~Dividend yield~~	~~0.0~~		%

~~ALTIMAR ACQUISITION CORP. II~~

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

~~September 30, 2021~~

~~(Unaudited)~~

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:~~

Private
Placement Warrants Public Warrants Warrant Liabilities
Fair value as of February 9, 2021 $ 17,144,332 $ 12,933,516 $ 30,077,848
Change in valuation inputs or other assumptions (3,784,363) (2,932,167) (6,716,530)
Fair value of Warrants transferred out of Level 3 — (10,001,349) (10,001,349)
Fair value of Level 3 warrant liabilities as of June 30, 2021 $ 13,359,969 $ — $ 13,359,969
Change in valuation inputs or other assumptions $ (2,787,432) $ — $ (2,787,432)
Fair value of Level 3 Warrant Liabilities as of September 30, 2021 $ 10,572,537 $ — $ 10,572,537

Fathom OpCo.

~~NOTE 10. 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.


	Period Ended September 30, 2022 Fathom OpCo Standalone
Total assets	$	495,392
Total liabilities		184,396
Total shareholders' equity		310,996

~~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 and ~~the~~ notes thereto ~~contained elsewhere~~included in Part I, Item 1 of this ~~Amended~~ Quarterly Report, ~~on Form 10-Q. Certain information contained in the discussion and analysis~~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 Amended 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.~~

~~Overview~~

Fathom Digital Manufacturing Corporation and its consolidated subsidiaries.

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 of the Predecessor 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,~~Business Combination.

In connection with the Business Combination, we entered into a Tax Receivable Agreement (“TRA”) with certain of our pre-Business Combination owners that provides for the payment by Fathom to such owners of 85% of the benefits that Fathom is deemed to realize as a result of the Company’s share ~~capital, debt or~~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 ~~combination of cash, share capital and debt.~~

Public Company

We expect to continue to incur additional costs associated with operating as a public company, 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 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 ~~costs~~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 2021 Form 10-K.

Manufacturing Facilities and Capacity

We believe our combined facilities are adequate for our development and production needs in the ~~pursuit of a Business Combination. We cannot assure you that~~near future. Should we need to add space or transition into new facilities, we believe we have the ability to expand our ~~plans to complete a Business Combination will be successful.~~

footprint on commercially reasonable terms.

~~Recent Developments~~

~~On July 15, 2021, the Company entered into a definitive business combination agreement (as it may be amended, restated, amended and restated or otherwise supplemented from time to time, the “Business Combination Agreement”), dated as of July 15, 2021, by and among the Company, Fathom Holdco, LLC, a Delaware limited liability company (“Fathom OpCo”), Rapid Merger Sub, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary~~Impacts of the ~~Company, and the other parties thereto, a copy of which is filed as Exhibit 2.1 and incorporated herein by reference.~~ COVID-19 pandemic

The ~~combined company will be known as Fathom Digital Manufacturing Corporation (“Fathom”).~~

~~Upon consummation~~full extent of the ~~transactions contemplated~~impact and effects of the COVID-19 pandemic will depend on future developments, including, among other factors, the duration, spread and resurgences of the virus, including variants thereof, along with related travel advisories and restrictions, the recovery time of the disrupted supply chains and industries, the impact of labor market interruptions, the impact of government interventions, the pace, scope and efficacy of vaccination and booster programs, and general uncertainty as to the impact of COVID-19, including variants and resurgences, on the global economy.

Further discussion of the potential impacts on our business and results of operations from the COVID-19 pandemic is provided in the section entitled “Risk Factors” in Part I, Item 1A of our 2021 Form 10-K.

Comparison of the three months ended September 30, 2022 and September 30, 2021


	Three Months Ended						Change
(dollars in thousands)	September 30, 2022 (Successor)			September 30, 2021 (Predecessor)			$			%

Revenue	$	40,210		$	41,481		$	(1,271	)		-3.1	%
Cost of revenue		25,144			26,581			(1,437	)		-5.4	%
Gross profit		15,066			14,900			166			1.1	%
Operating expenses
Selling, general, and administrative		11,960			10,681			1,279			12.0	%
Depreciation and amortization		4,627			2,148			2,479			115.4	%
Restructuring		996			-			996
Goodwill Impairment		1,066,564			-			1,066,564
Total operating expenses		1,084,147			12,829			1,071,318			8350.8	%
Operating (loss) income		(1,069,081	)		2,071			(1,071,152	)		-51721.5	%
Interest expense and other (income) expense
Interest expense		2,406			4,376			(1,970	)		-45.0	%
Other expense		81			592			(511	)		-86.3	%
Other income		(25,548	)		(150	)		(25,398	)		16932.0	%
Total interest expense and other (income) expense, net		(23,061	)		4,818			(27,879	)		-578.6	%
Net loss before income tax		(1,046,020	)		(2,747	)		(1,043,273	)		37978.6	%
Income tax expense		87			729			(642	)		-88.1	%
Net loss		(1,046,107	)		(3,476	)		(1,042,631	)		29995.1	%
Net loss attributable to Fathom OpCo non-controlling interest		(556,027	)		-			(556,027	)
Net loss attributable to controlling interest		(490,080	)		(3,476	)		(486,604	)		13999.0	%
Comprehensive loss:
Income from foreign currency translation adjustments		-			201			(201	)		-100.0	%
Comprehensive loss, net of tax	$	(490,080	)	$	(3,275	)	$	(486,805	)		14864.3	%

Revenue

Revenue for the three months ended September 30, 2022 was $40,210 compared to $41,481 in the three months ended September 30, 2021, a decrease of 3.10%. The year-over-year decrease was primarily due to one-time COVID-19 deferred orders in our injection molding technology during the three months ended September 30, 2021.

Gross Profit

Gross profit for the three months ended September 30, 2022 totaled $15,066 or 37.5% of revenue, compared to $14,900 or 35.9% of revenue, for the three months ended September 30, 2021, primarily driven by favorable pricing on materials.

Operating Expenses

Selling, general and administrative (SG&A) expenses were $11,960 and $10,681 for the three months ended September 30, 2022 and September 30, 2021, respectively. The $1,279, or 12.0%, increase in SG&A expenses was primarily driven by stock based compensation of $1,762 in the three months ended September 30, 2022 and by additional costs related to being a public company.

Depreciation and amortization expenses were $4,627 and $2,148 for the three months ended September 30, 2022 and September 30, 2021, respectively. The increase of $2,479 or 115.4%, was primarily driven by an increase in intangible assets related to the Business Combination ~~Agreement, including, among other things,~~resulting in amortization expenses associated with those assets.

Restructurings of $996 represents costs to consolidate our Oakland, CA facility into Fathom headquarters in Hartland, WI, facility, transition finance to a shared-service model, and consolidated a limited number of leadership roles, as announced in our reorganization plan on July 7, 2022. There were no restructuring charges for the ~~domestication~~three months ended September 30, 2021.

The goodwill impairment charge of $1,066,564 during the three months ended September 30, 2022, represents a write down of the ~~Company, the combined company, will be organized in an “Up-C” structure, in which substantially all~~carrying amount of ~~the assets and business of the combined company will be held by Fathom OpCo. The combined company’s business will continue to operate through Fathom OpCo.~~

~~Pursuant to the transactions contemplated by the Business Combination Agreement, the Company will combine with Fathom OpCo at an estimated $1.5 billion pro forma equity value.~~ ~~Merger consideration will consist of both shares of Fathom Class A common stock and cash consideration.Cash consideration will be funded through~~goodwill based on a ~~combination of the Company’s cash in its Trust Account and a $80 million fully committed, common stock private investment in common equity at $10.00 per share.~~

The Company’s proposed business combination with Fathom OpCo is expected to close in the fourth quarter of 2021, subject to customary closing conditions as further described in the Business Combination Agreement.

~~Restatement of Previously Issued Financial Statements~~

During the preparation of the Company's unaudited interim condensed financial statements as of September 30, 2021, management determined it should restate its previously reported condensed financial statements for the Affected Periods. Management previously determined the Class A Ordinary Shares subject to possible redemption to be equal to the redemption value of $10.00 per Class A Ordinary Shares while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management subsequently determined that the Class A Ordinary Shares issued in connection with the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company's control. Therefore, management concluded that the redemption value should include all the Class A Ordinary Shares subject to possible redemption, resulting in the Class A Ordinary Shares subject to possible redemption being equal to their redemption value. As a result, management has noted a reclassification adjustment related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the Class A Ordinary Shares subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and the Class A Ordinary Shares.

In connection with the change in presentation for the Class A Ordinary Shares subject to possible redemption, the Company also restated its earnings per share calculation to allocate net income (loss) pro rata to Class A and Class B Ordinary Shares. The presentation contemplates a Business Combination as the most likely outcome, in which case, both the Class A Ordinary Shares and the Class B Ordinary Shares share pro rata in the income (loss) of the Company.

~~There has been no change~~decrease in the Company's ~~total assets, liabilities or operating results.~~

~~Results of Operations~~

~~We have neither engaged~~fair value based upon a quantitative assessment as noted in ~~any operations nor generated any revenues through~~footnote 8. There was no goodwill impairment charge recorded during the three months ended September 30, 2021. ~~All activity~~

Operating Income (Loss)

Operating loss was $1,069,081 for the ~~period from December 7, 2020 (inception) through~~three months ended September 30, ~~2021 were organizational activities, those necessary to prepare~~2022 and operating income was $2,071 for the ~~Initial Public Offering as described below and, subsequent~~three months ended September 30, 2021. The additional losses were primarily driven by the goodwill impairment charge, restructuring costs, additional costs related to the closing of the Initial Public Offering, identifying a target company for a Business Combination, and activities in connection with the proposed business combination with Fathom Holdco, LLC. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on investments held in the Trust Account. We incur expenses as a result of being a public company, ~~(for legal, financial reporting, accounting~~ and ~~auditing compliance),~~additional amortization of the increased intangible assets related to the Business Combination.

Interest Expense and Other Expense (Income)

Interest expense was $2,406 and $4,376 for the three months ended September 30, 2022 and September 30, 2021, respectively. The decrease in interest expense is primarily due to lower debt at September 30, 2022 as ~~well as~~compared to September 30, 2021 and lower interest rates under the New Credit Agreement.

Other expenses were $81 and $592 for the three months ended September 30, 2022 and September 30, 2021, respectively. The decrease in other expenses of $511 is due ~~diligence expenses.~~

to fewer non-operating expenses in the business for the three months ended September 30, 2022.

Other income was $25,548 and $150 for the three months ended September 30, 2022 and September 30, 2021, respectively. The increase in other income of $25,633 represents the changes in fair value in the earnout share liabilities and the warrant liability during the three months ended September 30, 2022 of $18,080 and $7,400, respectively.

Income Taxes

We recorded income tax expense of $87 and $729 for the three months ending September 30, 2022 and September 30, 2021, respectively. For the three months ended September 30, 2022 the tax benefit was impacted by permanent difference with respect to gains and losses recorded on the Fathom earnout shares liability, sponsor earnout shares liability, and warrant liabilities. During the 2021 ~~we had~~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 ~~net~~result, deferred tax liabilities pertaining to the corporate subsidiaries were reversed as income ~~of $2,602,517, which consists~~tax benefits during the 2021 Predecessor Period.

Comparison of the ~~decrease~~nine months ended September 30, 2022 and September 30, 2021


	Nine Months Ended						Change
(dollars in thousands)	September 30, 2022 (Successor)			September 30, 2021 (Predecessor)			$			%

Revenue	$	122,737		$	107,887		$	14,850			13.8	%
Cost of revenue		80,126			66,080			14,046			21.3	%
Gross profit		42,611			41,807			804			1.9	%
Operating expenses
Selling, general, and administrative		38,341			27,111			11,230			41.4	%
Depreciation and amortization		13,595			7,355			6,240			84.8	%
Restructuring		996			-			996
Goodwill Impairment		1,066,564			-			1,066,564
Total operating expenses		1,119,496			34,466			1,085,030			3148.1	%
Operating (loss) income		(1,076,885	)		7,341			(1,084,226	)		-14769.5	%
Interest expense and other (income) expense
Interest expense		5,738			8,800			(3,062	)		-34.8	%
Other expense		276			9,007			(8,731	)		-96.9	%
Other income		(88,771	)		(3,215	)		(85,556	)		2661.2	%
Total interest expense and other (income) expense, net		(82,757	)		14,592			(97,349	)		-667.1	%
Net loss before income tax		(994,128	)	$	(7,251	)	$	(986,877	)		13610.2	%
Income tax expense		167			807			(640	)		-79.3	%
Net loss		(994,295	)	$	(8,058	)	$	(986,237	)		12239.2	%
Net loss attributable to Fathom OpCo non-controlling interest		(561,728	)		-			(561,728	)
Net loss attributable to controlling interest		(432,567	)		(8,058	)		(424,509	)		5268.2	%
Comprehensive loss:
(Loss) Income from foreign currency translation adjustments		(107	)		96			(203	)		-211.5	%
Comprehensive loss, net of tax	$	(432,674	)	$	(7,962	)	$	(424,712	)		5334.2	%

Revenue

Revenue for the nine months ended September 30, 2022 was $122,737 compared to $107,887 in ~~the fair value of warrant liability of $3,718,348, operating costs of $1,121,132, and interest income on investments held in the Trust Account of $5,301.~~

~~For~~ the nine months ended September 30, 2021, ~~we had~~an increase of 13.8%. 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 nine months ended September 30, 2022 totaled $42,611, or 34.7% of revenue, compared to $41,807, or 38.8% of revenue, for the nine months ended September 30, 2021. The decrease in gross profit is primarily driven by an increase of $3,241 in amortization expense related to inventory step-up adjustments from purchase accounting following the completion of the Business Combination on December 23, 2021.

Operating Expenses

SG&A expenses were $38,341 and $27,111 for the nine months ended September 30, 2022 and September 30, 2021, respectively. The $11,230, or 41.4%, increase in SG&A expenses was primarily driven by stock based compensation of $5,687 in the nine months ended September 30, 2022 and by additional costs related to being a ~~net income~~public company.

Depreciation and amortization expenses were $13,595 and $7,355 for the nine months ended September 30, 2022 and September 30, 2021, respectively. The increase of ~~$755,552, which consists of operating costs of $1,691,620 and transaction costs allocated~~$6,240 or 84.8%, was primarily driven by an increase in intangible assets related to the ~~Warrants~~Business Combination resulting in amortization expenses associated with those assets.

Restructuring of ~~$755,071, offset by~~$996 represents costs to consolidate our Oakland, CA facility into Fathom headquarters in Hartland, WI, facility transition finance to a shared-service model, and consolidated a limited number of leadership roles, as announced in our reorganization plan on July 7, 2022. There were no restructuring charges for the nine months ended September 30, 2021.

The goodwill impairment charge of $1,066,564 during the nine months ended September 30, 2022,represents a write down of the carrying amount of goodwill based on a decrease in the Company's fair value based upon a quantitative assessment as noted in footnote 8. There was no goodwill impairment charge recorded during the nine months ended September 30, 2021.

Operating Income (Loss)

Operating loss was $1,076,885 for the nine months ended September 30, 2022 and operating income was $7,341 for the nine months ended September 30, 2021. The operating loss was primarily driven by the goodwill impairment charge, restructuring costs, additional costs related to related to being a public company, non-cash amortization of the increased intangible assets relating to the Business Combination, inventory step-up from purchase accounting, professional fees, and additional employees.

Interest Expense and Other Expense (Income)

Interest expense was $5,738 and $8,800 for the nine months ended September 30, 2022 and September 30, 2021, respectively. The decrease in interest expense is primarily due to lower debt at September 30, 2022 as compared to September 30, 2021 and lower interest rates under the New Credit Agreement.

Other expenses were $276 and $9,007 for the nine months ended September 30, 2022 and September 30, 2021, respectively. The decrease in other expenses of $7,760 is due to non-recurring expenses related to the Summit acquisition that took place in the nine month period ending June 30, 2021.

Other income was $88,771 and $3,215 for the nine months ended September 30, 2022 and September 30, 2021, respectively. The increase in other income of $85,556 represents the changes in fair value in the earnout share liabilities and the warrant liability during the nine months ended September 30, 2022 of $59,980 and $28,000, respectively.

Income Taxes

We recorded income tax expense of $167 and $807 for the nine months ending September 30, 2022 and September 30, 2021, respectively. For the three months ended September 30, 2022 the tax provision was impacted by permanent difference with respect to gains and losses recorded on the Fathom earnout shares liability, sponsor earnout shares liability, and warrant liabilities. The tax benefit was further impacted by discrete impacts related to the impairment of goodwill. 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 use to supplement our results presented in accordance with 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 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, 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 Net Income (Loss) and Adjusted EBITDA exclude certain expenses that are required in accordance with 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 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 GAAP measure, for the periods indicated:


	Three Months Ended						Nine Months Ended
(dollars in thousands)	September 30, 2022 (Successor)			September 30, 2021 (Predecessor)			September 30, 2022 (Successor)			September 30, 2021 (Predecessor)
Net (loss)	$	(1,046,107	)	$	(3,476	)	$	(994,295	)	$	(8,058	)
Acquisition expenses(1)		-			-			-			4,045
Stock compensation		1,762			-			5,687			-
Inventory step-up amortization		-			(277	)		3,241			-
Goodwill Impairment		1,066,564						1,066,564
Restructuring		996						996
Change in fair value of warrant liability(2)		(7,400	)		-			(28,000	)		-
Change in fair value of Earnout Shares liability(2)		(18,080	)		-			(59,980	)		-
Change in fair value of TRA(2)		-			-			(200	)		-
Integration, non-recurring, non-operating, cash, and non-cash costs(3)		492			2,679			3,443			5,309
Adjusted Net Income (Loss)	$	(1,773	)	$	(1,074	)	$	(2,544	)	$	1,296

(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 Shares liability, and the Warrant liability associated with the Business Combination; and

(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 ~~$3,190,546 and~~ interest income ~~on investments 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 ~~$11,697.~~

the Company's warrants and earnout shares, and certain other non-cash and non-core items, as described in the reconciliation included below.

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


	Three Months Ended						Nine Months Ended
(dollars in thousands)	September 30, 2022 (Successor)			September 30, 2021 (Predecessor)			September 30, 2022 (Successor)			September 30, 2021 (Predecessor)
Net (loss)	$	(1,046,107	)	$	(3,476	)	$	(994,295	)	$	(8,058	)
Depreciation and amortization		6,335			4,381			18,539			12,006
Interest expense, net		2,406			4,376			5,738			8,800
Income tax expense		88			729			167			807
Acquisition expenses(1)		-			-			-			4,045
Inventory step-up amortization		-			(277	)		3,241			-
Stock compensation		1,762			-			5,687			-
Goodwill Impairment		1,066,564			-			1,066,564			-
Restructuring		996						996
Change in fair value of warrant liability(2)		(7,400	)		-			(28,000	)		-
Change in fair value of Earnout Shares liability(2)		(18,080	)		-			(59,980	)		-
Change in fair value of TRA(2)		-			-			(200	)		-
Contingent consideration		-			235			-			(1,120	)
Loss on extinguishment of debt		-			-			-			2,031
Integration, non-recurring, non-operating, cash, and non-cash costs(3)		492			2,679			3,443			5,309
Adjusted EBITDA	$	7,056		$	8,647		$	21,900		$	23,820

(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; and

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 September 30, 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 $8,004 in cash as of September 30, 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 6.9% 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 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 $27,000 at September 30, 2022. The loans obtained under the New Credit Agreement will mature in December 2026.

On November 10, 2022, the Company entered into an amendment (the “Amendment”) of ~~34,500,000 Units at $10.00~~the New Credit Agreement (as amended by the Amendment, the “Amended Credit Agreement) with the administrative agent thereof (the “Administrative Agent”) and the other lenders party thereto to modify certain financial covenants. Specifically, the Amendment (i) reduced the minimum interest coverage ratio from 3.00 to 1.0 to 2.50 to 1.0 for each fiscal quarter ending in fiscal 2023, to 2.75 to 1.0 for the fiscal quarters ending on March 31, 2024 and June 30, 2024, with the minimum interest coverage ratio reverting back to 3.00 to 1.0 for each fiscal quarter ending on and after September 30, 2024, (ii) increased the maximum net leverage ratio to 4.50 to 1.0 for each fiscal quarter ending on September 30, 2022 through June 30, 2023, which ratio will decrease thereafter over time until it reaches 3.50 to 1.0 for each fiscal quarter ending on and after June 30, 2024, and (iii) prohibits certain restricted payments by the Company otherwise permitted by Section 6.06(g) of the Amended Credit Agreement through September 30, 2024.

The Amendment also replaces the Adjusted LIBO Rate (e.g., LIBO Rate multiplied by the then applicable statutory reserve rate per ~~Unit, generating gross proceeds~~annum), plus a range of ~~$345,000,000~~applicable margins, as ~~described~~an interest election under the Amended Credit Agreement, with Term SOFR plus 0.10% (“Adjusted Term SOFR”) per annum and Daily Simple SOFR plus 0.10% per annum, as applicable, in ~~Note 3~~each case plus an applicable margin adjustment ranging from 2.25% to 3.75% based on the Company’s most recent net leverage ratio calculation as of the applicable interest determination date.

In addition, the Amendment replaces the Adjusted LIBO Rate plus 1.00% per annum as one of the interest rate floors applied in determining the alternate base interest rate for ABR Loans (as defined in the Amended Credit Agreement), with Adjusted Term SOFR plus 1.00% per annum. Lastly, the Amendment provides that the applicable margin applicable to ABR Loans increase to 2.75% to the ~~condensed financial statements. Simultaneously~~extent the Company’s net leverage ratio equals or exceeds 4.00 to 1.0 on the applicable date.

In connection with the ~~closing~~preparation and execution of the ~~Initial Public Offering,~~Amendment, the Company paid customary arranger and lender consent fees, and reasonable and documented expenses of the Administrative Agent.

The foregoing description of the Amendment and the Amended Credit Agreement is a summary and is qualified in its entirety by reference to the full text of the Amendment and the Amended Credit Agreement, which is attached to this Quarterly Report as Exhibit 10.1 and incorporated herein by reference.

The Company recorded deferred financing costs of $69 and $299, respectively for the three and nine months ended September 30, 2022 in conjunction with the New Credit Agreement and the applicable principal balances are presented within Long-Term debt, net on the Company's Consolidated Balance Sheets. The Company amortizes the deferred financing costs using the effective interest method.

The revolving credit facility under the Amended 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 Amended Credit Agreement also includes an uncommitted incremental facility, which, subject to certain conditions, provides for additional term loan facilities, 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 ~~consummated~~entered into the ~~sale~~TRA with certain of ~~9,900,000 Private Placement Warrants at~~our pre-Business Combination owners that provides for the payment by Fathom to such owners of 85% of the benefits that Fathom is deemed to realize as a result of the 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 actual amount and utilization of tax attributes, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, we expect that the payments that Fathom may make under the TRA will be approximately $98,000 based on the Company's closing share price of ~~$1.00 per Private Placement Warrant~~$2.03 at September 30, 2022. As of September 30, 2022, we do not expect to make any material payments within the next two years and anticipate payments to become more material beginning in ~~a private placement transaction to~~2024.

Cash Flow Analysis


	Nine Months Ended
(dollars in thousands)	September 30, 2022 (Successor)			September 30, 2021 (Predecessor)
Net cash provided by (used in) :
Operating Activities	$	6,496		$	1,737
Investing Activities		(10,953	)		(74,076	)
Financing Activities		(7,896	)		74,682
Net Change in Cash and Cash Equivalents	$	(12,353	)	$	2,343

Operating Activities

Net cash provided from operating activities was $6,496 and $1,737 for the ~~Sponsor, generating gross proceeds~~nine months ended September 30, 2022 and September 30, 2021, respectively. The increase of ~~$9,900,000 as described~~$4,759 is primarily driven by increased revenue.

Investing Activities

Cash used in ~~Note 4 to~~investing activities of $10,953 for the ~~condensed financial statements.~~

~~Following the Initial Public Offering, the full exercise~~nine months ended September 30, 2022 represents capital expenditures. Cash used in investing activities of the over-allotment option and the sale of the Private Placement Warrants, a total of $345,000,000 was placed in the Trust Account. We incurred $19,490,958 in costs related to the Initial Public Offering, consisting of $6,900,000 of underwriting fees, $12,075,000 of deferred underwriting fees and $515,958 of other offering costs.

~~For~~$74,076 for the nine months ended September 30, 2021 represents the cash used in ~~operating activities was $2,176,537. Net income~~the acquisitions of ~~$755,552 was affected by a decrease~~Summit Tooling Inc., and Summit Plastics, LLC, Precision Process Corp., Centex Machine and Welding, Inc. and Laser Manufacturing, Inc., and Sureshot Precision, LLC of $67,428 in the ~~fair value~~aggregate and capital expenditures of ~~warrant liability~~$6,648.

Financing Activities

Cash used in financing activities of ~~$(755,071), transaction costs allocated~~$7,896 for the nine months ended September 30, 2022 was due to payments made on the ~~Warrants~~term loan of ~~$(3,190,546)~~$2,344, contingent consideration of $2,750, and ~~interest earned on investments~~tax payments for shares held in lieu of taxes of $2,566. Cash provided by financing activities of $74,682 for the ~~Trust Account of $11,697. Changes in operating assets and liabilities used $484,917 of cash for operating activities.~~

~~As of~~nine months ended September 30, 2021 ~~we had investments held in~~was primarily due to debt proceeds of $183,500 for the ~~Trust Account~~acquisitions, partially offset by payments on debt of ~~$345,011,697 (including $11,697~~$104,091.

Critical Accounting Policies and Use of interest income) consisting of money market funds, which are invested primarily in 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.

As of September 30, 2021, we had cash of $331,112 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 is 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 consummationEstimates

Preparation 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 September 30, 2021. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities or purchased any non-financial assets.

~~Contractual Obligations~~

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of 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 ~~our~~ management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. 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 atin 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 ~~date~~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 ~~condensed financial statements,~~underlying business activity change compared with the assumptions and ~~income~~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 ~~during the periods reported. Actual results~~could be accelerated or slowed, which could materially ~~differ from those estimates. We have identified the critical accounting policies set forth below.~~

impact our results of operations.

Goodwill and Intangible Assets

~~Warrant Liability~~

We ~~account~~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 ~~the Warrants as either equity-classified or liability-classified instruments based on an assessment of the Warrants’ specific terms and applicable authoritative guidance~~impairment annually in the ~~FASB ASC Topic 480, “Distinguishing Liabilities from Equity~~,”fourth quarter of each year and ~~ASC Topic 815, “Derivatives and Hedging.” The assessment considers whether~~is tested for impairment between annual tests whenever events or changes in circumstances indicate that the ~~Warrants~~carrying value of goodwill may not be recoverable. In addition, an impairment evaluation of our amortizable intangible assets may also be performed if events or circumstances indicate potential impairment. Among the factors that could trigger an impairment review 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 requirescurrent operating results that do not align with our annual plan or historical performance; changes in our strategic plans or the use of ~~professional judgment,~~our assets; restructuring charges or other changes in our business segments; competitive pressures and changes in the general economy or in the markets in which we operate; and a significant decline in our stock price and our market capitalization relative to our net book value. An impairment charge for goodwill is ~~conducted at~~recognized only when 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 initialestimated fair value onof a reporting unit, including goodwill, is less than its carrying amount. As of September 30, 2022, a quantitative interim goodwill impairment assessment was performed due to further sustained declines in the ~~date of issuance and each balance sheet date thereafter. Changes~~Company’s stock price in the three months ended September 30, 2022. The Company determined that the estimated fair value of the ~~warrants are recognized as~~reporting unit was less than its carrying amount. The Company recorded a ~~non-cash gain or loss on~~goodwill impairment charge of $1,066,564 in the unaudited consolidated statements of ~~operations. The fair value~~comprehensive loss for the three and nine months ended September 30, 2022.

Evaluating the recoverability of goodwill requires judgments and assumptions regarding future trends and events. As a result, both the ~~Public Warrants was determined using~~precision and reliability of our estimates are subject to uncertainty. Among the ~~closing price of the Public Warrants,~~factors that we consider in our qualitative assessment are general economic conditions and the competitive environment; actual and projected reporting unit financial performance; forward-looking business measurements; and external market assessments. To determine the fair ~~value~~values of our reporting unit for a quantitative analysis, we typically utilize detailed financial projections, which include significant variables, such as projected rates of revenue growth, profitability and cash flows, as well as assumptions regarding discount rates, the ~~Private Placement Warrants was estimated using a Monte Carlo simulation approach.~~

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

Company’s weighted average cost of capital and other data.

We ~~account for the Class A Ordinary Shares subject to possible redemption~~recognize amortizable intangibles assets in accordance with ~~the guidance in~~ ASC ~~Topic 480, “Distinguishing Liabilities from Equity.” Class A Ordinary Shares~~350. Acquired intangible assets subject to ~~mandatory redemption~~amortization are ~~classified as a liability instrument~~stated at cost and are ~~measured at fair value. Conditionally redeemable Class A Ordinary Shares (including Class A Ordinary Shares that feature redemption rights~~amortized using the straight-line method over the estimated useful lives of the assets. Intangible assets that are ~~either within~~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 September 30, 2022 and September 30, 2021, no impairment charges for amortizable intangible assets have been recognized.

The estimates of fair value are based on the ~~control~~best information available as of the ~~holder or subject~~date of the assessment, which primarily incorporates management assumptions about expected future cash flows. Although our amortizable intangible assets are not currently impaired, there can be no assurance that future impairments will not occur. See Note 3—Business Combination with Fathom OpCo, and Note 8—Goodwill and Intangible Assets, net in the accompanying notes 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 outsideunaudited consolidated financial statements for more information.

Revenue Recognition from Contracts with Customers

Most of the Company’s ~~control~~revenue has one performance obligation 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~~is recognized on a point-in-time basis upon shipment. The majority of the ~~shareholders’ equity section of our condensed balance sheets.~~

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

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 standalone selling price based on the price charged to customers. The ~~Company has two classes of ordinary shares,~~Company’s payments terms are consistent with industry standards and never exceed 12 months.

Contingent Liabilities

Our contingent liabilities, which are ~~referred~~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 ~~as Class A Ordinary Shares~~the probability and Class B Ordinary Shares. Income and losses are shared pro rata between the two classes of ordinary shares. 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 effectestimation of the ~~Public Warrants issued in connection with~~amount of liability. These contingencies include, but may not be limited to, the ~~Initial Public Offering~~warrants, TRA liabilities, earnout shares, litigation, and management’s evaluation of complex laws and regulations, including those relating to indirect taxes, and the ~~sale~~extent to which they may apply to our business and industry. See Note 18 —Fair Value Measurement and Note 20 — Commitments and Contingencies in the accompanying notes to our unaudited consolidated financial statements for more information.

We regularly review our contingencies to determine whether the likelihood of a liability is probable and to assess whether a reasonable estimate of the ~~Private Placement Warrants, because~~liability can be made. Determination of whether a liability estimate can be made is a complex undertaking that considers the ~~exercise~~judgement of management, third-party research, the prospect of negotiation and interpretations by regulators and courts, among other information. When liabilities can be reasonably estimated, an estimated contingent liability is recorded. We continually reevaluate our indirect tax and other positions for appropriateness.

Earnout Shares Liabilities and Warrant Liability

The fair values of the ~~warrants is contingent upon~~Sponsor earnout shares liability, Fathom earnout shares liability, and Warrants liability were determined using Monte Carlo simulations that have various significant unobservable inputs. The assumptions used could have a material impact on the ~~occurrence~~valuation of ~~future events.~~

these liabilities, and include our best estimate of expected volatility, expected holding periods and appropriate discounts for lack of marketability. Changes in the estimated fair 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 period in which the changes occur. See Note 3 —Business Combination with Fathom OpCo and Note 10 —Warrant Liability in 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 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 which the company adopted in the first quarter of 2022. See Note 2 —Basis of Presentation and Note 16 —Leases in the accompanying notes to our unaudited consolidated financial statements for more information.

Emerging Growth Company Accounting 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 ~~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,” which simplifies~~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 condensed 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.~~

~~Item~~used.

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 4.7A. "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. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

~~Disclosure~~

We maintain disclosure controls ~~are~~and procedures that are designed ~~with the objective of ensuring~~to ensure that information required to be disclosed in our reports filed ~~under~~pursuant to the Exchange Act is ~~recorded, processed, summarized,~~properly and timely reported ~~within the time period specified in the SEC's rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated~~ and communicated to our management, including ~~the chief executive officer~~our Chief Executive Officer and ~~chief financial officer,~~Chief Financial Officer, as appropriate, to allow timely decisions regarding required ~~disclosures. Under the supervision~~disclosure.

As reported in “Item 4. Controls and ~~with the participation~~Procedures” of our Annual Report on Form 10-K for the year ended December 31, 2021, management ~~including our principal executive officer and principal financial and accounting officer, we conducted an~~performed its evaluation of the effectiveness of our disclosure controls and procedures as of ~~the end of the fiscal quarter ended September 30, 2021, as such term is defined in Rules 13a-15(e)~~December 31, 2021. Based upon that evaluation, our Chief Executive Officer and ~~15d-15(e) promulgated under the Exchange Act. Based on this evaluation, the Company’s principal executive officer and principal financial officer have~~Chief Financial Officer concluded that, due to the events that led to the Company’s restatement of its Post-Initial Public Offering Balance Sheet and its unaudited interim condensed financial statements for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021 (collectively, the “Restatement”) to properly account for the Class A Ordinary Shares subject to possible redemption as described in Note 1A to the unaudited interim condensed financial statements, a material weakness existed and the Company’s disclosure controls and procedures were not effective.

~~Changes in Internal Control over Financial Reporting~~

There was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) an 15d-15(f) of the Exchange Act) that occurred during the three months ended September 30, 2021 covered by this Amended Quarterly Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. In light of the material weakness identified and the related Restatement described in Note 1A to the unaudited interim 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.~~

~~Except as set forth below,~~ as of the date of this Amended Quarterly Report, there have been no material changes with respect to those risk factors previously disclosed in the Registration Statement and the quarterly report for the fiscal quarter ending MarchDecember 31, 2021, (the “March 2021 Quarterly Report"). 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.

~~In connection with the Restatement, our management has concluded that~~ our disclosure controls and procedures were ~~not effective as of September 30, 2021 due to a material weakness in internal control over financial reporting related~~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 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 formal policies, procedures and controls has not been fully designed or implemented to 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 ~~a portion of our Class A Ordinary Shares as permanent equity. If we are unable to~~accounts and disclosures in the financial statements; and

•

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.

As described elsewhere in this Amended Quarterly Report, subsequent to the original issuance of the Company’s unaudited interim condensed financial statements as of and for the three and nine months ended September 30, 2021, the Company identified an error in its previously issued financial statements for the Affected Periods: that a portion of its Class A Ordinary Shares were incorrectly classified as permanent equity to maintain stockholders’ equity greater than $5,000,000 on the basis that the Company will consummate its initial Business Combination only if the Company has net tangible assets of at least $5,000,001.

However, management recently re-evaluated the Company’s application of ASC 480-10-99 to its accounting classification of its Class A Ordinary Shares and upon such re-evaluation, management determined that the Class A Ordinary Shares include certain provisions that require classification of a portion of the Class A Ordinary Shares as temporary equity regardless of the minimum net tangible assets required by the Company to complete its initial Business Combination.

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~~Following the identification of the foregoing material weaknesses, our management established and commenced implementation of a remediation plan, as more fully described under “Changes in Internal Control Over Financial Reporting” below. The implementation of this remediation plan is ongoing.

We have further evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2022 with the participation and under the supervision of our management, including our Chief Executive Officer and our Chief Financial Officer. In this evaluation, our management did not identify any material weaknesses in addition to those identified in its evaluation as of December 31, 2021. Based on this latest evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of September 30, 2022, our disclosure controls and procedures were ineffective to the extent of the material weaknesses described above.

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 September 30, 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 and applicable stock exchange listing requirements, and 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 that 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 20 "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.~~

~~Item~~filings with the SEC.

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

There were no unregistered sales of equity securities during the nine months ended September 30, 2021. Unregistered sales of equity securities and use of proceeds during the three months ended March 31, 2021 are set forth in the March 2021 Quarterly Report.

~~Item~~

None.

Item 3. Defaults Upon Senior Securities.

None.

~~Item~~

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

~~None.~~

Item 6. ~~Exhibits~~

Exhibits.


~~No.~~			~~Description of Exhibit~~
~~2.1~~			Business Combination Agreement, dated as of July 15, 2021, by and among Altimar Acquisition Corp. II, Fathom Holdco, LLC and the other parties thereto (incorporated by reference to Exhibit 2.1 to Altimar Acquisition Corp. II’s Current Report on Form 8-K filed on July 19, 2021).

~~10.1~~Exhibit Number	Description
4.1	Forfeiture and Support Agreement, dated as of July 15, 2021, by and among Altimar Sponsor II, LLC, ~~the Altimar II Class B Holders party thereto,~~ Altimar Acquisition Corp. II, Fathom Holdco, LLC and the other parties thereto (incorporated by reference to Exhibit 10.1 to ~~Altimar Acquisition Corp. II’s~~the Current Report on Form 8-K filed by Altimar Acquisition Corp. II (Fathom's predecessor) with the SEC on July 19, ~~2021).~~2021.
10.1*	First Amendment dated as of November 10, 2022 to Credit Agreement, dated as of December 23, 2021, among Fathom Guarantor, LLC, Fathom Manufacturing, LLC, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent..
~~10.2~~		~~Form of Subscription Agreement No. 1 (incorporated by reference to Exhibit 10.2 to Altimar Acquisition Corp. II’s Current Report on Form 8-K filed on July 19, 2021).~~

~~10.3~~			~~Form of Subscription Agreement No. 2 (incorporated by reference to Exhibit 10.3 to Altimar Acquisition Corp. II’s Current Report on Form 8-K filed on July 19, 2021).~~

~~10.4~~			~~Form of Fathom Voting and Support Agreement (incorporated by reference to Exhibit 10.4 to Altimar Acquisition Corp. II’s Current Report on Form 8-K filed on July 19, 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*		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		Cover Page Interactive Data File ~~(formatted as~~(embedded within the Inline ~~XBRL)~~XBRL document)

* Filed herewith.

** These certifications are furnished to 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.

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: November ~~23, 2021~~14, 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: November ~~23, 2021~~14, 2022		By:	/s/ ~~Wendy Lai~~Mark Frost
		~~Name:~~	~~Wendy Lai~~Mark Frost
		~~Title:~~	Chief Financial Officer ~~(Principal Financial Officer)~~


~~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)


	September 30, 2021		December 31, 2020
	(Unaudited)
ASSETS
Current assets
Cash	$	331,112	$	—
Prepaid expenses	744,813		—
Total current assets	1,075,925		—
Deferred offering costs	—		75,000
Investments held in the Trust Account	345,011,697		—
TOTAL ASSETS	$	346,087,622	$	75,000

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accrued expenses	$	259,896	$	—
Accrued offering costs	3,607		50,000
Promissory Note—related party	—		5,000
Total current liabilities	263,503		55,000
Warrant liability	19,642,970		—
Deferred underwriting fee payable	12,075,000		—
Total liabilities	31,981,473		55,000
Commitments and Contingencies	0		0
Class A Ordinary Shares subject to possible redemption—34,500,000 and no shares at $10.00 per share redemption value as of September 30, 2021 and December 31, 2020, respectively	345,000,000		—
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; none issued and outstanding as of September 30, 2021 and December 31, 2020	—		—
Class B Ordinary Shares, $0.0001 par value; 50,000,000 shares authorized; 8,625,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020	863		863
Additional paid-in capital	—		24,137
Accumulated surplus (deficit)	(30,894,714)		(5,000)
Total shareholders’ equity (deficit)	(30,893,851)		20,000
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	346,087,622	$	75,000


	Class A Common Shares					Class B Common Shares
Successor:	Number of Shares			Par Value ($0.0001 per share)		Number of Shares			Par Value ($0.0001 per share)			Additional Paid-in Capital			Accumulated Deficit			Total Equity Attributable to Fathom			Redeemable Non-controlling Interest
Balance at December 31, 2021		50,785,656		$	5		84,294,971		$	8		$	466,345		$	(47,581	)	$	418,777		$	841,982
Equity based compensation		-			-		-			-			2,130			-			2,130			-
Adoption of ASC 842		-			-		-			-			-			82			82			-
Net income (loss)		-			-		-			-			-			22,991			22,991			(5,259	)
Balance at March 31, 2022		50,785,656			5		84,294,971			8			468,475			(24,508	)		443,980			836,723
Equity based compensation		-			-		-			-			1,795			-			1,795			-
Net income (loss)		-			-		-			-			-			34,421			34,421			(442	)
Vesting of restricted shares, net of tax withholding		530,532			-		-			-			(2,258	)		-			(2,258	)		-
Exchange of Class B common stock and Fathom Opco units		10,280,331			1		(10,280,331	)		(1	)		-			-			-			-
Non-controlling interest remeasurement		-			-		-			-			86,666			-			86,666			(86,666	)
Tax receivable agreement liability on capital transactions		-			-		-			-			(5,000	)		-			(5,000	)		-
Tax impact of exchange of Class B common stock and Fathom Opco units		-			-		-			-			4,481			-			4,481			-
Balance at June 30, 2022		61,596,519		$	6		74,014,640		$	7		$	554,159		$	9,913		$	564,085		$	749,615
Equity based compensation		-			-		-			-			1,762			-			1762			-
Net loss		-			-		-			-			-			(490,080	)		(490,080	)		(556,027	)
Vesting of restricted shares, net of tax withholding		71,645	-		-		-			-			(308	)		-			(308	)		-
Exchange of Class B common stock and Fathom Opco units		3,861,589	-		-		(3,861,589	)		-			-			-			-			-
Non-controlling interest remeasurement		-	-		-		-			-			32,181			-			32,181			(32,181	)
TRA liability on capital transactions		-	-		-		-			-			(16,700	)		-			(16,700	)		-
Tax impact of exchange of Class B common stock and Fathom Opco units		-	-		-		-			-			13,219			-			13,219			-
Balance at September 30, 2022		65,529,753		$	6		70,153,051		$	7		$	584,313		$	(480,167	)	$	104,159		$	161,407

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


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

			Page
	~~Page~~
~~PART I. FINANCIAL INFORMATION~~	EXPLANATORY NOTE	3
~~Item 1. Interim Condensed Financial Statements~~	1
PART I.	~~Condensed~~FINANCIAL INFORMATION	4

Item 1.	Financial Statements (Unaudited)	4
	Consolidated Balance Sheets ~~as of~~ ~~September 30, 2021~~ ~~(Unaudited) and~~ ~~December 31, 2020~~	14
	~~Condensed~~Consolidated Statements of ~~Operations for the~~ Comprehensive Loss~~three and nine~~ ~~months ended~~ ~~September 30, 2021~~ ~~(Unaudited)~~	25
	~~Condensed Statements~~Consolidated Statement of ~~Changes in Shareholders’~~Shareholders' Equity ~~(Deficit) for the three~~ and Redeemable Non-Controlling Interest~~nine~~ ~~months ended~~ ~~September 30, 2021~~ ~~(Unaudited)~~	36
	~~Condensed~~Consolidated Statement of Class A Contingently Redeemable Preferred Units and Members' Equity	7
	Consolidated Statements of Cash Flows ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2021~~ ~~(Unaudited)~~	48
	Notes to ~~Condensed~~Unaudited Consolidated Financial Statements ~~(Unaudited)~~	59
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2028
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2339
Item 4.	Controls and Procedures	2439
~~PART II. OTHER INFORMATION~~
~~Item 1. Legal Proceedings~~PART II.	27OTHER INFORMATION	40
~~Item 1A. Risk Factors~~	27
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2740
Item 3.	Defaults Upon Senior Securities	2740
Item 4.	Mine Safety Disclosures	2740
Item 5.	Other Information	2740
Item 6. ~~Exhibits~~	27Exhibits	41
	Signatures	42


	For the Three Months Ended September 30, 2021		For the Nine Months Ended September 30, 2021
Operating (income) costs	$	1,121,132	$	1,691,620
(Income) loss from operations	1,121,132		1,691,620
Other income (expense)
Interest earned on investments held in the Trust Account	5,301		11,697
Transaction costs allocated to the Warrants	—		(755,071)
Change in fair value of warrant liability	3,718,348		3,190,546
Other income (expense), net	3,723,649		2,447,172
Net income (loss)	$	2,602,517	$	755,552
Weighted average shares outstanding, redeemable Class A Ordinary Shares	34,500,000		29,571,429
Basic and diluted net income (loss) per share, redeemable Class A Ordinary Shares	$	0.06	$	0.02
Weighted average shares outstanding, Class B Ordinary Shares	8,625,000		8,460,165
Basic and diluted net income (loss) per share, Class B Ordinary Shares	$	0.06	$	0.02


	Class A Ordinary Shares			Class B Ordinary Shares			Additional Paid-In Capital		Accumulated Surplus (Deficit)		Total Shareholders’ Equity
	Shares	Amount		Shares	Amount
Balance—January 1, 2021	—	$	—	8,625,000	$	863	$	24,137	$	(5,000)	$	20,000
Accretion for Class A Ordinary Shares to redemption amount	—	—		—	—		(24,137)		(31,645,266)		(31,669,403)
Net income (loss)	—	—		—	—		—		(15,725,653)		(15,725,653)
Balance—March 31, 2021 (restated)	—	—		8,625,000	863		—		(47,375,919)		(47,375,056)
Net income (loss)	—	—		—	—		—		13,878,688		13,878,688
Balance—June 30, 2021 (restated)	—	—		8,625,000	863		—		(33,497,231)		(33,496,368)
Net income (loss)	—	—		—	—		—		2,602,517		2,602,517
Balance—September 30, 2021	—	$	—	8,625,000	$	863	$	—	$	(30,894,714)	$	(30,893,851)


Balance Sheet as of February 9, 2021 (audited)	As Previously Reported		Adjustment		As Revised
Class A Ordinary Shares subject to possible redemption	$	300,351,190	$	44,648,810	$	345,000,000
Class A Ordinary Shares	446		(446)		—
Additional paid-in capital	13,003,096		(13,003,096)		—
Accumulated deficit	(8,004,403)		(31,645,268)		(39,649,671)
Total shareholders' equity (deficit)	5,000,002		(44,648,810)		(39,648,808)


	Net Income (Loss) Per Share
Three Months Ended March 31, 2021 (unaudited)	As Previously Reported		Adjustment		As Revised
Weighted average shares outstanding - Class A Ordinary Shares	34,500,000		(14,950,000)		19,550,000
Basic and diluted net income (loss) per share - Class A Ordinary Shares	$	—	$	(0.57)	$	(0.57)
Weighted average shares outstanding - Class B Ordinary Shares	8,125,000		—		8,125,000
Basic and diluted net income (loss) per share - Class B Ordinary Shares	$	(1.94)	$	1.37	$	(0.57)


	Net Income (Loss) Per Share
Three Months Ended June 30, 2021 (unaudited)	As Previously Reported		Adjustment		As Revised
Weighted average shares outstanding - Class A Ordinary Shares	34,500,000		—		34,500,000
Basic and diluted net income (loss) per share - Class A Ordinary Shares	$	—	$	0.32	$	0.32
Weighted average shares outstanding - Class B Ordinary Shares	8,625,000		—		8,625,000
Basic and diluted net income (loss) per share - Class B Ordinary Shares	$	1.61	$	(1.29)	$	0.32


	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
Redeemable Class A Ordinary Shares
Numerator:
Allocation of net income (loss)	$	2,082,014	$	587,479
Denominator:
Basic and diluted weighted average shares outstanding	34,500,000		29,571,429
Basic and diluted net income (loss) per share	$	0.06	$	0.02

Class B Ordinary Shares
Numerator:
Allocation of net income (loss)	$	520,503	$	168,073
Denominator:
Basic and diluted weighted average shares outstanding	8,625,000		8,460,165
Basic and diluted net income (loss) per share	$	0.06	$	0.02


Description	Level	September 30, 2021
Assets:
Investments held in the Trust Account	1	345,011,697
Liabilities:
Warrant liability—Public Warrants	1	$	9,070,433
Warrant liability—Private Placement Warrants	3	$	10,572,537


	Private Placement Warrants		Public Warrants		Warrant Liabilities
Fair value as of February 9, 2021	$	17,144,332	$	12,933,516	$	30,077,848
Change in valuation inputs or other assumptions	(3,784,363)		(2,932,167)		(6,716,530)
Fair value of Warrants transferred out of Level 3	—		(10,001,349)		(10,001,349)
Fair value of Level 3 warrant liabilities as of June 30, 2021	$	13,359,969	$	—	$	13,359,969
Change in valuation inputs or other assumptions	$	(2,787,432)	$	—	$	(2,787,432)
Fair value of Level 3 Warrant Liabilities as of September 30, 2021	$	10,572,537	$	—	$	10,572,537

Acquisition Date Fair Value

Estimated Life (Years)

Trade name

Customer relationships